K-VA-T Food Stores, Inc., which does business as Food City, has settled allegations under the False Claims Act concerning its practices around the dispensing of opioids and other controlled substances for a substantial sum. The grocery chain, with headquarters in Abingdon, Virginia, will pay $8,488,378 to the United States and an additional $78,621 to Virginia and Kentucky, reports the Department of Justice.
The allegations stated that between January 1, 2011, and December 31, 2018, a total twenty-four Food City pharmacy locations dispensed controlled substances that were medically unnecessary or prescribed without a valid medical purpose. Consequently, Food City is accused of knowingly submitting false claims to federal healthcare programs. "Pharmacies that fill prescriptions for opioids and other controlled substances have an obligation to ensure that those prescriptions are medically necessary," Principal Deputy Assistant Attorney General Brian M. Boynton said, as stated by the Justice Department's announcement.
This settlement agreement resolves a whistleblower lawsuit brought under the qui tam provisions of the False Claims Act by K-VA-T Litigation Partnership, LLP. This provision allows private entities to sue on behalf of the United States and share in any recovery. The qui tam action, Cited as U.S. ex rel. K-VA-T Litigation Partnership, LLP v. K-VA-T Food Stores, Inc. d/b/a Food City, Case No. 3:20-cv-436 (EDTN), results in the claimant receiving $1,527,908 from the settlement.
The efforts to address the opioid crisis are a cross-agency collaboration, as underscored by Special Agent in Charge Kelly J. Blackmon from the Department of Health and Human Services Office of Inspector General. "This case underscores HHS-OIG’s dedication to addressing the nation’s opioid overdose crisis and ensuring that only legitimate, medically necessary prescriptions are dispensed," Blackmon highlighted. Similarly, the settlement has been hailed as an example of steadfast commitment by different federal departments to holding pharmacies accountable for contributing to the opioid epidemic.
The coordinated pursuit of justice in the health care sector emphasizes the government's focus on combating health care fraud, leveraging the False Claims Act, which remains one of the most effective means in this struggle. Tips and complaints from the public about potential fraud, waste, abuse, and mismanagement continue to play a crucial role and can be reported to HHS at 800-HHS-TIPS (800-447-8477). The resolution the government obtained in this case was the result of the collaborative effort between the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section, and the U.S. Attorney’s Office for Eastern District of Tennessee, supported by HHS-OIG and the Defense Criminal Investigative Service (DCIS).
