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Justice News

Department of Justice
U.S. Attorney’s Office
Middle District of Tennessee

FOR IMMEDIATE RELEASE
Tuesday, January 5, 2016

Nashville Pharmacy Services Settles False Claims Act Lawsuit

Nashville Pharmacy Services, LLC, and its majority owner Kevin Hartman have agreed to pay up to $7.8 million to settle allegations that they overbilled Medicare and TennCare for pharmacy services, announced David Rivera, U.S. Attorney for the Middle District of Tennessee.  Nashville Pharmacy Services’ primary location is at 100 Oaks in Nashville, Tenn. and it specializes in dispensing HIV and AIDS-related medications.

“Pursuing individuals and corporations who engage in healthcare 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.”

The settlement resolves the government’s allegations that Nashville Pharmacy Services submitted false claims to TennCare and Medicare primarily during the period from February 2011 through May 2012.  The government’s lawsuit alleged that Nashville Pharmacy Services engaged in the following conduct:

  • automatically refilled medications without a request from the beneficiary, their physician, or a person acting as the beneficiary’s agent, in violation of TennCare’s contractual requirements;
  • routinely and improperly waived TennCare and Medicare co-payments without an individualized assessment of those beneficiaries’ inability to pay;
  • improperly used pharmaceutical manufacturers’ co-payment cards to pay the co-payments of certain Medicare recipients for thirteen Medicare beneficiaries;
  • billed Medicare and TennCare for certain medications that were dispensed after the dates of death of 15 beneficiaries with either Medicare or TennCare coverage; and
  • billed Medicare or TennCare for medications that lacked a valid prescription from a licensed provider for 22 beneficiaries with either Medicare or TennCare coverage.

“This is a great example of the U.S. Attorney’s Office and our office working together to address fraud in our government healthcare programs,” said Tennessee Attorney General Herbert H. Slatery III.  “Pursuing those who knowingly take advantage of the system serves as a deterrent and helps protect funding for our most vulnerable citizens.”

Under the settlement agreement, Nashville Pharmacy Services has already paid $500,000 to the government and will make additional contingency payments to the government for the next five years.  The total payments will depend on Nashville Pharmacy Services’ revenue for each year during that period and could ultimately amount to $7.8 million.  Of that amount, the United States will receive roughly 49 percent of the recovery, and the State of Tennessee will receive roughly 33 percent of the recovery.

The allegations resolved by today’s settlement were originally raised in a lawsuit filed against Nashville Pharmacy Services by Marsha McCullough, a former order entry technician who worked for Nashville Pharmacy Services from May 2011 through July 2012.  She brought her claims under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens with knowledge of false claims to bring civil suits on behalf of the government and to share in any recovery.  McCullough could receive up to $1.4 million as her share of the settlement.

The case was handled by the United States’ Attorney’s Office for the Middle District of Tennessee and the Tennessee Attorney General’s Office and investigated by U.S. Department of Health & Human Services Office of Inspector General and the Tennessee Bureau of Investigation Medicaid Fraud Control Unit.  Assistant U.S. Attorney Ellen Bowden McIntyre represented the United States.  Assistant Attorney General Mary McCullohs represented Tennessee.

The case is docketed as United States ex rel. McCullough v. Nashville Pharmacy Services, LLC, No. 3:12-cv-0823 (M.D. Tenn.).  The claims settled by this agreement are allegations only, and there has been no determination of liability.

Updated January 5, 2016