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Whistleblowers Rewarded for Ending Pharmacy’s Phantom Pill Healthcare Fraud Scheme

Date Published
Apr 13, 2023

April 13, 2023.  MedCare Clinic & Pharmacy LLC recently paid the Department of Justice $213,677 to resolve allegations that it violated the False Claims Act by knowingly billing Medicare Part D and North Carolina Medicaid for medications that were never dispensed to beneficiaries. The government’s allegations were brought to light by two former employees of the pharmacy in a qui tam lawsuit. The whistleblowers received 25% of the settlement amount as a reward for coming forward with timely and original information about the pharmaceutical fraud scheme.

The case against MedCare is an example of how whistleblowers can play a crucial role in preventing fraud and abuse of government programs. In this case, Medcare allegedly billed state and federally funded healthcare programs for medications that were not actually dispensed to beneficiaries. The whistleblowers, who were former employees of the pharmacy, were in a unique position to identify these fraudulent billing practices.

The False Claims Act is a powerful tool that allows individuals to bring lawsuits on behalf of the government against individuals or companies that have defrauded the government. In a qui tam lawsuit, individuals sue on behalf of the government and receive a portion of any money recovered by the government, usually between 15-25% of the government’s recovery. In this case, the whistleblowers will receive over $53,000 as their share of the settlement.

The Department of Justice has made it clear that it will continue to aggressively pursue cases of fraud and abuse in the health care industry. Health care providers should take steps to ensure that their billing practices comply with all applicable laws and regulations. This includes having robust compliance programs in place and educating employees on the importance of following proper billing practices. As the U.S. Attorney for the Western District of North Carolina said about this case, “When pharmacies bill government programs for prescriptions that are not disbursed to patients, taxpayer dollars are wasted and finite resources are diverted from beneficiaries in need,” jeopardizing both the solvency of government programs and patients’ lives. Whistleblowers can help keep healthcare providers honest. The False Claims Act provides whistleblowers with a powerful tool to prevent fraud and abuse while also protecting themselves from retaliation.

If you would like to report Medicare or Medicaid fraud, you can contact attorneys at Tycko & Zavareei LLP. Eva Gunasekera and Renée Brooker are former officials of the United States Department of Justice and prosecuted whistleblower cases under the False Claims Act. Eva was the Senior Counsel for Health Care Fraud. Renée served as Assistant Director at the United States Department of Justice, the office that supervises False Claims Act cases in all 94 United States District Courts. Eva and Renée now represent whistleblowers. For a free consultation, you can contact Eva Gunasekera at [email protected] or contact Renée at [email protected] (tel.: 202-417-3664). Visit Tycko & Zavareei LLP’s website for whistleblowers to learn more at

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