North Carolina Pharmacy Agrees to Resolve False Claims Act Allegations

MedCare Clinic & Pharmacy, LLC (MedCare), located in Indian Trail, North Carolina, has agreed to pay $213,677 to resolve allegations that it violated the False Claims Act by knowingly billing federal health care programs for medications that were never dispensed.

The United States alleged that, from Jan. 1, 2016, through Dec. 31, 2019, MedCare billed both Medicare Part D and North Carolina Medicaid for 200 prescription medications that MedCare never distributed to beneficiaries. According to the government’s allegations, inventory records showed that MedCare did not buy enough of these medications to fill all of the prescriptions billed to these health care programs.

“Pharmacies may bill only for medications that they actually sell,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “Our office will continue to pursue entities that knowingly and unjustly enrich themselves at the taxpayers’ expense.”

“When pharmacies bill government programs for prescriptions that are not disbursed to patients, taxpayer dollars are wasted and finite resources are diverted from beneficiaries in need,” said the U.S. Attorney Dena J. King for the Western District of North Carolina. “Our office will continue to work with our state and federal partners to investigate and hold accountable those who seek to profit from fraud on federal health care programs.”

The civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act by former MedCare employees Brittanie Henry and Zilphia Adcock. Under those provisions, a private party may file an action on behalf of the United States and receive a portion of any recovery. Henry and Adcock will receive $53,419.43 as their share of the settlement. The qui tam case is captioned U.S. ex rel. Henry v. Pharmacy Holdings, et al., No. 3:20-cv-61 (W.D.N.C.). 

The resolution obtained in this matter was the result of a coordinated effort between the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section, and the U.S. Attorney’s Office for the Western District of North Carolina, with assistance from the Medicaid Investigations Division of the North Carolina Attorney General’s Office, and the Department of Health and Human Services Office of Inspector General.

The investigation and resolution of this matter illustrates the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).

Senior Trial Counsel Jennifer Cihon of the Civil Division, Assistant U.S. Attorney Caroline McLean and Investigator Cathleen Hollowell for the Western District of North Carolina investigated the case.

The claims resolved by the settlement are allegations only. There has been no determination of liability.