Kindred, PharMerica to pay $1.3 million settlement
By Gregg Blesch
Posted: June 12, 2009

Kindred Healthcare and PharMerica, a company formed in part from Kindred’s spun-off institutional pharmacy division, have entered a $1.3 million settlement to resolve allegations that Kindred’s Knoxville, Tenn., nursing home billed Medicaid for more pharmaceuticals than were actually used or delivered to the facility from 2003 to 2006.

The settlement does not constitute an admission of liability by either company, both based in Louisville, Ky. The allegations originated in a whistle-blower lawsuit filed in 2005 by former billing clerk Jeanne Mayes and subsequently investigated by the U.S. attorney’s office in Knoxville and the Tennessee attorney general’s office. “Kindred Healthcare is pleased with the settlement announced today which puts an old pharmacy dispute to rest,” the company said in a written statement. “The parties settled to avoid the distraction, time and expense of further litigation.”

Mayes, the whistle-blower, is set to receive about $220,000 from the settlement payments PharMerica will make to the U.S. and Tennessee governments.