PharMerica Corp. to Pay $9.25 Million for Depakote Kickback

According to the Department of Justice the nation’s second-largest nursing home pharmacy, PharMerica Corp., has agreed to pay $9.25 million to resolve allegations that it solicited and received kickbacks from pharmaceutical manufacturer Abbott Laboratories in exchange for promoting the prescription drug Depakote for nursing home patients.  PharMerica is headquartered in Louisville, Kentucky.

“Elderly nursing home residents suffering from dementia have little control over the medications they receive and depend on the unbiased judgment of healthcare professionals for their daily care,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “Kickbacks to entities making drug recommendations compromise their independence and undermine their role in protecting nursing home residents from the use of unnecessary drugs.”

Nursing homes rely on consultant pharmacists, such as those employed by PharMerica, to review their residents’ medical charts at least monthly and make recommendations to their physicians about what drugs should be prescribed for those residents.  The settlement announced today resolves allegations that in exchange for recommending that physicians prescribe Depakote, an anti-epileptic drug manufactured by Abbott, to nursing home residents, PharMerica solicited and received kickbacks from Abbott.  The government alleges that the kickbacks were disguised as rebates, educational grants and other financial support.

In May 2012, the United States, numerous individual states and Abbott entered into a $1.5 billion global civil and criminal resolution that, among other things, resolved Abbott’s liability under the False Claims Act for alleged kickbacks to nursing home pharmacies, including PharMerica.  The settlement announced today resolves PharMerica’s role in that alleged kickback scheme.

Approximately $6.75 million of the settlement will go to the United States, while $2.5 million has been allocated to cover Medicaid program claims by states that elect to participate in the settlement.  The Medicaid program is jointly funded by the federal and state governments.

“Nursing home pharmacies accepting kickbacks from drug makers in exchange for prescribing certain prescription drugs puts vulnerable residents at risk for receiving unnecessary medications, corrupts medical decision making, and inflates health care costs,” said Special Agent in Charge Nick DiGiulio of the U.S. Department of Health and Human Services’ Office of Inspector General (HHS-OIG).  “Our agency will continue to root out such corrosive practices from our health care system.”

The settlement partially resolves allegations in two lawsuits filed in federal court in the Western District of Virginia by Richard Spetter and Meredith McCoyd, former Abbott employees.  The lawsuits were filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private individuals to sue on behalf of the government for false claims and to share in any recovery.  The act also allows the government to intervene and take over the action, as it did in part in this case.  As part of today’s resolution, Ms. McCoyd will receive $1 million from the federal share of the settlement amount.

Elderly Overmedicated--When Will This Abuse Stop



Elderly pay the price once again for someone's greed!

NPR (9/5, Jaffe, 519K) reported in its "Shots" blog that a Federal lawsuit against two California nursing homes accused of overmedicating patients may offer a new approach to dealing with the persistent problem of such facilities overmedicating their residents."

 The US Attorney for Northern California "claims that the two nursing homes provided 'grossly inadequate, materially substandard and/or worthless services,'" while they "received about $20 million from Medicare and Medicaid for those services."

 Kelly Bagby, a senior attorney with the AARP Foundation, said, "Under the False Claims Act, the government can ask for triple damages."

Possible Types of Fraud in Nursing Homes



A common type of fraud in nursing homes is unnecessary billing for tests and medical procedures. A nursing home may prescribe an extremely expensive medication to a patient when the reality is that he or she doesn't need that medication at all. The patient may receive medical procedures that are not required to treat his or her condition, and these procedures may even cause unnecessary pain to the patient. Family members have the right to question the medications and procedures administered to their loved one, and they should not be afraid of critiquing the use of certain medications and procedures. It may even be wise to have a second medical opinion when a patient is receiving costly drugs or requires expensive medical procedures. These expensive medications and procedures may be another way to provide “kickbacks” to pharmaceutical companies and other entities. These “kickbacks,” however, are considered illegal in the United States and violate the Fair Claims Act.

ONE SUCH EXAMPLE

Two courageous nurses who worked at Momence Meadows Nursing Center reported that they had  witnessed fraudulent billing practices at the facility to government officials who in turn conducted an investigation into how owners of the facility were providing care. After determining that the allegations of the nurses’ were well founded, the nurses were then permitted to pursue the matter against the nursing home on the government’s behalf in a case referred to as a false claims act lawsuit.

After hearing the evidence in this case, a jury in Federal Court of Southern Illinois reached a verdict against the former owner of the facility.  All told, the jury awarded approximately $28M based upon the fraudulent billing at the facility– billing for services either never provided or provided in an inferior manner. As individuals who initiated this fraudulent billing lawsuit, the nurses are entitled to a percentage of the verdict– reported to be approximately $7 million.