7.75 Million U.S. Dollars Record-Setting Drug Diversion Civil Settlement Between McLaren Health Care Corporation and the Federal Government Announced by United States Attorneys Matthew Schneider and Andrew Birge

7.75 Million U.S. Dollars Record-Setting Drug Diversion Civil Settlement Between McLaren Health Care Corporation and the Federal Government Announced by United States Attorneys Matthew Schneider and Andrew Birge

Michigan’s Western and Eastern Districts United States Attorneys’ Offices reported on 19th January 2021 that MHCC (McLaren Health Care Corporation) has assented to reimburse the United States government 7,750,000 U.S. dollars to settle claims that McLaren Health Care Corporation breached certain Controlled Substances Statute’s provisions, 21 U.S.C. §§ 801-904.  The civil resolution originated from a years-long inquiry by the DEA (the United States Drug Enforcement Administration) into McLaren Health Care Corporation’s handling of controlled substances.  It is the country’s largest resolution of its type involving accusations of drug diversion at a health care program.

The United States Drug Enforcement Administration started its investigation upon learning that an uncertified substance abuse rehabilitation facility was improperly receiving controlled substances from a McLaren Health Care Corporation subsidiary pharmacy in Michigan’s Western District by calling in prescriptions for “office stock.”  The DEA (United States Drug Enforcement Administration) expanded its inquiry and determined that particular McLaren Health Care Corporation’s controlled substances practices at various facilities across the Michigan State breached the Controlled Substances Statute and its implementing provisions.

The government purported, among other things, that McLaren Yale Pharmacy and McLaren Port Huron Pharmacy in Michigan’s Eastern District distributed Schedule II medications without prescribed prescriptions, and in spite of red flags that those medications were being diverted by McLaren Health Care Corporation’s pharmacist-in-charge.  The red flags comprised: pattern prescriptions for the same kind of medications, in the same bulks, from the similar prescriber; substantial outlier medication volumes for specific prescribers and patients; prescriptions for excessive volumes of highly-addictive Schedule II medications; repetitive early prescription refills; prescription entries in the names and identities of phony patients; and inconsistencies between the fund reported and fund collected for controlled substance prescriptions.  The United States purported that other McLaren Health Care Corporation pharmacies also distributed controlled substances in spite of clear “red flags” that the fundamental prescriptions may have been distributed without an authentic medical purpose or were otherwise illegal.

The United States further purported that various McLaren Health Care Corporation facilities breached the Controlled Substances Statute’s recordkeeping regulations, including by not notifying the United States Drug Enforcement Administration of known worker thefts of controlled substances.  These breaches the government purported originated in part from specific facility policies that were contrary to the Controlled Substances Statute’s requirements and McLaren Health Care Corporation’s failure to amend other legacy rules that remained after McLaren Health Care Corporation bought corporate health care providers.

As part of the settlement deal, McLaren Health Care Corporation confessed that:

The Yale Pharmacies and McLaren Port Huron never had written prescriptions for about 1,255 Schedule II prescription events from 1st May 2014 to 22nd February 2018;

McLaren Health Care Corporation’s Prescription Services pharmacy issued controlled substances to an uncertified rehabilitation facility based in Boyne Falls, Michigan, from 22nd November 2015 to 13th November 2017 without conducting a good faith investigation into whether that rehabilitation facility was certified by the United States Drug Enforcement Administration;

McLaren Greater Lansing failed to notify the United States Drug Enforcement Administration of specific controlled substances thefts from 27th July 2007 to 31st May 2019;

Controlled substances theft and diversion took place at certain of McLaren Health Care Corporation’s s locations; and

Some of McLaren Health Care Corporation’s corporate rules, such as legacy policies that remained intact after McLaren Health Care Corporation’s integration with Port Huron Hospital, were inconsistent with the requirements of the Controlled Substances Statute and its guidelines.

Michigan’s Western District United States Attorney Andrew Birge stated that while the nation’s health care programs give crucial services to patients, they convey broader public responsibilities as barricades against the drug diversion that promotes the rising opioid pandemic in the Michigan State.  United States Attorney Andrew Birge further added that hospitals and health care programs handle substantial bulks of controlled substances and should meet their legal responsibilities for handling those medications pursuant to the Controlled Substances Statute. United States Attorney Andrew Birge concluded his statement by saying that this resolution reveals their offices’ shared commitment and dedication to working supportively, along with their law enforcement agency partners, to hold answerable even the largest health providers when they break the law.

Matthew Schneider, United States Attorney, stated that at around 7.8 million U.S. dollars, this is the biggest civil Controlled Substances Statute settlement agreement in the U.S. history entailing a health care program whose internal practices were so limited that it permitted the diversion of medications, such as opioids. U.S. Attorney Matthew Schneider further stated that McLaren obviously never had a good system installed to catch these glitches.  But currently, under this settlement agreement, McLaren is advancing and implementing more powerful compliance actions.  That is precisely what we expect of Michigan-based corporations who break the law: they acknowledge their errors and learn from them, which benefits their workers and the general public, added U.S. Attorney Matthew Schneider.

Special Agent Keith Martin in Charge of the United States Drug Enforcement Administration stated that everybody, from the controlled substance manufacturer to the prescribing healthcare practitioners, has a legal duty to ensure pharmaceuticals never get into the wrong individuals.  Special Agent Keith Martin assured that they will investigate and bring them to justice once they breach these obligations.

As part of the settlement agreement, McLaren Health Care Corporation signed a three-year Memorandum of Agreement with the United States Drug Enforcement Administration that, in addition to, prescribes the program’s drug-handling obligations, decrees external controlled substance audits, and demands McLaren Health Care Corporation to set up a broad-based educational system intended on combating drug diversion within the workplace.  In attaining this settlement deal, the U.S. appreciated the significant measures McLaren Health Care Corporation took in reply to DEA’s inquiry to address glitches in its controlled substances handling.

The United States Drug Enforcement Administration handled the investigation of this matter.  The United States Assistant Attorney Adam Townshend and the United States Assistant Attorney Caroline Burgunder dealt with the prosecution of this matter on behalf of the American government.

The accusations resolved by the settlement deal are just allegations, and there has been no determination of responsibility.

Violating the Anti-Kickback Act, the False Claim Statute, and the Controlled Substance Act is harshly punished by the law. Also, scheming to commit health care fraud like defrauding taxpayer-funded health care plans, such as Medicaid, TRICARE, or Medicare programs, is a severe crime. Any individual who executes these crimes violates the law and is sternly penalized or fined if found liable for the accusations. When charged with these crimes, you should search for the best legal advice or representation to protect and pursue your rights. Hire our highly qualified team of the finest defense and criminal attorneys if you required highly exceptional legal representation and assistance, which will result in achieving positive results for your issue. Health Care Fraud Group comprises an experienced team of lawyers with tremendous experience in handling Health Care Fraud related issues related to the Federal Health Care System; they are highly knowledgeable about civil and federal matters. The defense attorneys are well recognized across the nation due to their excellent and remarkable work and professionalism when dealing with health care fraud matters and investigations. Our attorneys are well equipped with past knowledge of each aspect of Health Care fraud defense, medical, and legal issues.

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