The U.S. Department of Justice announced that a North Carolina Pharmacy agreed to pay more than $213K to resolve allegations it violated the False Claims Act. 

The federal FCA prohibits any person from knowingly presenting, or causing to be presented, a false or fraudulent claim for payment to the federal government. The FCA also prohibits any person from knowingly making, using, or causing to be made or used, a false record or statement material to a false or fraudulent claim.  Many states have laws that mirror the federal FCA.  

In the announced settlement, the government alleges that MedCare Clinic & Pharmacy, LLC (MedCare) submitted claims for about 200 prescriptions to Medicare Part D and North Carolina Medicaid.  The government alleges that MedCare never distributed the prescriptions to beneficiaries, despite MedCare allegedly submitted claims.  The government’s allegations are based, in part, on the contention that MedCare’s inventory records do not support the claims submitted.  Specifically, the government contends that MedCare did not buy enough of the medications to fill all the prescriptions billed to Part D and to North Carolina Medicaid.  

While a settlement for $213,677 may seem relatively modest compared to the million-dollar settlement announcements, such settlements can have a significant impact on businesses.  These settlements also show the government’s willingness to pursue allegations of FCA violations, regardless of the potential monetary size of the case.  According to the Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division, “pharmacies may bill only for medications that they actually sell” and the government “will continue to pursue entities that knowingly and unjustly enrich themselves at the taxpayers’ expense.”

Like many FCA cases, this case was brought under the FCA’s qui tam provisions, which provide financial incentives and a procedural structure to whistleblowers – or relators – who FCA cases on behalf of the government.  The financial incentive can be significant, as whistleblowers are entitled to 15% to 30% of the money the government recovers, based on several factors.  In this case, the relators will receive $53,419.43 as their share of the settlement. 

The qui tam case is captioned U.S. ex rel. Henry v. Pharmacy Holdings, et al., No. 3:20-cv-61 (W.D.N.C.). 

The attorneys at Chilivis Grubman represent clients of all types and sizes in connection to False Claims Act litigation, government investigations, and cybersecurity fraud investigations.  If you need assistance with such a matter, please contact us today.