New pharmacy owner agrees to $5 million settlement in anti-kickback case

A North Carolina pharmacy services company agreed Wednesday to pay a $5 million civil fine to settle federal anti-kickback violations alleged to have occurred under prior ownership, the U.S. Attorney's Office for the Eastern District of North Carolina announced.

U.S. Attorney Thomas G. Walker alleged in a public statement this week that Physicians Pharmacy Alliance offered gift cards and copayment waivers as enrollment or referral inducements to Medicare and Medicaid beneficiaries. The company provides pharmacy home delivery services.

It is a precautionary tale for providers, which are prohibited from giving or receiving illegal remunerations under the anti-kickback statute. Such remunerations include gifts of cash equivalents such as gift cards, and routinely waiving copayments.

“This case underscores for healthcare providers that if you commit fraud by giving gift cards or routinely waiving copayments in order to induce referrals, you will be liable for substantial damages and penalties under the anti-kickback statute,” Walker said in announcing the settlement.

The company's current owners agreed to the settlement based on allegations of PPA practices that occurred prior to their purchase of the business in 2011, Walker said, adding that claims resolved by civil settlement are allegations only, without any determination of liability.