4 New Jersey Pharmacies to Pay $4.3 Million in False Claims Settlement

Four Hudson County pharmacies have reached settlements totaling more than $4 million with federal authorities over allegations they fraudulently billed government healthcare programs for medications that were never dispensed to patients, according to federal prosecutors.

The settlement resolves claims against pharmacies operating in West New York, Bayonne, Union City, and Jersey City that allegedly submitted false claims to Medicare Part D and the New Jersey Medicaid Program over a period spanning approximately seven years.

Pan American Inc., which faced the most substantial allegations, agreed to pay $3.1 million to settle claims that it submitted fraudulent billings to Medicare Part D and New Jersey Medicaid between January 2015 and January 2022. Federal investigators determined the company had repeatedly billed for prescription medications that were never actually provided to patients.

Well Care Pharmacy will pay $490,000 to resolve similar allegations of fraudulent billing practices. According to prosecutors, the pharmacy submitted claims to Medicare Part D for medications that were never dispensed to beneficiaries between January 2016 and March 2022.

Farmacia Latina Corp. agreed to a $375,000 settlement after investigators alleged the company had falsely billed Medicare for medications never dispensed during a seven-year period from January 2015 to January 2022.

The fourth pharmacy, Perfect Care Pharmacy, settled for $360,000 over comparable allegations of submitting claims for medications that patients never received.

Federal prosecutors noted that while the settlements resolve the allegations, there was no formal determination of liability for any of the pharmacies involved.

This case highlights the ongoing issues of healthcare fraud affecting government insurance programs, particularly Medicare Part D, which provides prescription drug coverage for millions of elderly and disabled Americans. Healthcare fraud costs taxpayers billions of dollars annually and diverts critical resources away from legitimate patient care.

The settlements come amid increased scrutiny of pharmacy billing practices nationwide. The Department of Health and Human Services and the Department of Justice have intensified efforts to combat healthcare fraud through enhanced data analytics and investigative techniques that can identify unusual billing patterns.

Pharmacy fraud schemes often involve billing for medications never dispensed, billing for more expensive medications than were actually provided, or billing for refills that patients never requested or received. Such fraudulent practices not only drain public funds but can also impact patient medication records, potentially creating dangerous situations if healthcare providers rely on incorrect medication histories.

Hudson County, with its dense population and high concentration of healthcare facilities, has seen several healthcare fraud cases in recent years. These settlements represent significant financial recoveries for federal healthcare programs at a time when healthcare costs continue to rise.

The investigation likely involved coordination between multiple agencies, including the Department of Justice, the Department of Health and Human Services Office of Inspector General, and possibly state-level Medicaid Fraud Control Units.

For Medicare and Medicaid beneficiaries, these settlements underscore the importance of regularly reviewing their benefit statements and reporting discrepancies. Patients are encouraged to report instances where they are billed for medications they didn’t receive or services they never obtained.

Federal authorities continue to encourage whistleblowers to report suspected healthcare fraud through established channels, which often include financial incentives for information that leads to successful recovery of government funds.