Pharmacy must pay $7.8 million for knowingly dispensing HIV meds to dead patients

An independent local pharmacy Nashville Pharmacy Services which specializes in HIV and AIDS-related medications must pay $7.8 million to settle claims that it overbilled Medicare and TennCare, including by dispensing medicine in the names of patients who had died.

In a statement, officials with the U.S. Attorney’s Office for the Middle District of Tennessee said Nashville Pharmacy Services already has paid the government $500,000 and will continue to make payments based on its revenues for the next five years. The federal government will receive 49 percent of those payments, while Tennessee will collect a third and former NPS employee Marsha McCullough — who in 2012 filed a qui tam lawsuit claiming False Claims Act violations — will receive up to $1.4 million.

The settlement covers allegations that NPS, which is based in 100 Oaks but also has offices in Paducah and at TriStar Skyline Medical Center, submitted false claims from early 2011 through May 2012. As part of the agreement, 15-year-old NPS has not admitted liability.

“Pursuing individuals and corporations who engage in health care fraud remains a top priority of the U.S. Attorney’s Office,” said U.S. Attorney David Rivera. “We remain committed to working with our state and federal partners to hold those accountable who attempt to profit at the expense of taxpayers and compromise the integrity of our healthcare programs.”

In addition to the U.S.’ Attorney’s Office, the Tennessee Attorney General’s Office, the U.S. Department of Health & Human Services Office of Inspector General and the Tennessee Bureau of Investigation Medicaid Fraud Control Unit helped investigate and prosecute the case. Assistant U.S. Attorney Ellen Bowden McIntyre represented the federal government, while Assistant Attorney General Mary McCullohs represented Tennessee.

Per the terms of the settlement, which does not include admitting liability, Nashville Pharmacy Services must make contingency payments based on its revenue to the federal and state governments for the next five years. That amount could be as high as $7.8 million, according to Rivera. The U.S. government will receive about half of the money while the Tennessee government will get about a third, according to the news release.

Marsha McCullough, a former order entry technician for the company, will receive up to $1.4 million, according to Rivera. McCullough worked for the company for more than a year and brought claims of wrongdoing under the federal whistleblower provisions of the False Claims Act, meaning she is entitled to a cut of a settlement if the government takes over the case, which it did.

Rivera, the federal prosecutor, said in a statement that targeting health care fraud is a priority of his office.

“We remain committed to working with our state and federal partners to hold those accountable who attempt to profit at the expense of taxpayers and compromise the integrity of our health care programs,” Rivera said in a statement.