Hayat Pharmacy paying $2 million to settle false Medicare and Medicaid claims case

Behind the counter at Hayat Pharmacy, 1919 W. North Ave. Credit: Arthur Thomas

Last updated on February 2nd, 2022 at 02:07 pm

Milwaukee-based Hayat Pharmacy has agreed to pay $2,050,000 to settle claims it submitted false claims to Medicare and Medicaid for a topical cream and a multivitamin.

The case stems from a complaint brought by a former pharmacist with the company who alleged there were more than 200 false claims submitted by just one of the pharmacy’s stores in 2019 alone. The complaint alleged that a pharmacist working from Hayat’s main building would falsify electronic and verbal prescriptions for the cream and vitamin and that the company inflated its billing to the government for those drugs by charging dispensing fees it was not entitled to charge.

The complaint says the former pharmacist was terminated when executives discovered he was looking for a new job.

For its part, Hayat did not admit any liability in the settlement.

“Hayat vigorously disputed the allegations made against our company,” the company said in a statement. “As a family-owned business, our mission is and always will be helping underserved populations in our community obtain proper health care. We agreed to settle this dispute in order to put this matter behind us so it does not distract from that mission. We are eager to move forward and to continue serving our neighbors in the Milwaukee community.”

Hayat, which has 23 locations in the Milwaukee area, also noted 19 of its locations are in underserved neighborhoods and its median patient income is less than $18,000. The company noted it serves more than 70,000 Medicare and Medicaid patients annually, dispensing more than 700,000 prescriptions to that group alone.

The money from the settlement will be divided between the state and federal governments. Wisconsin will receive a little more than 34% of the payments or roughly $700,000, including $342,000 in restitution. The federal government will receive nearly $1.35 million, with roughly $242,000 going to the former pharmacist who brought the initial complaint.

The settlement calls for Hayat to make roughly $1 million in payments this year with the remainder of the payments stretched over four installments through Dec. 1, 2024.

“Medicare and Medicaid only pay for prescription medications that are needed by patients, not prescriptions dispensed by pharmacies simply to increase their profits,” said U.S. Attorney for Eastern Wisconsin Richard Frohling. “This settlement imposes a significant penalty on Hayat Pharmacy and will make the federal government whole for the pharmacy chain’s wrongdoing.”

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Arthur covers banking and finance and the economy at BizTimes while also leading special projects as an associate editor. He also spent five years covering manufacturing at BizTimes. He previously was managing editor at The Waukesha Freeman. He is a graduate of Carroll University and did graduate coursework at Marquette. A native of southeastern Wisconsin, he is also a nationally certified gymnastics judge and enjoys golf on the weekends.

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