PharMerica on the Hook for Alleged SNF “Swapping” Scheme
PharMerica, a major pharmacy provider for long-term care facilities (SNFs), is shelling out a hefty $100 million to settle a decade-old lawsuit. The accusations? Engaging in a kickback scheme that allegedly gave them an unfair advantage in the lucrative SNF pharmacy market. The whistleblower, Marc Silver, a former SNF owner himself, claimed PharMerica was manipulating the system by undercharging facilities for Medicare Part A medications. But there’s a twist: according to Silver’s lawyers, this wasn’t philanthropy. They allege PharMerica used these artificially low prices as a “loss leader” tactic to secure more lucrative Medicare Part D and Medicaid contracts – essentially swapping patients for profit.
A Long and Winding Road to Resolution
The lawsuit against PharMerica dates back to 2011, filed in the District Court of New Jersey. While details of the settlement were just announced, court documents show the case was officially closed on July 3rd. PharMerica maintains its innocence, claiming they operate within all government regulations. However, the hefty settlement suggests otherwise. The company did, however, express relief in a public statement, saying they’re happy to “put this previously disclosed matter” behind them.
Kickbacks and Market Muscle: A Recipe for Unethical Practices?
Lawyers for Silver, led by Sherrie Savett of Berger Montague, believe PharMerica used these alleged kickbacks to unfairly dominate the SNF pharmacy market. Savett estimates this “swapping” scheme potentially impacted 175 nursing homes between 2005 and 2014, a significant chunk of PharMerica’s contracts at the time. While the settlement doesn’t explicitly confirm guilt, Savett hopes it sends a strong message to the industry: price fairly and play by the rules. Importantly, over $70 million of the settlement will go back to federal and state governments, with a portion also going to Silver himself.
Beyond the Settlement: Repercussions and Industry Concerns
This case raises serious questions about the world of long-term care drug pricing and the potential for manipulation. Experts worry such practices could lead to inflated costs for both the government and patients, ultimately impacting the quality of care. Whether this settlement truly discourages similar tactics remains to be seen. However, it certainly highlights the importance of transparency and fair pricing in this critical healthcare sector.
Furthermore, the case reignites discussions about the role of whistleblowers in uncovering healthcare fraud. Silver’s persistence potentially saved taxpayers millions and brought to light potentially unethical business practices. His reward serves as an incentive for others to come forward and expose wrongdoing within the industry.
Looking ahead, regulators and industry watchdogs will likely scrutinize PharMerica’s operations more closely. The settlement may also prompt further investigations into potential kickback schemes within the broader SNF pharmacy market. While the dust settles on this specific case, one thing is certain: the issue of fair pricing and ethical practices in long-term care drug pricing remains a top priority for patients, healthcare providers, and the government.