North Carolina Pharmacy Settles False Claims Act Case Following Whistleblower’s Qui Tam Suit

Medcare Clinic and Pharmacy, LLC recently settled allegations of False Claims Act violations, as announced by the Department of Justice. The company, based in Indian Trail, North Carolina, agreed to pay the government $213,677. The allegations involved knowingly billing federal healthcare programs for medications that were never dispensed. The government became aware of this through two whistleblowers, former employees of Medcare, who filed qui tam claims under the False Claims Act. The whistleblowers were awarded $53,419.43, which represents roughly 25% of the government’s recovery.

According to the Department of Justice, Medcare billed Medicare and Medicaid for 200 prescription medications between 2016 and 2019, even though the company did not distribute those medications to clients. Inventory records showed insufficient purchases of the medications to account for the prescriptions billed to the programs.

Principal Deputy Assistant Attorney General Brian M. Boynton emphasized that pharmacies should only bill for medications they actually sell, and the government is committed to combating fraud and waste. The United States Attorney expressed the importance of preventing False Claims Act violations, highlighting the negative impact on taxpayer dollars and resources intended for beneficiaries in need.  Noted Whistleblower Lawyer Jason T. Brown, a former Department of Justice Special Agent with the FBI commented, “When the math doesn’t add up these cases become very strong.  The whistleblower’s information corroborated through the papers of ordered versus dispensed prescriptions makes a damning indefensible False Claims Act case.

The state of North Carolina, which has its own False Claims Act, collaborated with the federal government in this case. North Carolina’s Medicaid Investigations Division played a role in assisting with the investigation. The state takes pride in its efforts to combat fraud, having recovered over $1 billion in restitution and penalties through its Medicaid Investigations Division.