Pharmacist Claims AlixaRx Took Govt. Money for Dispensed Drugs That Weren’t Prescribed

In May, the Department of Justice announced that AlixaRx LLC would pay $2.75 million to resolve allegations brought by our whistleblower client under the False Claims Act. AlixaRx is a national provider of pharmacy services to long-term care facilities.

Our client, a former pharmacist employed by the company, worked at the Atlanta hub and was familiar with the dispensing practices that were at the heart of the case.

Healthcare Fraud Made Easier With Automated Dispensing Units, Relator Says

AlixaRX’s “innovative” method of improving efficiencies in dispensing centered around its “Automated Dispensing Units”—basically drug vending machines—that were used in combination with electronic medication cabinets to store, stock, package, label, and dispense over 300 medications, one dose at a time.

According to AlixaRX’s website and promotional materials, this enhanced pharmacist-nursing staff “collaboration”. Plus, they claim, the drug vending machine model saves on nursing time and costs, reduces drug waste, and replaces the need for the manual “tackle box” solution where each patient’s drugs are stored on-site within the facility.

In reality, the Relator alleged, this dispensing methodology made it more efficient to fraudulently obtain funds from government health programs by:

(1) Dispensing prescription drugs without either a prescription or a practitioner’s medical judgment about whether the drugs are reasonable or medically necessary;

(2) manufacturing fake drug dispensing “emergencies” and then claiming payment for dispensed CSA Schedule II controlled substances, including dangerous and addictive drugs such as morphine and oxycodone, despite failing to obtain valid prescriptions; and

(3) double-billing the government for prescription drugs by billing for claims under Medicare Part D for claims that had already been reimbursed to long-term care facilities under Part A.

In real emergencies, the law allows Schedule II drugs like morphine and codeine to be dispensed based on an oral authorization. However, the medicine can only be billed to the government if a valid written prescription is obtained within seven (7) days after the drugs are dispensed.

Relator Alleges Fraudulent Billing

As explained by Relator, AlixaRx’s fraud scheme has designed a dispensing system that artificially creates false “emergencies” by having the drug vending machines withhold a warning when a prescription dose would expire.

This leads the nursing staff to call in an “emergency” prescription refill, for which one of AlixaRX’s seven nationwide hubs would then dispense three days’ dosage of the controlled substances.

The company then fraudulently billed the government despite not having a written prescription, and in most cases, failed to obtain the prescription within the required seven days.

Next, to conceal its failures, AlixaRx began asking its Schedule II prescribing physicians to provide backdated written prescriptions to cover the “emergency” dispenses.

Contact a Healthcare Fraud Attorney Today

This case was intervened and settled by the United States Attorneys’ Office for the Northern District of Georgia.

If you are aware of any similar activities, contact a healthcare fraud attorney at Bracker & Marcus LLC as soon as possible. Experienced representation gives whistleblowers major advantages when it comes to workplace retaliation and government intervention.