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Justice News

Department of Justice
U.S. Attorney’s Office
Northern District of Iowa

FOR IMMEDIATE RELEASE
Friday, November 15, 2019

Compounding Pharmacy and Its Owner Pay More Than $200,000 to Resolve False Claims Act Allegations

Allegedly Violated an Anti-Kickback Law Relating to Tricare Prescriptions

A compounding pharmacy headquartered in Lenexa, Kansas, along with its owner, agreed to pay $205,000 to resolve allegations that the pharmacy submitted false claims to Tricare, the health care program for uniformed service members, retirees, and their families.  Neither the owner nor the pharmacy admitted liability as part of the settlement.   

Midwest Compounders, Inc., and its owner, Troy DeLong, agreed to settle allegations that claims submitted to Tricare from June 2012 to December 2014 were fraudulent for purposes of the False Claims Act.  The United States alleged that certain claims for compound medications during this period resulted from unlawful arrangements between the pharmacy and prescribers or marketers, or were otherwise improperly inflated in that the claims sought payment for medically unnecessary dosages or for redundant active ingredients. 

The allegations were made in a qui tam, or whistleblower, lawsuit.  The lawsuit was brought under the False Claims Act, which punishes violators who submit false claims to the government or who knowingly attempt to avoid an obligation to repay federal funds.  The whistleblower provisions allow private parties who have knowledge of fraud committed against the government to file suit on behalf of the government and share in any recovery.  The individual who filed this lawsuit received a share of the total amount recovered. 

The matter was handled by Assistant United States Attorney Jake Schunk and investigated by the Defense Criminal Investigative Service.  The lawsuit is captioned United States ex rel. Sten v. Midwest Compounders, et al.          

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Topic(s): 
False Claims Act
Health Care Fraud
Component(s): 
Updated November 15, 2019