Big pharmaceutical companies that commit Medicare and Medicaid fraud cost taxpayers billions. (Photo Credit: CC BY-SA/BArchBot/Wikipedia)

When a small pharmacy company hauls in $168.7 million in annual revenue without filling many prescriptions, the medical community takes notice. According to the Los Angeles Times, Ven-A-Care of Florida Keys, Inc., makes considerable money as a whistle-blower that reports drug companies that overcharge Medicare and Medicaid to federal authorities. While the company has been called a “professional bounty-seeker” by critics, the truth is is that tens of millions of dollars are at stake.

Ven-A-Care faces off with big pharmaceuticals

In its whistle-blower capacity, Ven-A-Care researches the price it pays for drugs versus those reported by big pharmaceuticals to the federal government for reimbursement purposes. If there is a large discrepancy, Ven-A-Care files suit on behalf of the U.S. Government.

One example was a 2005 suit in which a 1-gram vial of an antibiotic called vancomycin was sold to pharmacies at $6.29 each, but the pharmaceutical company charged Medi-Cal $58.37. Similarly, 50-milligram tablets of the blood pressure medication atenolol cost pharmacies $3.05, while Medi-Cal was charged $70.30. According to the Los Angeles Times, these are small examples. The State of California has recovered at least $95 million of late, thanks to Ven-A-Care’s efforts.

“I think Ven-A-Care has played a predominant role in alerting state and federal governments about … fraud,” said California Supervising Deputy Attorney General Nicholas Paul.

The venal meet Ven-A-Care

Court records indicate that Ven-A-Care has won settlements in at least 18 health insurance over-billing cases since 2000. While the small pharmacy has collected about $380 million in bounty funds, state and federal governments across the U.S. have pulled in around $2.2 billion.

“(Ven-A-Care is) cleaning up a huge cesspool,” said Nevada attorney and former Medicaid fraud investigator L. Timothy Terry. “Without their efforts, taxpayers would be gouged out of I don’t know how much money.”

Detractors call for cap to whistle-blower payments

Insiders like former federal healthcare fraud investigator Michael Loucks believe that companies like Ven-A-Care are taking advantage of a near-limitless jackpot system. Now a defense attorney, Loucks told the Times that a $2 million cap should be instituted, large enough to still encourage whistle-blowers, but small enough to keep the government cash advance under control.

Ven-A-Care attorney Jim Breen sees caps as too prohibitive. The legal costs alone in pursuing big pharmaceuticals – Ven-A-Care’s legal team works in tandem with the federal government in many cases – necessitate a big return.

Sources

Los Angeles Times: http://www.latimes.com/news/nationworld/nation/la-na-whistle-blower-20110124,0,5954723.story

Medicare fraud hurts U.S. taxpayers

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