Health Law Daily FCA claim needs more than pharmacist’s assertion that doses are too high
Monday, August 26, 2019

FCA claim needs more than pharmacist’s assertion that doses are too high

By Rebecca Mayo, J.D.

A pharmacist’s claim that a physician is writing too many prescriptions for high doses of controlled substances, with no other medical information about the patients is not enough to support a False Claims Act claim.

A district court dismissed claims against Wal-Mart Stores East, LP d/b/a Walmart, its employees and physicians accused of a conspiracy to create and submit false or fraudulent prescriptions for reimbursement from the government. The court held a pharmacist’s observation of the prescriptions of a handful of patients without verification or supporting documentation of the patients’ medical needs, was not enough to support a claim that the prescriptions were false or fraudulent. Bare-bones assertions that the prescription doses seemed too high, were not enough to show that the prescriptions were fraudulent and therefore not enough to show that presentation of claims for those prescriptions was also false or fraudulent (US ex rel Sheoran v. Wal-Mart Stores East, LP, August 20, 2019, Parker, L.).

Prescriptions. A full-time floater pharmacist at Walmart was assigned to work at a Walmart store in Bad Axe, Michigan. During the time he was assigned to that pharmacy, the pharmacist claimed to have observed large numbers of controlled substances prescribed from a specific physician’s office being presented to the pharmacy. The pharmacist believed these prescriptions to be false or fraudulent based on the high doses of controlled substances, including methadone, morphine sulfate and/or oxycodone. He also claimed that he observed customers attempting to refill prescriptions prematurely, a customer attempting to use a stolen prescription pad, and customers presenting out-of-area prescriptions. The pharmacist relayed his suspicions to his director supervisor as well as other members of management who investigated the concerns. A few months later the pharmacist was terminated. He then filed a qui tam action against Walmart, his supervisors and physicians who allegedly prescribed the medications, alleging violations of the False Claims Act, conspiracy, and retaliation. Walmart and its employees moved to dismiss.

False claims. The court found that the pharmacist’s allegations against the physician were based on his own speculations as to the physician’s prescribing practices with all his patients based on a few, the proper medication dosages necessary to treat varying patients, and the proper administration or combination of medications for differing patients. Further, the pharmacist’s evidence that false claims were submitted to the government was evidence that one patient was charged between 1-2 dollars, which demonstrates that Medicaid or Medicare must have been used. However, the court found this to be transitive inference without the supporting links. The pharmacist also failed to present evidence that the government made any payment at all or more specifically made payment in reliance of the alleged false prescriptions. The court held that accepting the pharmacist’s claims required the court to make a series of unwarranted and wholly unsupported inferences, therefore the physician failed to sufficiently plead a False Claims Act claim against the physician.

The court found that the physician failed to identify any claims that Walmart presented to the government or more specifically a claim presented that was in fact false. The physician’s unsupported assertions of fraud or falsity based on his speculations as to what constitutes a high dose for unidentified patients for whom he had no other medical information, is not enough to support a False Claims Act claim. Since he could not provide evidence that the physician’s prescriptions were false, the claim that Walmart presented false claims must also fail.

Conspiracy and retaliation. The court held that the conspiracy claim failed because the alleged underlying violations of the False Claims Act that would support it, had also failed. There can be no conspiracy to present false claims where there is no evidence that the false claims even existed. Further, the pharmacist attempts to assign knowledge of and compliance with the alleged scheme to the Walmart employees based on the meetings he had with them relating to his suspicions about the prescriptions. However, the court noted again that the pharmacist’s bare-bones allegations were not enough. The pharmacist also failed to plead facts establishing that Walmart knew he intended to file a False Claims Act claim or that he was discharged as a result. Raising suspicions of false prescriptions to supervisors does not constitute notice of an intent to file a False Claims Act claim. Therefore, the court held that the pharmacist failed to sufficiently state his retaliation and conspiracy claims.

The case is No. 13-10568.

Attorneys: Peter A. Caplan, U.S. Attorney's Office, for the United States. Ann Marie Stinnett (The Stinnett Law Group, PLC) for Ashwani Sheoran. Jason R. Evans, Office of Attorney General, for State of Michigan. Louis P. Gabel (Jones Day) for Walmart Stores East, L.P. and Walmart.

Companies: Walmart Stores East, LP; Walmart

MainStory: TopStory CaseDecisions CMSNews ControlledNews FCANews FraudNews MedicaidNews PartANews PartBNews PartCNews PartDNews PrescriptionDrugNews ProgramIntegrityNews MichiganNews

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