United States Reaches $1 Million Settlement over Waived Pharmacy Copays

ST. LOUIS - The United States Attorney's Office for the Eastern District of Missouri has finalized a civil settlement to resolve allegations that SSM Health Care, at its Saint Louis University Hospital's pharmacy, improperly waived patient copays, causing Medicare and the Federal Employees Health Benefits Program (FEHBP) to overpay for prescriptions.

SSM has agreed to pay $939,290, or double the amount of the restitution owed. SSM will also pay $150,000 in attorneys' fees and costs to the whistleblower who filed a qui tam suit in U.S. District Court in St. Louis in 2023 (4:23-cv-1396). The whistleblower will receive $159,210 of the settlement amount.

The settlement contains no admission of liability by SSM, which fully cooperated in the investigation and took appropriate remedial action.

The qui tam suit alleged that from Sept. 1, 2020, through Feb. 28, 2023, employees of the retail pharmacy at SSM-SLUH, including the pharmacist-in-charge, routinely waived and failed to collect copays. Routine waivers of copays are improper because they are viewed as improperly inducing patients to use a specific pharmacy. They also misrepresent the actual cost of the prescription, resulting in Medicare and FEHBP paying inflated costs for the prescriptions in violation of the False Claims Act.

"Consistently failing to collect patient copays in any instance, other than a well-documented case of financial hardship, violates federal law and inflates the prescription costs that federal health care programs must pay," said U.S. Attorney Thomas C. Albus. "Without the willingness of whistleblowers to shed light on allegations of fraud, preserving government funds would be far more challenging."

"Routinely waiving copays is not a minor oversight-it misrepresents the true cost of prescriptions and leads Medicare to pay improperly inflated amounts," said Special Agent in Charge Linda T. Hanley of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). "These improper financial incentives undermine fair competition and weaken federal program safeguards. HHS-OIG will continue to pursue individuals and entities whose actions compromise the integrity of the Medicare program."

This civil settlement was a result of the combined work of the U.S. Attorney's Office for the Eastern District of Missouri and the U.S. Department of Health and Human Services Office of Inspector General.

Under the qui tam or whistleblower provisions of the False Claims Act, a private party can file a civil action on behalf of the United States, thereby bringing allegations of fraud to the Government's attention, and share in any financial recovery.