Nassau pharmacy fined $100,000 for submitting false claims

Upstate New York Pharmacist to Pay $100,000 for Submitting False Claims to Medicare and Medicaid

Cathy Grossman Admits to Billing for Prescription Drugs that her Pharmacy Never Dispensed

ALBANY, NEW YORK – United States Attorney Grant C. Jaquith and New York State Attorney General Letitia James announced today that Cathy Grossman, the owner and pharmacist-in-charge of Nassau Pharmacy, Inc., will pay $100,000 to resolve allegations that she and Nassau Pharmacy violated the federal and New York False Claims Acts by billing the federal and state governments for prescription drugs that Grossman and her staff never dispensed.

“When pharmacists submit false claims to Medicare and Medicaid, hard-working taxpayers foot the bill,” said United States Attorney Jaquith. “We will continue to protect the public fisc and the integrity of our health care programs by holding health care professionals responsible when they line their pockets improperly.”

“Fraudulently billing Medicare and Medicaid for personal gain is both illegal and immoral,” said Attorney General Letitia James. “Not only did Cathy Grossman steal from government programs intended to support vulnerable populations, but she saddled taxpayers with the bills of this dishonest activity. We will continue to work to root out Medicaid fraud throughout New York State.”

As part of today’s settlement, Grossman admitted that, from March 2010 through March 2017, she submitted or caused others to submit false claims for payment to Medicare and Medicaid for prescription drugs that she and the staff at Nassau Pharmacy never dispensed. In some instances, she billed Medicare and Medicaid for drugs that patients never ordered or never picked up from Nassau Pharmacy. In other instances, Grossman billed the government for brand name drugs but dispensed to her patients less expensive generic alternatives. 

“Health care professionals must be held to a high standard of ethical behavior,” said Scott J. Lampert, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General’s New York Region (“HHS-OIG”). “Along with our law enforcement partners, HHS-OIG will continue to ensure that those individuals and entities that bill federal health care programs do so in an honest manner.”

This investigation was triggered by a whistleblower lawsuit filed under the qui tamprovisions of the federal and New York False Claims Acts, which allow private persons, known as “relators,” to file civil actions on behalf of the government and share in any recovery. The relator in this case will receive $22,000 of the settlement proceeds. The case is docketed with the U.S. District Court for the Northern District of New York under number 1:16-cv-1338.

The investigation and settlement were the result of a coordinated effort among the U.S. Attorney’s Office for the Northern District of New York, the New York State Attorney General’s Office, HHS-OIG, and the Federal Bureau of Investigation. The United States was represented by Assistant U.S. Attorney Adam J. Katz and New York State was represented by Special Assistant Attorney General Jill D. Brenner.

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