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What should you know about pharmacy fraud?

On Behalf of | Nov 28, 2023 | Whistleblowing |

Patients and healthcare providers alike depend on pharmacies to ensure that patients have the medications they need. Unfortunately, some pharmacies attempt to take advantage of Medicare and Medicaid patients by engaging in fraudulent activities to collect higher dispensing dollars and/or to kickback to doctors or patients to obtain referrals and repeat business.  What should you know about pharmacy fraud, and how can you respond to this illegal activity?

What forms could pharmacy fraud take?

Work in a pharmacy requires employees to connect with patients, doctors, insurance providers and government programs as they provide patients with the drugs they need. As a result, fraud in a pharmacy setting can involve a variety of acts. These include:

  • Dispensing drugs without a valid prescription – Prescribing medication is a complex matter, and providing medication without a prescription could endanger a patient’s health. This may include automatically filling and billing for a drug the patient no longer uses.
  • Dispensing less medication than the amount billed  – Pharmacies must provide patients with a specific quantity of drugs. Filling less than the prescribed amount means that the patient gets less than they paid for.
  • Dispensing expired medication – Some pharmacists may attempt to profit by dispensing expired drugs rather than appropriately disposing of them.
  • Drug diversion – This form of fraud occurs when someone illegally uses or distributes prescription drugs. Diversion can include stealing medication or selling drugs for personal gain.
  • Prescription drug switching – Sometimes, a pharmacy may illegally substitute a generic medication while receiving payment for a more expensive brand-name drug.
  • Formula upgrades – specialty pharmacies often add in more expensive ingredients when mixing medications and then they charge Medicare or Medicaid the higher but medically unnecessary amount.
  • Kickbacks – Both receiving and offering kickbacks violate federal law. These kickbacks may come in the form of money, but they may also include discounts or other benefits that are not direct payments to patients and/or to referring providers or healthcare institutions.
  • Submitting fraudulent claims for reimbursement – Programs like Medicare reimburse pharmacies, and some may attempt to illegally benefit from this reimbursement by submitting fraudulent claims. This may include submitting multiple claims with different dispensing dates; submitting claims brand name drugs when only the generic was prescribed; adding medically unnecessary ingredients to the prescription to inflate the invoice; not collecting the required co-pay; or submitting claims for prescriptions that the pharmacy did not fill.
  • Reporting a false price – When submitting a claim for reimbursement, pharmacies must provide accurate information. Some pharmacists may attempt to receive additional reimbursement by filing a claim that cites an inaccurately high price for a medication.
  • Programming software to provide fraudulent billings – e.g. for brand named drugs whether or not prescribed; writing off co-pays when no ability to pay analysis was conducted, etc.

Fraud in a pharmacy setting is not just unethical and illegal – it can also put patients’ health at risk if they do not receive the medication they need.

How can you respond to fraud that occurs in a pharmacy?

Because pharmacy fraud can lead to increased costs and put patients at risk, reporting fraudulent activity is vital. If you have evidence of pharmacy fraud, the law may protect your ability to report that fraud. This could involve maintaining your anonymity when reporting and protecting you from retaliation.

You may also benefit directly from reporting illegal activity. Since 2011, whistleblowers have received more than $6 billion in recognition of their actions. But these payments to whistleblowers are only provided to those who obtain legal counsel and formally file a complaint in federal court – not to those who merely call a government hot line as they are not entitled to a reward.

Receiving these protections and financial awards may depend on taking care when reporting. An attorney who understands the challenges faced by whistleblowers can offer insights into your legal options and help you navigate the whistleblowing process. With the proper guidance, you can protect your interests while holding pharmacies responsible for fraud.

Cross Law Firm has obtained multi-millions of dollars for their pharmacy whistleblower clients.