PharMerica Settles False Medicare Claims for $31.5M; Whistleblower to Get $4.3M
PharMerica Corporation has agreed to pay $31.5 million to resolve allegations that the company knowingly submitted or caused the submission of false claims to Medicare for improperly dispensed drugs, the U.S. Department of Justice announced yesterday.
PharMerica is a long-term care pharmacy that dispenses medications to residents of long-term care facilities, including nursing homes and skilled nursing facilities. Many of the prescriptions filled by PharMerica are for controlled substances listed in Schedule II under the Controlled Substances Act. Schedule II drugs, such as oxycodone and fentanyl, can cause significant harm if used improperly and have a high potential for abuse.
The government’s suit alleged that PharMerica pharmacies operating across the country routinely dispensed Schedule II controlled drugs in non-emergency situations without first obtaining a written prescription from a treating physician. According to the complaint, PharMerica’s actions violated the Controlled Substances Act by enabling nursing home staff to order narcotics, and pharmacists to dispense them, without confirming that a physician had made a medical judgment as to whether the narcotics were necessary and should be administered to the resident. Under the settlement, PharMerica has agreed to pay $8 million to resolve these allegations.
The government’s complaint also alleged that PharMerica violated the False Claims Act by knowingly causing the submission of false claims to Medicare Part D for improperly dispensed Schedule II drugs. The False Claims Act imposes treble damages and penalties for the knowing submission of false claims for federal funds. PharMerica has agreed to pay $23.5 million to resolve its alleged False Claims Act violations.
As part of the settlement announced today, the settling defendant has also agreed to enter into a corporate integrity agreement with the U.S. Department of Health and Human Services – Office the Inspector General (HHS-OIG), which obligates PharMerica to undertake substantial internal compliance reforms and to submit federal health care program claims for an independent review for the next five years.
The False Claims Act claims resolved by today’s settlement were originally brought by Jennifer Denk, a pharmacist formerly employed by PharMerica, under the whistleblower provisions of the act, which authorize private parties to sue on behalf of the United States and to receive a portion of any recovery. The act permits the United States to intervene and take over the lawsuit, as it did in this case with respect to some of Ms. Denk’s allegations. Ms. Denk will receive $4.3 million as her share of the settlement.
The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments. We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud. Read more about our expertise in False Claims Act cases and how you can take action.