Pharmacy Chain to Pay Millions to Settle Medicare and Medicaid Fraud Claims

Bradley/Grombacher, LLP • October 17, 2017

A Pennsylvania pharmacy chain accused of Medicare and Medicaid fraud will pay the federal government $2.67 million to settle civil False Claims Acts allegations, the U.S. Department of Justice in the Western District of Pennsylvania announced on Oct. 4, 2017.


The government pursued Med-Fast Pharmacy, Inc., its owner and some employees both civilly and criminally. According to the Department of Justice, Med-Fast submitted false claims to Medicare and Medicaid, allegations that included distributing recycled medications to nursing homes and submitting claims for retail-packaged versions of diabetes testing strips while actually supplying patients with cheaper, mail-order versions.


The global resolution of the case included charging Med-Fast’s former vice president of store operations, 47-year-old Gino Cordisco, of Mars, Pa., with a count of conspiracy for his role in a scheme to fill nursing home prescriptions “with recycled unused drugs that were commingled with drug stocks on hand at Med-Fast’s Institutional Pharmacy,” according to the Justice Department, which reported that Iserve Technologies, Inc., operated out of Med-Fast, participated in the same scheme, and was similarly charged with conspiracy.


The government brought the criminal charges against Cordisco and Iserve Technologies after Med-Fast Institutional Pharmacy’s former manager, Correna Pfeiffer, 37, pleaded guilty to conspiracy in 2015.


Law 360 reported that Cordisco and Pfieffer were “responsible for mixing the recycled drugs with Med-Fast’s other stocks and then using them to fill prescriptions at nursing homes between 2009 and 2013.”


The $2.67 million settlement, to be paid by Med-Fast owner Douglas Kaleugher and related entities, resolves claims brought by two whistleblowers, both former Med-Fast employees, who filed separate lawsuits in federal court in Pittsburgh.


One alleged that she was instructed to “falsify records, including expiration dates of drugs that were recycled, and that company officials ‘recklessly and deliberately disregarded’ her complaints,” according to U.S. News & World Report.


The other whistleblower, Med-Fast’s former marketing and sales director said “he had access to records showing the pharmacy was overcharging Medicare and Medicaid for the diabetes testing strips.”


“Unused prescription drugs are supposed to be destroyed, but Med-Fast drivers would pick up unused drugs from nursing homes after patients died or otherwise no longer needed the drugs, so they could be recycled to fill future prescriptions, prosecutors said,” according to U.S. News & World Report.


“As a result the older, unused drugs were commingled and relabeled with newer drugs, in violation of federal law.”


Med-Fast spokeswoman Elisabeth Mistretta said the company has corrected the problems and all of its patients received the correct medication.

Med-Fast’s website states that it operates 13 retail pharmacy locations in Western Pennsylvania, many of which are located inside Shop’n Save Grocery stores. The company also sells durable home healthcare medical equipment, such as hospital beds, wheelchairs, scooters and oxygen equipment.

Its Long Term Care division services to personal care homes, assisted living centers and hospice patients as well as compounding, or customized, pharmacy services.


If you have evidence of Medicare and Medicaid fraud, or another type of fraud against the government, the whistleblower attorneys at Bradley/Grombacher want to hear from you. They can help you determine if you have a case and advise you on the next steps to take. Fill out the form on this page for a FREE and confidential case evaluation.

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At Scanes Yelverton Talbert, LLP, we believe that if you are questioning whether you have a case against your current or former employer, your first step should be to seek legal guidance. The best way to get started is by visiting our website for more information and filling out our online form to connect with our attorneys. Many of these potential claims fall under the Americans with Disabilities Act (ADA), which encompasses three distinct types of claims: disability discrimination, failure to accommodate a disability, and retaliation—where an employer takes adverse action against an employee for complaining about discrimination or requesting accommodations. Many of our cases involve ADA claims, which often intersect with claims under the Family and Medical Leave Act (FMLA). While both address medical-related workplace issues, they serve different purposes. The FMLA applies when an employee needs to take time off work due to a medical condition. In contrast, ADA claims generally arise when an employee can continue working but requires a reasonable accommodation. Another common claim we handle is workers' compensation retaliation. This occurs when an employee is injured on the job, files a workers' compensation claim, and then faces retaliation from their employer—an illegal action. These are just a few examples of the cases we deal with daily. We also frequently handle cases under Title VII of the Civil Rights Act, which protects employees from discrimination based on race, religion, sex, national origin, and color. If an employee experiences discrimination on any of these grounds, they may have a valid claim. Additionally, a retaliation claim may also be pursued if an employer retaliates against an employee for taking protected action—such as reporting discrimination to their employer or the Equal Employment Opportunity Commission (EEOC). At Scanes Yelverton Talbert, LLP, we are dedicated to defending those facing unjust treatment at work. Understanding your rights is the first step toward justice, whether you're facing discrimination, retaliation, or an employer unwilling to provide reasonable accommodations. We encourage you to visit our website for more information and to fill out our online form to connect with our attorneys. Our team is here to help you explore your legal options and determine the best path forward.

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At Scanes Yelverton Talbert, LLP, we believe that if you are questioning whether you have a case against an insurance company or wondering what constitutes a fair settlement, your first step should be to seek legal guidance. The best way to get started is by visiting our website for more information and filling out our online form to connect with our attorneys. As plaintiff attorneys, we evaluate three key factors to determine whether a case is legally viable. First, do you have liability facts? In other words, did someone legally do something wrong to you? Not every unfortunate event is grounds for a lawsuit. Imagine a Venn diagram: one circle represents all bad events, and the other represents legally actionable claims. The overlap is much smaller, but we move to the next step if your situation falls within that space. Second, do you have sufficient damages? Is it worth your time to file a lawsuit and go through the legal process? At Scanes Yelverton Talbert, we generally advise that if your injury requires hospital treatment, a visit to your primary care physician, or chiropractic care, you likely have enough damages to justify pursuing a claim. Lastly, if you win, can you recover compensation? In personal injury cases, this typically means insurance companies, whether auto insurance, homeowner’s insurance, or business liability coverage. In employment cases, it could be employment insurance or a corporation paying for wrongful termination. The key question is whether there is a viable source of compensation if legal action is necessary. Our goal at Scanes Yelverton Talbert, LLP, is to help you evaluate your claim and understand your legal options. If you are uncertain about your situation, we encourage you to visit our website, fill out our online form, and let our team provide the guidance and assistance needed to determine your best course of action.

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At Scanes Yelverton Talbert, LLP, we are dedicated to helping people. We are committed to supporting our clients at every stage because we recognize how difficult it may be to navigate legal issues. We are here to ensure every client has a strong advocate because we believe everyone deserves to be heard. Attorneys Bo Routh and Mike Scanes established our practice in 2005. They used to work for a more prominent local general practice law firm. Their goal was to establish a practice that provided excellent legal counsel to those in need and was committed to client advocacy. Today, Mike Scanes remains a senior partner and founding member, while Bo Routh departed at the end of 2021. Following his departure, Tyler Talbert and Ben Yelverton became named partners, officially becoming Scanes Yelverton Talbert, LLP. Tyler Talbert specializes in appellate advocacy, representing clients in Texas and federal appellate courts. He has experience in civil appeals, litigation, and trial support, including motions, error preservation, and jury charges. Ben Yelverton is also an expert in business litigation and personal injuries. He handles matters ranging from class actions to wrongful deaths throughout his early courtroom experience in Austin and Dallas. He is a strategic litigator committed to helping clients get the best results. Another vital member of our law firm is Joel Shields, who has contributed significantly to the expansion and prosperity of the company since joining in 2007. He is Board-Certified in Labor and Employment Law by the Texas Board of Legal Specialization. Joel is an aggressive advocate for his clients and offers wise counsel, whether pursuing claims for someone wrongly fired or advising a company on how to comply with legal requirements. At Scanes Yelverton Talbert, LLP, our passion lies in advocating for individuals. We often represent people in legal battles against large insurance companies or corporations rather than defending corporate entities. Many of our clients come to us in times of need –whether they have been injured in a car accident and are struggling to get their insurance companies to pay or are homeowners whose fire damage claims have been unfairly denied. We also handle employment law cases, ensuring that employees who have been wrongfully terminated or treated unjustly in the workplace receive the representation they deserve. At Scanes Yelverton Talbert, LLP, we advocate for those in need. Whether taking on powerful corporations, advocating for justice, or protecting individuals from unfair treatment, we are here to make a meaningful difference in our clients' lives.

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