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Kentucky Hospital Agrees to Pay $10 Million to Resolve False Claims Act Allegations

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Kentucky Hospital Agrees to Pay $10 Million to Resolve False Claims Act Allegations

Jewish Hospital & St. Mary’s Healthcare Inc. d/b/a Pharmacy Plus and Pharmacy Plus Specialty (collectively, Jewish Hospital) agreed to pay $10,101,132 to resolve allegations that they violated the False Claims Act while admitting no liability. This settlement resolves allegations that Jewish Hospital knowingly billed Medicare for prescription drugs that did not meet Medicare coverage requirements, such as the failure to (i) obtain the treating physician’s signature on prescription orders to establish medical necessity, (ii) confirm that refills were reasonable and necessary, and (iii) document that medications were in fact delivered. The settlement also resolves allegations that Jewish Hospital violated the Anti-Kickback Statute by providing Medicare beneficiaries free blood glucose testing supplies and waiving copayments and deductibles for insulin, and submitting claims to Medicare that resulted from this improper remuneration.

The lawsuit was initially brought by a pharmacist under the qui tam provision of the False Claims Act, who will receive $1.85 million as a result of the settlement. The lawsuit is captioned United States ex rel. Stone v. Jewish Hosp. & St. Mary’s Healthcare, Inc., et al., Civil Action No. 3:17-294 (W.D. Ky.).

Read the DOJ press release here.

Laboratory Agrees to Pay $2.1 Million to Resolve False Claims Act Liability for Urine Drug Testing Services

Kentucky clinical laboratory LabTox, LLC agreed to pay $2,101,335 to resolve allegations that it violated the False Claims Act in connection with urine drug testing services it provided to Medicare and Kentucky Medicaid beneficiaries. The government alleged that, from January 2014 to March 2015, LabTox billed Medicare and Kentucky Medicaid for qualitative urine drug screen as if the screens were completed by a high complexity method when they were actually low complexity, which resulted in higher reimbursements to which LabTox was not entitled. The government also alleged that from January 2014 to February 2016 LabTox billed Medicare for specimen validity testing—used to determine whether a urine specimen has not been diluted or adulterated—despite Medicare guidance stating that specimen validity testing should not be separately billed to Medicare.

In addition to the monetary settlement, LabTox also entered into an Integrity Agreement with the US Department of Health and Human Services Office of Inspector General, which requires LabTox to appoint a Chief Clinical Officer to oversee issues related to clinical decision-making, and retain an Independent Review Organization to conduct regular claim reviews. The settlement agreement did not, however, make any determination of liability. The government’s investigation in this matter was prompted by a tip reported to the US Department of Health and Human Services hotline that collects information about potential fraud, abuse, or mismanagement of Medicare or Medicaid funds.

Read the DOJ press release here.

Compounding Pharmacy and Its Owner Settle Anti-Kickback Allegations for $200,000 to Resolve False Claims Act Allegations

Kansas compounding pharmacy Midwest Compounders, Inc. (Midwest), along with its owner, agreed to pay $205,000 to resolve allegations that the pharmacy submitted false claims to Tricare, the health care program for military members, retirees, and their dependents, without admitting any liability. The government alleged that Midwest billed Tricare for claims for compound medications that resulted from unlawful arrangements between the pharmacy and prescribers or marketers, or that sought payment for medically unnecessary dosages or for redundant active ingredients.

Read the DOJ press release here.

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