Kindred pharmacy affiliate to pay $1.3 million in drug over-billing lawsuit

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Kindred Healthcare Inc.'s affiliate PharMerica Corp. will pay $1.3 million in a settlement with the federal government and the state of Tennessee. It allegedly over-charged the state's Medicaid system for drugs delivered to a Knoxville nursing home, according to recent reports.

The lawsuit alleges that the company billed the state's TennCare program for more drugs than were actually delivered to the company's skilled nursing facility in Knoxville, resulting in serious overpayments. According to the Tennessee attorney general, this is the largest settlement ever reached by the TennCare Provider Fraud Task Force under the False Claims Act. Both PharMerica and Kindred have denied any wrongdoing, according to the Knoxville News Sentinel.

The whistle-blower responsible for bringing the overpayments to light will receive a reward of roughly $220,000, according to the terms of the June 5 settlement. Jeanne Mayes was a billing clerk at the facility, and filed the original suit on Feb 11, 2005, according to the News Sentinel. PharMerica was created from the merger of two institutional pharmacy businesses, PharMerica Long-Term Care and Kindred Pharmacy Services.