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Archive for May, 2015

PharMerica Agrees to Pay $31.5M Over False Claims Act Violations

Thursday, May 28th, 2015

On May 14, 2015, PharMerica Corp. agreed to pay $31.5 million to resolve a False Claims Act and Controlled Substances Act lawsuit alleging that the company had dispensed Schedule II controlled drugs without valid prescriptions and then billed Medicare for the improperly dispensed drugs.

PharMerica, a long-term care pharmacy that dispenses medications to residents of long-term care facilities, often fills prescriptions for controlled substances listed in Schedule II under the Controlled Substances Act. The lawsuit alleged that PharMercia pharmacies throughout the country routinely dispensed these Schedule II controlled drugs in non-emergency situations without first obtaining a written prescription. According to the complaint, PharMerica violated the Controlled Substances Act by enabling nursing home staff to order narcotics, and pharmacists to dispense them, without confirming that a physician had determined whether the narcotics were medically necessary. PharMerica agreed to pay $8 million to resolve those allegations.

The lawsuit 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, including oxycodone and fentanyl. PharMerica agreed to pay $23.5 million to resolve those allegations. The whistleblower who brought these allegations to the attention of the government, Jennifer Buth, will receive $4.3 million for her efforts. As part of the settlement, PharMerica also agreed to enter into a corporate integrity agreement with the HHS-OIG, which obligates the company to undertake substantial internal compliance reforms and to submit federal health care program claims for an independent review for the next five years.

PharMerica to Pay $31.5 Million to Settle False Claims Act and Controlled Substances Act Lawsuit

Tuesday, May 26th, 2015

The United States Department of Justice (“DOJ”) recently announced that PharMerica Corp. will pay $31.5 million, including more than $4 million to a whistleblower, to settle alleged violations of the Controlled Substances Act (“CSA”) and False Claims Act (“FCA”) related to the company’s improper dispensing of narcotics and submission of false claims to Medicare Part D.

PharMerica is a long-term care pharmacy that dispenses drugs to residents in nursing homes and other long-term care facilities.  The government alleged that PharMerica dispensed controlled substances listed in Schedule II of the CSA, including oxycodone and morphine, in non-emergency situations based solely on requests from the long-term facility rather than a valid prescription from a practitioner.  Schedule II narcotics were thus allegedly dispensed without physician confirmation that they were necessary and should be administered to the resident.  Under the settlement, PharMerica has agreed to pay $8 million to resolve these allegations.

The complaint also alleged that PharMerica violated the FCA by knowingly causing the submission of false claims to Medicare Part D for these improperly dispensed Schedule II drugs.  The FCA 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 FCA violations.

The FCA claims resolved by Thursday’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.

PharMerica’s agreement with the United States includes not only a settlement with DOJ but a five-year Corporate Integrity Agreement with the Department of Health and Human Services – Office of the Inspector General as well.  The Corporate Integrity Agreement calls for the appointment of an official compliance officer, the establishment of a compliance committee, and the submission of federal health care program claims for independent review for the next five years, among other reforms.

Strengthened Maryland FCA Signed Into Law – 30 States Now Have FCAs

Friday, May 22nd, 2015

Bills signed by Governor Larry Hogan, Speaker of the House Michael Busch and Senate President Mike Miller include, expanding the Maryland False Claims Act protecting whistleblowers.

Whistleblowers will be enticed to report fraud in companies doing work for state and local governments through the new Maryland False Claims act, rewarding them with a portion of the reclaimed funds as reward for their honesty, while also providing protection form on-the-job retaliation.

While Maryland’s previous false claims act only included medical fraud, the new act casts a larger net to include state and local government contractors.

Those who are found to have committed fraud will be subject to a civil penalty of up to $10,000 for each violation.

 

 
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