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U.S. Reached an $8M Settlement Against Blanding Health Mart Pharmacy

— July 16, 2015


The U.S. reached an $8M settlement against Blanding Health Mart Pharmacy over violations of the False Claims Act (FCA). The government alleged that Blanding, a compounding pharmacy, was knowingly billing TRICARE for improperly written and medically unnecessary compounding pain medicine. TRICARE is the Department of Defense’s military insurance program providing civilian benefits for military personnel, retirees and their dependents.

While not an admission of liability, the $8,441,107 settlement covers the alleged improper billing that took place between February 9, 2015 and April 13, 2015. In addition to billing for medically unnecessary prescriptions, Blanding allegedly billed for medicines prescribed by doctors who hadn’t actually seen the patients.

As one can imagine, the federal government and the DoD took this case very seriously. The Defense Criminal Investigative Service (DCIS), the FBI, the Defense Health Agency Program Integrity Office and Assistant U.S. Attorney Jason Mehta conducted the investigation. U.S. Attorney A. Lee Bentley, III announced the settlement.

Attorney Bentley said, “This case was developed as part of a broader effort by our office to identify and target unscrupulous compounding pharmacies. Since the beginning of the year, we have been focusing on pharmacies that have abused the TRICARE program and defrauded the government.”

DCIS Special Agent in Charge John F. Khin of the Southeast Field Office added, “This settlement highlights another step forward by the Defense Criminal Investigative Service and its law enforcement partners to protect the integrity of the Department of Defense health care program. Fraud and abuse by pharmacies and medical providers which bill for compounded pain prescriptions is a significant threat to the DoD health care system. TRICARE beneficiaries must be made aware that any medications that are not individually prescribed or dispensed by a bona fide treating physician for a specific medical condition can be ineffective or unsafe.”

This successful resolution was another victory for the Health Care Fraud Prevention and Enforcement Action Team (HEAT). The U.S. Attorney General and the Secretary of Health and Human Services announced the HEAT initiative in May 2009.

This multi-agency team effort has worked to prevent and reduce Medicare and Medicaid financial fraud in addition to focusing on TRICARE. The FCA is one means of accomplishing this goal. The Department of Justice has used the FCA to recover more than $24B since January 2009. An estimated $15.3B of that amount came from cases of fraud against federal health care programs.

Well done, team! What a great way to bring the HEAT!


United States Settles False Claims Act Allegations Against Jacksonville-Based Compounding Pharmacy for More Than $8 Million

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