A subsidiary of a pharmacy chain near Pittsburgh pleaded guilty Tuesday in a conspiracy scheme described by prosecutors as an attempt to recycle unused medications.
Soo C. Song, acting U.S. attorney for the Western District of Pennsylvania, announced Iserve Technologies Inc. will pay $1.55 million to reimburse the government for fraudulent Medicare and Medicaid billing. The company, which operated inside a pharmacy operated by family-owned Med-Fast, must also forfeit $400,000, pay a $44,600 criminal fine and a $400 special assessment.
The U.S. attorney’s office accused Med-Fast drivers of picking up unused medications from nursing homes and taking them back to Iserve, according to the Pittsburgh Post-Gazette. Employees there removed the drugs from the packages and restocked the shelves with them.
That meant drugs from different makers and with different expiration dates could be combined together.
Med-Fast President Doug Kaleugher said all of his company’s patients received the correct medications, despite “issues with the way medications were being labeled.”
“These concerns were rectified and the individuals primarily responsible for this conduct are no longer with the company,” he said, noting both Med-Fast and Iserve had since expanded methods to ensure quality and compliance.
The resolution follows earlier guilty pleas by a former Med-Fast vice president and the former manager of the institutional pharmacy in question. Soo said owner Douglas Kaleugher and other Med-Fast entities had also reached a $2.7 million settlement in connection with two related whistleblower lawsuits brought in U.S. District Court.
According to the Med-Fast website, the company operates more than half a dozen pharmacies offering retail, home care and long-term care services.
