The PharMerica Litigation: Pharmaceutical Fraud and False Medicare Claims

We reported recently on one form of pharmaceutical litigation in our report on dangerous diet pills. Today's post follows the story of another type of pharmaceutical fraud. The allegations involve PharMerica, a company that manages pharmacy services and provides medications for patients in long-term care settings, including assisted-living, skilled nursing, and other residential facilities. Our Panama City pharmaceutical fraud firm is greatly concerned about the alleged acts which threaten the health of nursing home residents and pilfer funds from already strained Medicare coffers.

Background on the PharMerica Litigation

According to a report in Reuters, the current litigation began in 2009 when Jennifer Denk (now Jennifer Buth) filed a whistleblower lawsuit against her former employer. Buth previously worked for PharMerica as a pharmacy operations manager located in Wisconsin. On August 9, 2013, the Department of Justice ("DOJ") announced it had joined the suit (see press release on the DOJ website). Buth's suit, pending in the U.S. District Court in Milwaukee, was also consolidated with a subsequent complaint filed by Eric Beeders and Lesa Martino (pharmacists with a predecessor company) in May 2010.

The Applicable Law and Pending Allegations

The primary basis of the complaint is the allegation that, from 2007 to 2009, PharMerica dispensed controlled substances without a valid prescription order placed by a treating physician. During that time frame, the company provided pharmacy services to approximately 300,000 residents, filling around 40 million prescriptions annually and obtaining 45% of their prescription drug revenue from the Medicare Part D prescription program. The fraudulent dispensing claims fall under the Controlled Substances Act and can give rise to civil fines. According to the filings, PharMerica also submitted in excess of 250 false or fraudulent claims for payment to Medicare. Claims stemming from those allegations fall under the federal False Claims Act which provides civil penalties and treble damages (i.e. damages incurred times three).

Of extra concern is the fact that the claims involve Schedule II medications such as fentanyl and oxycodone, drugs that carry a high risk of addiction, abuse, and other problems if used without skilled medical oversight. According to the government's allegations, PharMerica improperly allowed care center staff to order the medicines and permitted pharmacists to dispense narcotics without confirming the medication with a treating physician. The company kept these unsigned authorization forms in a room referred to as, for reasons not yet made clear, the Harry Potter Room.

The System's Rationale and the Law's Incentives

Laws governing the dispensing of medications exist to protect patients from potentially dangerous medications. The system relies on doctors to help patients weigh the benefits and risks of a treatment. This is particularly important, according to an attorney with the Justice Department Stuart Delery, with Schedule II narcotics given the high potential for abuse. Delery also notes that the PharMerica suit is also in keeping with the Department's duty to ensure the integrity of federal health care program monies, as well as its more general duty to enforce the law and punish offenders.

Our Work as a Florida Pharmaceutical Fraud Law Firm

Attorney Pittman understands that pharmaceutical fraud impacts everyone. If true, PharMerica's actions diverted vital Medicare funds, endangered patient health, put risky medications into circulation, and made it harder for those with genuine need for such drugs by putting prescriptions into question. In recognition of these social dangers, the system rewards those who report this type of behavior by providing significant monetary incentives to whistleblowers and protecting whistleblowers from retaliation (i.e. in the case of an employee who reports company misdeeds).

If you know of companies or individuals involved in pharmaceutical fraud, including billing in violation of the False Claims Act, please call our Panama City medical fraud attorney. We can review the facts and help you file a civil claim that may bring an end to the fraud, protecting Americans and ensuring the integrity of the health care system, while also allowing you to recover damages and, where appropriate, a financial reward.

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