A pharmacy owner from New York has recently agreed to pay $1.5 million to resolve allegations of Medicaid fraud, in the forms of accepting financial kickbacks in exchange for cancer drugs and billing for medication that was never provided.

The alleged Medicaid fraud reportedly pertained to the state-run program, with the qui tam lawsuit alleging the pharmacy owner had paid medical professionals financial kickbacks in exchange for cancer prescription drugs and had billed for medications that were not dispensed.

One of the defendants named in this qui tam lawsuit is Arkady Goldin, who is a co-owner of Value Pharmacy. Goldin is facing jail time for allegedly paying former Nassau University Medical Center (NUMC) employees kickbacks.

Goldin allegedly paid these medical employees large amounts of money for sending cancer medication prescriptions to the Value Pharmacy, then allegedly committing Medicaid fraud by falsely billing the program for medications that were supposed to be dispensed to patients.

“Arkady Goldin billed Medicaid millions for cancer medications he never dispensed. [T]hanks to our partnership with the attorney general’s office, Goldin has been convicted, his corrupt pharmacy closed, and he and his partners will pay the state back for the $3 million total in stolen Medicaid funds,” said State Comptroller Thomas P. DiNapoli in a press release.

Overview of Medicaid Fraud Allegations

According to the qui tam lawsuit, New York state officials allege Goldin had paid a former NUMC employee a financial kickback, as well other gifts like sporting events, free meals, and an iPad.

This NUMC employee had also pleaded guilty for participating in this Medicaid fraud. In addition, Value Pharmacy is one of the defendants named in the qui tam lawsuit and had reportedly pleaded guilty to first degree grand larceny and will pay a $10,000 fine.

Medicaid fraud is one of the most significant forms of healthcare fraud, in which federal and state programs are billed for services and products that were never provided to patients. Fraudulent billings and improper financial kickback arrangements are just two forms of Medicare or Medicaid fraud including:

• Fraudulent upcoding in medical billing
• Overcharging for medical goods or services
• Financial kickback or referral arrangements between providers
• Providing services not medically necessary
• Billing for services provided that were supposed to be provided by a physician, when it was provided by a less qualified employee

According to the qui tam lawsuit, Value Pharmacy did not stock itself with sufficient amounts of medication from licensed New York wholesalers. The pharmacy had then billed Medicaid for these medications, but were never dispensed to patients. According to the qui tam lawsuit, Value Pharmacy reportedly gained over $1.5 million in Medicaid fraud claims.

Furthermore, the qui tam lawsuit states Goldin will also be on five years probation, pay $3 million, and complete 200 hours of community service. Goldin reportedly pled guilty in New York state court to second degree Medicaid fraud, and is expected to start his sentence soon.

The state of New York had reportedly sought over $8.7 million in damages and penalties against the owners of Value Pharmacy.