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From Health Law Daily, May 15, 2015

False claims escalate pharmacies’ drug dispensing trouble to the tune of $31.5 million

By Melissa Skinner, J.D.

A long-term care pharmacy, PharMerica, entered into a settlement agreement with the government to resolve charges of violations of the Controlled Substances Act (CSA) (21 U.S.C. § 812) as well as the False Claims Act (FCA) (31 U.S.C. § 3729). According to the Department of Justice (DOJ), PharMerica has agreed to pay $31.5 million and to enter into a corporate integrity agreement (CIA) based on allegations that the pharmacy was dispensing Schedule II controlled substances without valid prescriptions and for submitting the same for reimbursement under federal health care programs.

PharMerica. PharMerica is a pharmacy that serves long-term care and skilled nursing facilities across the country. The DOJ press release noted that many of the prescriptions that are filled by PharMerica are on Schedule II under the CSA and that these Schedule II drugs include drugs that can cause severe harm to those who use them improperly and are likely to be abused. These drugs include oxycodone and fentanyl.

Controlled substances. The lawsuit that was filed against PharMerica by the government alleged that it had improperly dispensed drugs to patients in violation of the CSA. Specifically, the complaint stated that the long-term care pharmacy filled Schedule II prescriptions in non-emergency situations and which were ordered by nursing home staff without the requisite physician’s medical judgment that confirmed such substances were necessary for treatment. Based on these allegations, PharMerica agreed to pay $8 million in the settlement agreement.

FCA. Because certain prescriptions were filled and then submitted as claims under federal health care programs, the FCA was also violated, according to the government. In particular, the DOJ explained that PharMerica knowingly caused the submission of false claims to Medicare Part D for improperly dispensed Schedule II drugs. Because the FCA calls for treble damages and penalties, PharMerica agreed to pay $23.5 million to resolve the claims for alleged violations of the FCA. The claims under the FCA were originally brought as a qui tam suit by relator and pharmacist formally employed by PharMerica, Jennifer Denk. Denk’s share of the settlement as the relator will be $4.3 million.

CIA. In addition to paying these penalties, PharMerica will also enter into a CIA with the HHS Office of Inspector General (OIG) in resolution of the claims. The CIA will obligate the pharmacy to “undertake substantial internal compliance reforms and to submit federal health care program claims for an independent review for the next five years.”

According to Special Agent in Charge Lamont Pugh of HHS-OIG “the legal requirement that narcotics like oxycodone be prescribed by a physician is a crucial patient protection, which is especially important to safeguard the health of the vulnerable elderly and disabled patients in long term care facilities.” He added, “Our agency is dedicated to protecting the taxpayer-funded Medicare and Medicaid programs as well as the millions of beneficiaries who rely on those programs for their health and well-being.”

Companies: PharMerica Corporation

MainStory: TopStory DrugNews ReimbursementNews ControlledNews FraudNews FCANews LTCHNews PrescriptionDrugNews SNFNews PartDNews QuiTamNews

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