DOJ’s Motion to Reopen PharMerica Whistleblower Case Highlights Critical FCA Issues

False Claims Act cases often conclude with a negotiated settlement between the Department of Justice (DOJ), defendant(s), and the relator(s). However, settlements are complex matters that contain a number of terms and provisions unique to each individual case.

In today’s post, we discuss a recent agreement reached (or not quite reached) between the DOJ, the relator, and pharmacy company PharMerica surrounding allegedly improper requests for reimbursement for prescription drugs from Medicare and Medicaid. PharMerica, as you may recall, has been implicated in a string of recent False Claims Act lawsuits, but had hoped to put to rest one such claim by a Wisconsin-based pharmacy manager. However, nearly seven months after the ‘settlement’ was reached between the parties, the DOJ has asked the Wisconsin district court to reopen the case, citing several unresolved issues.

Retaliation claims

One of the outstanding issues to be addressed in the United States of America et al v. PharMerica Corporation involves allegations of illegal retaliation against the relator by the PharMerica Corporation. According to the relator’s account, PharMerica unceremoniously terminated her from her position after exposing the gross overuse of Schedule II narcotics – including Fentanyl and oxycodone – in PharMerica-affiliated nursing homes.

Under the False Claims Act and other federal and state statutes, employers are forbidden from firing, demoting, or otherwise adversely treating an employee solely due to that employee’s decision to report misconduct or violations to the appropriate governmental authorities. If an employee is fired for making a report under the False Claims Act, that employee may pursue additional compensatory damages for the wrongful retaliation as a separate matter.

Participation in Medicare and Medicaid programs

Another issue leading to the motion to reopen involves PharMerica’s future involvement in the Medicare and Medicaid programs. When a healthcare provider is caught engaging in unlawful conduct, it is often required to enter into a compliance agreement with the government to ensure future acquiescence with Medicare and Medicaid rules. Compliance agreements may be in place for just a few years, or up to a decade or more, depending upon the severity of the violations.

If a defendant is caught violating the FCA while under a compliance agreement, it stands to lose its eligibility to participate in Medicare and Medicaid programs. In PharMerica’s case, this issue remains unresolved – and it is eager to seek answers as to its future in these programs. Like many healthcare providers, PharMerica derives a significant portion of its income from Medicare and Medicaid enrollees. Accordingly, this major issue must be resolved before an official settlement can move forward.

Contact a reputable whistleblower today

If you have concerns about possible misconduct at your place of employment, we encourage you to speak with a reputable whistleblower attorney right away. For more information about the False Claims Act and how it applies to Medicare and Medicaid fraud, contact Berger Montague today.