Passavant to pay $1.85 million for Medicare, Medicaid misunderstanding

November 12, 2018

Passavant Memorial Homes and four subsidiaries will pay the federal government $1.85 million to settle false claims and drug law issues, U.S. Attorney Scott W. Brady announced in Pittsburgh Wednesday.

The settlement resolves questions surrounding Passavant’s dispensing of drugs without written prescriptions from doctors and then billing Medicare and Medicaid for the drugs. The government said the drugs were dispensed legitimately but only using a verbal order from doctors instead of having written prescriptions in each case.

Brady acknowledged that Passavant voluntarily disclosed this information to the government about three years ago. He said the company has “cooperated with the investigation to identify the nature and scope of legal violations,” and made internal policy changes.

The 120-year-old company employs about 1,700 in western and central Pennsylvania, Delaware and a pharmacy in Boulder, Co., said Tom King, an attorney who works with Passavant.

The paperwork vs. physician’s voice order rules were changed in 2009 by the DEA, King explained.

“There was never a question of criminal charges. This was a civil investigation,” King said.

Passavant accepted Medicare and Medicaid money for patients and there was written record of the drugs prescribed and given to patients, but there wasn’t the federally required written prescription, King said. “So Passavant is paying that back,” he said.

About $1.7 million of the total is to reimburse Medicare or Medicaid, according to the 13-page agreement signed in September by Rick D. Seneft, CEO and president of Passavant.

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