On December 23, the Department of Justice (DOJ) announced that K-VA-T Food Stores Inc. (Food City) has agreed to settle allegations arising from the False Claims Act related to its dispensing of opioids. Food City is a regional grocery store chain headquartered in Abingdon, Virginia.
According to the government, “From Jan. 1, 2011, through Dec. 31, 2018, 24 Food City store pharmacies dispensed opioids and other controlled substances that were medically unnecessary, lacked a legitimate medical purpose or medically accepted indication, and/or were not dispensed under valid prescriptions.” The United States further alleges that Food City knowingly submitted or caused false claims to be submitted to federal healthcare programs.
As part of the settlement, Food City will pay the United States $8,488,378, along with an additional $78,621 to the states of Virginia and Kentucky for claims paid to Food City by their state Medicaid programs.
This case originated from a qui tam or whistleblower provisions filed by K-VA-T Litigation Partnership, LLP. The False Claims Act’s qui tam provisions, individuals may file lawsuits alleging government contracting fraud on behalf of the United States. In successful qui tam cases, whistleblowers are eligible to receive between 15 and 30% of the settlement or judgment. In this case, the K-VA-T Litigation Partnership, LLP, will receive $1,527,908 of the proceeds from the settlement.
“The opioid epidemic continues to significantly impact the nation, devastating families across our country,” said Special Agent in Charge Derek M. Holt of the Office of Personnel Management Office of the Inspector General. “We applaud our law enforcement partners and colleagues at the Justice Department for their work to hold pharmacies accountable for actions that could exacerbate the epidemic and endanger the health and safety of patients served by federal health care programs.”
“This settlement demonstrates our commitment to holding pharmacies that knowingly dispense medically unnecessary opioids and other controlled substances accountable for their actions,” said Special Agent in Charge Darrin K. Jones of the Department of Defense Office of Inspector General, Defense Criminal Investigative Service (DCIS), Southeast Field Office. “DCIS thanks the U.S. Attorney’s Office and our investigative partners for their steadfast dedication to fighting the opioid epidemic plaguing our country and helping us protect servicemembers and their families.”
In July 2023, a bipartisan group of senators introduced the False Claims Amendments Act of 2023, which address a few technical loopholes undermining the success of the FCA. The bill is widely supported by whistleblower advocates.
National Whistleblower Center (NWC) has issued an Action Alert calling on Congress to pass the bill.
Join NWC in Taking Action:
Demand that Congress strengthen the False Claims Act
Further Reading:
Food City Agrees to Pay over $8M to Settle False Claims Act Allegations Related to Opioid Dispensing
Bipartisan Legislation Unveiled to Strengthen False Claims Act
