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Justice News

Department of Justice
U.S. Attorney’s Office
Eastern District of North Carolina

Wednesday, May 6, 2015

Pharmacy Company Agreed To Pay $5 Million To Settle Claims That It Gave Gift Cards And Waived Copayayments For Medicare And Medicaid Patients In Violation Of The Anti-Kickback Statute

RALEIGH - United States Attorney Thomas G. Walker announced that Physician Pharmacy Alliance, Inc., (“PPA”), agreed to pay $5 Million to settle claims that, under prior ownership, PPA gave improper gift cards in order to induce referrals or enrollments of Medicare and Medicaid patients, and routinely waived copayments of Medicare and Medicaid patients, in violation of the Anti-kickback statute. 

“This settlement demonstrates our commitment to protect taxpayer money and the integrity of Medicare and Medicaid health care programs.  This case underscores for health care providers that if you commit fraud by giving gift cards or routinely waiving copayments in order to induce referrals, you will be liable for substantial damages and penalties under the Anti-kickback statute,” stated U.S. Attorney Walker.

Health Care Providers are prohibited from giving illegal remunerations under the Anti-kickback statute, which includes giving cash equivalents, such as gift cards, and routinely waiving copayments.  PPA provides pharmacy services through home delivery to Medicare and Medicaid patients in North Carolina.  PPA’s current owners agreed to this settlement for damages and penalties based upon allegations of PPA practices that occurred prior to their purchase of the business in 2011.  The claims resolved by civil settlement are allegations only; there has been no determination of liability. 

The settlement was the result of coordinated effort by the U.S. Attorney’s Office for the Eastern District of North Carolina, the United States Department of Health and Human Services Office of the Inspector General, and the North Carolina Department of Justice's Medicaid Investigations Division.  Assistant United States Attorneys Neal Fowler and William Gilmore, along with North Carolina Department of Justice Attorneys Stacy Race and Michael Heavner, directed the investigation and negotiated the settlement. 

Updated July 14, 2015