PharMerica settles whistleblower complaint for $31.5 million

PharMerica settles whistleblower complaint for $31.5 million
PharMerica settles whistleblower complaint for $31.5 million

National pharmacy services provider PharMerica said it has entered into separate agreements with the government and revised its controlled substances dispensing policies following a whistleblower lawsuit filed in 2009.

The Louisville, KY-based company, which serves nursing homes and other senior care providers, has agreed to pay nearly $32 million in penalties to settle allegations it overbilled the federal government for controlled substances such as oxycodone and fentanyl and routinely dispensed the medications to individuals without valid prescriptions. The claims resolved by the settlement are allegations only and there has been no determination of liability, noted Cross Law Firm, the plaintiff's attorneys.

As part of the settlement, PharMerica entered into a three-year memorandum of agreement (MOA) with the Drug Enforcement Administration and a five-year corporate integrity agreement (CIA) with the Department of Health & Human Services, the latter of which will compel submission of Medicare payment claims for independent review.

“The company changed its operating policies in 2010 to enhance procedures related to the dispensing of controlled substances,” PharMerica said in a statement. “The MOA and the CIA will further enhance PharMerica's longstanding compliance programs.”

The case originated in a “whistleblower” complaint filed by Jennifer Denk Buth, a PharMerica pharmacy operations manager in Pewaukee, WI. Buth alleged that PharMerica engaged in billing Medicare for drugs prescribed to deceased patients, double billing, failing to credit Medicare for returned prescriptions and billing for one pharmaceutical while providing a different one, according to published reports. In addition, Buth's original complaint alleged that PharMerica violated anti-kickback rules and permitted nursing homes to distribute narcotics from kit boxes without keeping records.

“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,” said Lamont Pugh III, special agent in the Office of Inspector General, in a statement.

PharMerica will pay $8 million in penalties related to alleged Controlled Substances Act violations and $23.5 million related to alleged False Claims Act violations.