Archive for the ‘Medicare Part D’ Category

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.

Medicare, Part D, Full of Fraud Due to Lack of Oversight

Wednesday, February 25th, 2015

Medicare, Part D began in 2006 as a program to get much needed medication to more than 36 million senior citizens and people with disabilities.  Billions of needless expense has been added to the program due to lack of oversight and doctors prescribing name brand medications instead of generics.  Moreover, ProPublica has reviewed Medicare’s data and found that many doctor’s patterns of prescribing were fraudulent.  Some doctors blame this on identity theft claiming their identities were stolen.  One doctor, Ernest Bagner, III, made this claim.  Nevertheless, law enforcement, fraud units of at least two insurers and Medicare’s fraud contractor never blocked his national provider ID, which is needed to fill prescriptions.  Bagner had the highest total of money paid by Medicare for prescriptions by 2010.  Bagner claimed that the prescriptions were not his.  He stated, “These people make more money off of my name than I do.”  Some investigating his case do not believe he is being completely truthful.

There are many schemes that are constantly developing to loot the Medicare program.  Many foreign, aging, poor or disabled doctors are hired at small pharmacies and their ID’s are used to write thousands of fraudulent prescriptions for patients whose identities make also have been bought or stolen.  After dispensing, the drugs can be relabeled then sold to wholesalers or other pharmacies.  Other schemes include willing doctors who bill Medicare for the same prescriptions many times over that are never filled.  Not all prescriptions are for pain killers so law enforcement may overlook them.

In Los Angeles, Sheriff’s Sargent Steve Opferman heads LA County’s Health Authority Law Enforcement Task Force.  This is a hot spot of Medicare fraud and he spends much his time running down Part D scams.  Sgt. Opferman stated that most of the scams are related to Armenian organized crime rings. The scams depend upon a large group of doctors who are either unaware or dishonest.  Once the doctors are under law enforcement radar, the crime ring merely finds another doctor.  Opferman stated that Medicare is short of help and investigations can take “months or years” to get basic prescription or billing data.  He stated, “It’s like pulling teeth.”  Opferman said that if Medicare would ensure that doctors and pharmacies are legitimate and if they would shut down ID’s quickly when fraud is suspected, Medicare could stop much of the fraud.

Investigators from many agencies are involved in fraud cases and many times fall short of the goal line so justice is rarely swift.  Part D is run by private insurance companies unlike other parts of Medicare.  Insurers are supposed to look for fraud.  Typically the beginnings of cases investigated by insurers are once they notice a spike in a doctor’s prescribing or when tipped off by a patient.  Medicare does not require insurers to notify its Part D fraud contractor, only encourages reporting.  Insurers are not allowed to block a suspected doctor’s prescriptions.  Furthermore, insurers can only see a portion of the doctor’s prescribing record and they have no insight into the prescribing patterns   that are sent to other companies.  Contractors must get the patient’s chart from the insurers, who suspect fraud, to determine if the patient actually saw the doctor or was prescribed the correct medication.  This is usually where the investigation comes to a dead end.  Part D competes with other areas of Medicare fraud, such as kickbacks.  Only a small percentage is referred for prosecution.  Most are dropped due to “lack of resources or insufficient evidence,” states a 2012 report from the Government Accountability Office.

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