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Medical Fraud Case Settled


By William Cole Advertiser Courts Writer

HONOLULU – Attorney General Earl Anzai is expected to announce today a $4 million settlement in the state’s largest medical fraud case.

The settlement involves Interstate Pharmacy Corp., now known as IPC, a local corporation owned by Fortune 100 pharmaceutical giant Bergen Brunswig Inc., authorities said.

Two former employees who reported illegal activity at one of the local pharmacies will share in the recovery under whistle blower legislation enacted in Hawaii in July, officials said.

IPC supplied pharmaceuticals to most of the state’s nursing homes, according to company officials.

IPC is a subsidiary PharMerica, Inc. PharMerica’s parent company is Bergen Brunswig, the third largest supplier of pharmaceuticals in the country. Bergen previously revealed the investigation in documents filed with the Securities and Exchange Commission.

“The company has been informed by the State of Hawaii Medicaid Fraud Division that is’t has initiated an investigation into possible violations of Medicaid regulations by a pharmacy operated by PharMerica in Honolulu, Hawaii,” Bergen noted in a quarterly regulatory document filed last year.

An identical statement appeared in a PharMerica end-of-year report. Both went on to say they were conducting an internal investigation “in conjunction with the state.”

Kerry Yingling, regional office business manager for IPC, previously confirmed that the state’s Medicaid fraud investigation was directed at IIPC, but would provide no information on its focus or the company’s internal investigation.

There are 46 nursing homes across the state, according to the health department. Bob Ogawa, president of the Hawaii Long Term Care Association, said IPC services most of them.