Florida Compounding Pharmacy and Its Owners to Pay at Least $775,000 to Resolve False Claims Act Allegations
The Department of Justice announced today that Vital Life Institute LLC (formerly known as AgeVital Pharmacy LLC), located in Sarasota, Florida, and owners Jenny and William Wilkins have agreed to pay at least $775,000 to resolve claims that they violated the False Claims Act by engaging in an illegal kickback scheme to induce the referral of compounded drug prescriptions for TRICARE and Medicare beneficiaries. AgeVital and the Wilkinses have agreed to pay additional amounts in the event certain contingencies are triggered.
The settlement resolves allegations that AgeVital, at the direction of the Wilkinses, paid kickbacks to a third-party marketing company to solicit prospective patients for compounded drug prescriptions regardless of patient need. The marketing company arranged for prescribers to sign those prescriptions, which were then referred to AgeVital to be filled. The kickbacks to the marketing entity allegedly consisted of a substantial share of the pharmacy’s TRICARE and Medicare reimbursements. The Anti-Kickback Statute prohibits, among other things, the knowing and willful payment of any remuneration to induce the referral of services or items that are paid for by a federal health care program. Claims submitted to federal health care programs in violation of the Anti-Kickback Statute can subject the violator to liability under the False Claims Act.
“The Department will continue to hold accountable providers that pay illegal kickbacks to induce patient referrals,” said Assistant Attorney General Jody Hunt for the Department of Justice’s Civil Division. “Kickback schemes undermine public trust in our health care system and lead to unnecessary health care costs at taxpayers’ expense.”
“We will not tolerate those who profit at the expense of taxpayers by entering into illegal kickback arrangements,” said U.S. Attorney for the Middle District of Florida Maria Chapa Lopez. “Our office is committed to holding individuals accountable for corporate malfeasance.”
“These prescriptions were ordered to increase profits, not improve the healthcare of patients. Healthcare providers who satiate their greed at the expense of the American taxpayer will not be tolerated,” said Shimon R. Richmond, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services (OIG). “This settlement demonstrates the resolve of OIG and our law enforcement partners to root out fraud, waste, and abuse in our healthcare system.”
“I thank the Department of Justice and the U.S. Attorney for their efforts throughout this investigation,” said Vice Admiral Raquel Bono, director of the Defense Health Agency. “American service members, veterans, and their families appreciate that the Department of Justice works diligently to safeguard their health benefit. The Defense Health Agency continues to work closely with the Justice Department, and other state and federal agencies, to investigate all those who participate in fraudulent practices.”
The settlement resolves a lawsuit filed in federal court in Tampa, Florida, by Manfred Knopf, who allegedly received unwanted compounded medications from AgeVital that were billed to Medicare. That lawsuit was filed under the qui tam or whistleblower provisions of the False Claims Act. The Act permits private parties to bring a lawsuit on behalf of the United States for false claims and to share in any recovery. Mr. Knopf will receive at least $139,500 of the settlement.
The United States’ investigation of this matter was handled by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the Middle District of Florida, the Federal Bureau of Investigation, the Defense Criminal Investigative Service, and the U.S. Department of Health and Human Services Office of Inspector General.
The lawsuit is captioned United States ex rel. Knopf v. AgeVital Pharmacy, LLC et al., Case No. 8:15-cv-2591-T-36JSS (M.D. Fla.). The claims resolved by the settlement are allegations only, and there has been no determination of liability.