Union City Pharmacy to Pay $995K to Settle False Claims Allegations

A Union City pharmacy has agreed to pay $995,420 to resolve federal allegations that it submitted false claims to Medicare and Medicaid for medications it did not dispense, the U.S. Attorney’s Office for the District of New Jersey announced Friday.

People’s Rx, Inc., doing business as The People’s Pharmacy Shoppe, was accused of “knowingly billing a federal health care program for medications that it never dispensed,” according to a statement from U.S. Attorney Alina Habba.

Federal authorities alleged that from January 2, 2015, through January 24, 2022, the pharmacy submitted claims for reimbursement to Medicare Part D and New Jersey Medicaid for prescription drugs that were not provided to patients. “Inventory records showed that People’s did not purchase enough of these medications from wholesalers to fill the prescriptions billed,” the release stated.

The U.S. Attorney’s Office said the settlement was the result of a joint investigation involving its Opioid Abuse Prevention and Enforcement Unit and the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section. The government was represented by Assistant U.S. Attorneys Robert Toll and Kruti Dharia, along with Senior Trial Counsel Jennifer Cihon.

In its announcement, the Justice Department emphasized the broader goal of addressing health care fraud. “The government’s pursuit of these matters illustrates the government’s emphasis on combating healthcare fraud,” the release stated. “One of the most powerful tools in this effort is the False Claims Act.”

The settlement resolves civil allegations only. “The claims resolved by the settlement are allegations only, and there has been no determination of liability,” the U.S. Attorney’s Office clarified.

Federal officials also encouraged individuals to report suspected fraud by contacting the Department of Health and Human Services at 1-800-HHS-TIPS.