Nursing Home Fraud

Medicare and Medicaid recipients who reside in skilled nursing facilities (SNFs) or long term care facilities (LTCs) can become victims of pharmacy fraud because of the several ways that fraud can be committed. Whistleblowers can and do become involved in these cases, bringing qui tam suits under the False Claims Act against those pharmacies which would seek to defraud Medicare and Medicaid.

One 2016 whistleblower case involving pharmacy fraud concerned Omnicare and kickbacks, to the tune of over $28 million. Yet another case, settled in the District of South Carolina during late December, 2015, implicated Pharmerica, which serves hundreds of SNFs and LTCs in the United States. Pharmerica was alleged to have illegally promoted the drug Aranesp, an Amgen, Inc., drug prescribed for anemia.

What Can SNF/LTC Pharmacy Fraud Entail?

Pharmacy fraud at SNFs and LTCs can encompass a number of areas that touch on the False Claims Act, including the following:

• Billing for a full prescription order (for example, 30/60/90 days of medication) but filling it only partially
• Billing for drugs that went unused, including any drugs returned to the pharmacy whose return was not reported to Medicare/Medicaid
• Charging Medicare/Medicaid patients more than others for the same drugs
• Providing kickbacks, bribes, or otherwise illegally promoting the use of certain drugs over others
• Deliberately providing defective, substitute, or ineffective medications, which can directly harm a patient’s health
• Any fraudulent activity performed by a pharmaceutical benefits manager (PBM) or the PBM’s agency
• Promoting or selling drugs for uses other than those approved by the FDA. This is known as off-label marketing.
• Billing Medicare/Medicaid for patients who are covered by private insurance
• Any fraud involving the licenses or certifications for pharmacy employees.

Adulterated Drugs

An additional concern that can be difficult to track or prove involves using drugs left over from patients who either died or no longer needed the drugs. These drugs are often handled in nonsterile ways and also removed from packaging so that expiration dates and lot numbers (needed for recalls in the event of serious problems) are no longer associated with the drugs. The drugs can even become mixed up—many pills look alike—so that a drug for one ailment ends up as part of a prescription for a different ailment.

As you might imagine, such a situation can easily turn serious, even deadly, when it comes to those taking the drugs.

In such cases, the nonsterile, nontrackable drugs (now considered adulterated drugs under the law) are illegally provided to patients and Medicare/Medicaid is charged for them. The law strictly forbids selling adulterated drugs, and if a federal health care program is billed for them, it is a violation of the False Claims Act.

Recent Cases

Many SNF and LTC pharmacy false claims cases involve some form of fraudulent billing or illegal kickbacks/promotion. In fiscal year 2014, six of eight cases mentioned in the government’s Health Care Fraud and Abuse Control Program (HCFAC) Report included illegal kickbacks.

From 2014 through 2016, the following pharmacy fraud cases were successfully resolved:

• October, 2016: The largest nursing home pharmacy in the U.S., Omnicare, Inc., settled for over $28 million amid allegations that it solicited and received kickbacks for promoting Depakote, manufactured by Abbott Laboratories. The whistleblower who brought the qui tam suit will receive $3 million from the federal share; 45 states were also involved. This case was not Omnicare’s first brush with the Department of Justice; in June, 2014, the company settled with the U.S. government for $124 million to resolve allegations that it offered improper financial incentives to SNFs. In the 2014 case, the whistleblower received $17.24 million.
• May, 2015: Pharmerica, the second-largest nursing home pharmacy in the U.S., agreed to pay $31.5 million. It is alleged that the company violated the Controlled Substances Act because they provided Schedule II drugs (such as oxycodone and morphine) without having a valid prescription, then submitted false claims for the improperly-dispensed drugs. The whistleblower’s portion was $4.3 million.
• May, 2014: In a non-whistleblower case, a pharmacy owner in Louisiana pled guilty to repackaging and reselling drugs that she obtained by bribing nursing home workers to return to her. The plea agreement stated that the returned medications, some past their expiration dates, were returned in garbage bags, placed in new blister packs, and relabeled to be resold as new. The medications were billed as new drugs, and the Medicare fraud added up to $2.25 million.

Whistleblowers, employing the qui tam provisions of the False Claims Act, are reporting those who are alleged to be guilty of the pharmacy fraud that is robbing our government health care programs and endangering the lives of patients.

Working with whistleblowers tirelessly to shed light on fraudulent practices.

If you think you have the facts needed to bring a whistleblower case, the experienced whistleblower attorneys at the Louthian Law Firm can review your case and help you file the appropriate disclosure statement. Under some circumstances, the government will intervene, or join in your lawsuit.

Your chances of succeeding are greater if your whistleblower claim is substantive, clear, and to the point. Because of this, meeting with a qualified whistleblower attorney can increase your chances of winning. The Louthian Law Firm can help you form your claim so that the government will be more inclined to intervene in your case; government intervention can sometimes increase the chances of recovering reward money. Even if the government decides not to intervene, it could still be a good idea to pursue your case without government involvement. Our strong support system can assist you through every step of the process.

For a free, confidential evaluation of your case, call the Louthian Law Firm today at 1-803-454-1200 or, if you prefer, you can fill out our online contact form.