Tampa pharmacy pays $17M for false Medicare claims

A Tampa pharmacy has agreed to pay more than $17 million to the federal Medicare program to settle allegations that the company fraudulently billed the government for over-the-counter COVID-19 tests that were never given out to customers. 

The settlement was disclosed Friday by the U.S. Attorney’s office for the Middle District of Florida. VRA Enterprises LLC, doing business as a Tampa pharmacy called Precision RX, has agreed to pay the federal government $17.0 million to resolve allegations it violated the False Claims Act by knowingly submitting the Medicare claims for COVID-19 tests that never got sent to customers months after they were billed, according to the announcement. 

“The Department of Justice has been vocal in prioritizing the pursuit of civil fraud cases against providers that raided federal health programs during the COVID-19 pandemic,” U.S. Attorney for the Middle District of Florida Gregory Kehoe says in the announcement. “This settlement is an excellent example of our district’s commitment to meeting this important challenge.”

Prosecutors say VRA worked with the Centers for Medicare and Medicaid Services OTC COVID-19 Test Demonstration Project to distribute tests to customers between April 2022 and May 2023. During the project, Medicare Part B beneficiaries were able to request over-the-counter COVID-19 tests from participating providers, like VRA, and those providers would be reimbursed for up to 8 tests per beneficiary per month, at a fixed rate of $12 per test. 

The Justice Department’s investigation found that, between August 2022 and May 2023, VRA knowingly submitted false claims to Medicare for COVID-19 tests that were never provided to beneficiaries. In January 2023, VRA submitted approximately 136,491 claims to Medicare for $12 COVID-19 tests, none of which were distributed to beneficiaries until April of that year, the announcement states.

During that time, VRA received thousands of complaints from beneficiaries who never received their promised COVID-19 tests, according to the Justice Department. Internal communications from VRA also show that the company repeatedly acknowledged it had “billed Medicare” for tests it “failed to ship” and should “issue a refund … immediately.” However, investigators say the company failed to do so. 

“When providers bill for services that were never delivered for matters such as COVID-19, they not only squander taxpayer dollars, but they also drain critical resources in our public health response,” Christian J. Schrank, deputy inspector general for investigations of the U.S. Department of Health and Human Services Office of the Inspector General (HHS-OIG), says in the announcement. 

The claims resolved by the settlement are still only allegations, and there has been no determination of liability, the announcement states. 

The resolution was the result of a coordinated effort between the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section, the U.S. Attorney’s Office for the Middle District of Florida and the HHS-OIG, along with Civil Divisions Fraud Section Trial Attorney Lindsay DeFrancesco and AUSA Carolyn Tapie.