Whistleblower settles false-claims case against pharmacy

A federal judge has approved a $9.5 million settlement in a whistleblower’s suit against a Kansas City-area compounding pharmacy.

Emily Barnes brought the False Claims Act case against her former employer, the Howard Stark Professional Pharmacy Inc. and its three owners, Steven D. Baraban, Gary D. Gray and Steven J. Schafer, in November 2015.

According to court records, the U.S. Attorney’s Office for the Western District of Missouri intervened last April in a portion of the case “which alleges that between 2013 and 2015, the defendants violated the False Claims Act by submitting, or causing to be submitted, false claims for payment of compounded pain cream prescriptions for Medicaid beneficiaries.”

Kathleen Fisher and Nathan Garrett of Graves Garrett in Kansas City represented Barnes. They said the suit settled Dec. 14. As part of the settlement, they said Barnes would receive $1.8 million, which would include attorneys’ fees.

Stark Pharmacy has two Kansas City-area locations — one at Menorah Hospital in Overland Park, Kansas, and another at Research Hospital in Kansas City’s Brookside neighborhood.

Barnes, who lives in Lenexa, Kansas, worked at the Brookside location from April 2015 until she resigned in September 2015, according to her suit.

The U.S. Attorney’s Office found four of Barnes’ allegations merited additional investigation. They included the following claims:

• The pharmacy submitted claims for payment of compounded pain creams with formulas different from the formulas in the pain creams provided to Medicaid beneficiaries.
• The pharmacy manipulated compound formulas for pain creams without physician authorizations.
• The pharmacy submitted claims for payment of prescriptions that were returned to the manufacturer or for prescriptions that were not actually provided to Medicaid beneficiaries
• The pharmacy created documentation that falsely represented that pain creams were compounded in Missouri and that falsely represented the base creams used in the compounds.

Barnes’ case is the third whistleblower case Garrett and Fisher have successfully resolved for relators in the last three years. The other cases were in the Western District of Missouri and in Nashville, Tennessee.

Garrett said they more commonly represent defendants, and the firm is particularly judicious about the relators with whom they choose to work.

“Our law firm continues to value its relationship with the U.S. Attorney’s Office, which is essential in navigating these cases, regardless of what side we’re on,” he said. “That positions us well on these cases.”

Kendra Pannitti of Frier Levitt in Pine Brook, New Jersey represented the defendants. She did not respond to a message seeking comment.