K-VA-T Food Stores Inc., operating as Food City, has reached a settlement regarding allegations under the False Claims Act related to the dispensing of opioids and other controlled substances. The regional grocery store chain, headquartered in Abingdon, Virginia, will pay $8,488,378 to the United States as part of the agreement. Additionally, Food City will pay $78,621 to Virginia and Kentucky for claims paid by state Medicaid programs.
The U.S. Department of Justice has emphasized the responsibility of pharmacies to ensure that prescriptions for opioids and controlled substances are medically necessary. Principal Deputy Assistant Attorney General Brian M. Boynton stated that the department is dedicated to holding accountable pharmacies that neglect this responsibility and exacerbate the opioid crisis.
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U.S. Attorney Francis M. Hamilton III for the Eastern District of Tennessee highlighted the significant contribution of improper dispensing to the opioid epidemic, which harms citizens and communities. He noted that the settlement demonstrates the commitment of federal, state, and local law enforcement to using all available tools to address the crisis.
The investigation revealed that from January 1, 2011, to December 31, 2018, 24 Food City pharmacies dispensed opioids and controlled substances without legitimate medical purpose or valid prescriptions. The United States alleged that these actions led to false claims submitted to federal healthcare programs.
The settlement also resolves claims brought under the qui tam provisions of the False Claims Act by K-VA-T Litigation Partnership, LLP, which will receive $1,527,908 from the settlement. The resolution was a result of collaboration between the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Eastern District of Tennessee, and several investigative agencies.
While the claims resolved by this settlement are allegations, the lack of a determination of liability underscores the importance of combating healthcare fraud through tools like the False Claims Act. Concerns about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).
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