Towson, Maryland — A Maryland-based long-term care pharmacy has agreed to pay more than $5.3 million to settle allegations that it billed federal healthcare programs for prescription drugs dispensed to assisted living residents without valid prescriptions, according to the Department of Justice.
The settlement involves Remedi SeniorCare Holding Corp., which operates pharmacies serving nursing homes and assisted living facilities across multiple states. Federal prosecutors alleged that from January 2015 through March 2021, the company submitted false claims to Medicare and Medicaid for drugs that lacked proper prescriptions.
How the Case Started
The investigation began in December 2020 when two former Remedi employees, Maureen Gearhart and Laura Griffieth, filed whistleblower claims under the False Claims Act. That law allows private citizens to sue on behalf of the government and receive a portion of any recovery.
According to the Justice Department, Remedi dispensed prescription medications to residents of assisted living facilities in various states even though no valid prescription existed. The practice put residents at risk and undermined safeguards designed to protect patient health, said Miranda L. Bennett, acting deputy inspector general for investigations at the Department of Health and Human Services Office of Inspector General.
The Settlement Terms
Under the agreement, Remedi will pay $5,389,780 in restitution, plus 4.5% interest. The first payment of approximately $1.19 million was due September 11, with scheduled payments continuing through October 2030. The Justice Department noted the settlement amount was based on Remedi’s ability to pay.
The whistleblowers will receive 20% of each federal payment, plus separate compensation for expenses and attorneys’ fees. Remedi also agreed to pay $110,220 in restitution to state Medicaid programs.
The settlement includes no admission of liability. “The claims resolved by the settlement are allegations only, and there has been no determination of liability,” the Justice Department stated.
Industry Context
The Remedi case comes as federal regulators intensify scrutiny of long-term care pharmacies. Just last week, Omnicare and its parent company CVS Health won court approval for a bankruptcy plan following a $949 million judgment in a separate False Claims Act case involving prescription dispensing practices at assisted living communities and other non-skilled nursing residential facilities.
CVS ultimately reached a $440 million settlement with the Justice Department to resolve those claims. The case centered on allegations that Omnicare filled prescriptions beyond one year without valid prescriptions for residents in assisted living communities, group homes, and independent living facilities.
Long-term care pharmacies play a critical role in the healthcare ecosystem, managing complex medication regimens for vulnerable populations. But the sector has faced mounting compliance pressure as regulators crack down on practices that threaten program integrity and patient safety.
Remedi, which was acquired by Clarest Health in January 2024, did not respond to requests for comment. The settlement agreement specifies that if Remedi or its assets are sold before the full amount is paid, the remaining balance becomes due immediately at closing.
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