Nashville company to pay $7.8M after charging for dead patients

A Nashville company will pay as much as $7.8 million in a settlement related to allegations that it charged Medicare and TennCare for medications for dead patients.

The settlement involves Nashville Pharmacy Services, which is based in 100 Oaks and specializes in dispensing HIV and AIDS medications, and majority owner Kevin Hartman. U.S. Attorney for the Middle District of Tennessee David Rivera announced the settlement of the False Claims Act case on Tuesday.

According to a news release, the allegations were that the company billed Medicare and TennCare for medications for 15 patients after they had died and billed for medications for 22 people who did not have prescriptions. The news release says the company automatically refilled medications without requests from TennCare patients or doctors and improperly handled co-payments, among other things.

That occurred between Feb. 2011 and May 2012, according to the federal government.

Per the terms of the settlement, which does not include admitting liability, Nashville Pharmacy Services must make contingency payments based on its revenue to the federal and state governments for the next five years. That amount could be as high as $7.8 million, according to Rivera. The U.S. government will receive about half of the money while the Tennessee government will get about a third, according to the news release.

Marsha McCullough, a former order entry technician for the company, will receive up to $1.4 million, according to Rivera. McCullough worked for the company for more than a year and brought claims of wrongdoing under the federal whistleblower provisions of the False Claims Act, meaning she is entitled to a cut of a settlement if the government takes over the case, which it did.

Rivera, the federal prosecutor, said in a statement that targeting health care fraud is a priority of his office.

"We remain committed to working with our state and federal partners to hold those accountable who attempt to profit at the expense of taxpayers and compromise the integrity of our health care programs," Rivera said in a statement.

Reach Stacey Barchenger at 615-726-8968 or on Twitter @sbarchenger.