Whistleblower Lawsuit Claims Medicare Fraud by Pharma Firm
The U.S. Department of Justice has launched a lawsuit against a pharmaceutical services firm for illegally dispensing controlled substances and defrauding Medicare in the process.
The government announced their lawsuit on on Aug. 9, suing PharMerica Corp for violating the False Claims Act and the Controlled Substances Act by dispensing drugs to nursing homes and facilities without physician-authorized prescriptions.
The alleged scam came to light when pharmacist Jennifer Denk blew the whistle after she observed that prescriptions, including those for highly addictive drugs like fentanyl and oxycodone, were being filled with no doctor signature. After her internal complaint went unheeded, she filed a federal suit, which was unsealed and taken over by the government last week.
According to the complaint, PharMerica served 300,000 residents, filled 40 million prescriptions annually and generated 45 percent of its revenue from prescription drugs paid for by Medicare.
“Pharmacies are prohibited by law from dispensing Schedule II narcotics, which have the highest potential for abuse of any prescription drug, without a valid prescription from a physician,” said Stuart Delery, assistant attorney general for the civil division of the Department of Justice, in a press release. “As we have done today, the Department of Justice will take action to protect the integrity of federal health care program funds and hold those who violate the law accountable.”
Denk also alleged a number of other violations in her lawsuit, including that her employer asked her to falsify records, and billed Medicare for prescriptions that were doubled billed, returned or written for dead patients.
“I took an oath when I graduated from pharmacy school,” Denk said in a statement, “and I felt I had no choice but to follow my oath.”
Fraud Brought to Light
Denk took a major professional risk to bring the alleged fraud by her employer to light.
“As a new, young pharmacist with her pharmaceutical license on the line, a signing bonus to repay if she resigned, and a new mortgage, Jenny Denk was between a rock and a hard place when she suspected PharMerica was committing fraud against the government,” her attorney, Nola J. Hitchcock Cross of the Cross Law Firm, said in a press release. “Worse, whistleblowers are also concerned about being blacklisted within their entire profession.”
Indeed, after the government opened an investigation against the company in 2009, she was fired. Fortunately, Denk was protected by a federal law that is designed to expose fraud and reward whistleblowers in a process known as “qui tam” which allows the filer to receive part of the penalty imposed on the alleged wrongdoer.
“The importance of the False Claims Act is that it provides a vehicle for public/private partnership to protect taxpayer interests and to stop potential harm to patients in the case of healthcare fraud or to the troops in the case of defense contract fraud,” Hitchcock Cross told Lawyers.com. “The law is unusual because it requires filing a complaint on behalf of the government under seal, which can only be done by an experienced qui tam because of the complexity of the complaints and legal claims.”
The attorney notes that there are at least 92 different whistleblower statutes, each with its own particular requirements, process and recovery opportunities. “Also issues involving document retention, recordings, job security, and the secrecy of filing under seal, all require immediate expert legal advice,” Hitchcock Cross says. “With whistleblowing, more than any other area of the law, it is crucial for anyone who even suspects fraud, to call a fraud and retaliation attorney immediately.”