Tennessee Pharmacy Settles False Claims Act Case

Relator to receive 18% share of $117,000 settlement of allegations of improper billing to Medicare and TennCare.

Bracker & Marcus LLC is pleased to announce that the United States and the state of Tennessee have settled allegations of fraud by Signal Mountain Pharmacy, LLC brought forward by our client. The allegations, raised under the federal and Tennessee False Claims Acts in the Eastern District of Tennessee, were settled for $117,000, of which our client will receive an 18% relator's share.

FCA cases are often brought against massive corporations, hospitals, and medical groups, resulting in settlements of millions of dollars. This case, by contrast, involved limited claims against a single pharmacy in the affluent suburbs of Chattanooga, for billing Medicare, Tricare, and TennCare for FDA-approved doxycycline while dispensing non-FDA-approved bulk substances, and for failing to reverse claims for prescriptions that were not dispensed.

Because of this, we explained from the beginning that any potential reward would be relatively small. But our client did not hesitate: he wanted only to do the right thing. A whistleblower whose primary interest is righting a wrong is our favorite kind of client, and we filed this case on his behalf shortly thereafter.

Over the next several months, our client even flew across the country (and spent many hours in the car with Julie and myself) to meet with the government for just a few hours to discuss his case. From a purely monetary perspective, his time was better spent working at his new job. But by being willing to give up his time and energy, he not only helped to recover $117,000 for the taxpayers, he ensured that going forward, the pharmacy would only be using FDA-approved substances, safeguarding the health of his former customers.

Not every qui tam firm would have filed this case. When Congress passed and amended the False Claims Act, it wanted to incentivize whistleblowers and FCA attorneys to bring cases no matter how small the fraud may be. And so it made the False Claims Act a "fee-shifting" statute, so that a losing defendant has to pay the hourly rates of the relator's attorneys. Defendants argue that this results in a windfall, but this case exemplifies why the fee-shifting provision exists. Without it, law firms simply could not afford to bring complicated and expensive lawsuits against smaller entities. In fact, even with the fee-shifting, many qui tam firms still require a minimum amount of damages (sometimes in the low millions) before they will consider taking on such a case because of the amount of time and care required to litigate a False Claims Act case.

All of our cases receive the same level of attention, no matter their size, and our cases that are valued in the hundreds of millions of dollars permit us to defend taxpayers and protect whistleblowers in cases valued in the hundreds of thousands of dollars. We felt the fraud in this case was blatant and potentially dangerous, and it was important to us to give the government a chance to stop it.

Bracker & Marcus would like to congratulate our client (who, as you can probably tell, would prefer to stay out of the spotlight). We would also like to congratulate Assistant U.S. Attorney Jeremy Dykes and Tennessee Assistant Attorney General Eli Swiney, whose phenomenal work on this case made the settlement happen.