False claims allegations lead to settlement for Kentucky hospital

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Kentucky hospital will pay millions to settle allegations it submitted false claims to Medicare.

Jewish Hospital & St. Mary’s Healthcare Inc., which was doing business as Pharmacy Plus and Pharmacy Plus Specialty in Louisville, Kentucky, has agreed to pay $10,101,132 to settle allegations it knowingly submitted false Medicare claims, according to a news release from the U.S. Department of Justice.

These claims were for prescription drugs which did not meet Medicare coverage requirements, including the need to obtain the treating physician’s signature on the order establishing medical necessity, confirming refills were reasonable and necessary, and documenting that the medications were delivered, the release said.

“Healthcare providers will be held accountable when then knowingly submit false claims for prescription drugs that do not meet requirements to establish medical necessity,” Assistant Attorney General Jody Hunt, of the Department of Justice’s Civil Division, says in the release.  “We take appropriate steps to protect Medicare funds and the integrity of our federal healthcare programs.”

The settlement also resolves allegations the organization submitted claims to Medicare from improper payment to patients in the form of free blood glucose testing supplies and co-payment and deductible waivers for insulin; a violation of the Anti-Kickback Statute.


“Paying for medically unnecessary drugs robs vital government health programs of precious resources and can violate the law,” says Derrick L. Jackson, special agent in charge for the Office of Inspector General of HHS.  “We will continue working with our law enforcement partners to protect beneficiaries and taxpayers.”

The allegations came to light through a lawsuit filed by a pharmacist under the whistleblower provision of the False Claims Act, which allows private parties to bring a lawsuit on the government’s behalf and share any recovery. The pharmacist will receive $1.85 million.

Recently, another whistleblower lawsuit led to a $46 million payment from California healthcare giant Sutter Health to resolve allegations of Stark Law violations, according to an earlier news release from the Department of Justice.

In that case, Sutter Memorial Sacramento was accused of violating the law between 2012 and 2014 by billing Medicare for services rendered by physicians with a surgeons medical group that exceeded the fair market value of the services provided, as well as other violations.