A national long-term care pharmacy provider agreed to a $2.75 million settlement with the federal government over allegations of improperly dispensing controlled substances at long-term care facilities and engaging in a coverup.

AlixaRx LLC, a Plano, TX-based pharmacy provider that serves assisted living communities and skilled nursing facilities, was accused of violating the Controlled Substances Act by allowing opioids and other controlled substances to be dispensed without valid prescriptions. The alleged offenses took place between Jan. 1, 2014, and Dec. 13, 2017.

The settlement, announced last week by the Justice Department, resolves a lawsuit filed by a former pharmacist at AlixaRx’s Atlanta hub under the whistleblower provisions of the False Claims Act. 

AlixaRx dispenses prescription drugs primarily through onsite automatic dispensing units. The pharmacy company supplied these units with drugs through seven regional hubs located throughout the country. 

The suit centered on how AlixaRx dispensed Schedule II controlled substances through its onsite automatic dispensing units. Schedule II controlled substances require a written prescription, and refills are not permitted by law except in “true emergency situations,” and only for the quantity necessary to treat a person during an emergency period. Emergency prescriptions must be signed by an authorizing physician within seven days of issuance.

A federal investigation found that AlixaRx “routinely abused the emergency prescription provisions” of the Controlled Substances Act by obtaining verbal emergency refills from prescribers in the absence of a true emergency, according to the Department of Justice. AlixaRx also failed to obtain written prescriptions within the seven-day period, the department said. 

The DOJ alleged that AlixaRx “engaged in a nationwide scheme to cover up its violations by obtaining backdated prescriptions from the prescribing physicians,” in many cases over a year after the original prescription. In addition, the pharmacy company was accused of submitting false claims to Medicare for the invalid emergency prescriptions, and of billing Medicare Part D for claims already reimbursed to long-term care facilities under Medicare Part A.

“AlixaRx LLC spun a web of deception when it engaged in unlawful dispensing practices by abusing the emergency prescription provisions of the Controlled Substances Act,” Robert J. Murphy, special agent in charge of the DEA Atlanta Field Division, said in a statement. “Such behavior allows for substances to be diverted and sold on the black market with no true measure of accountability. This civil penalty is a proactive step that DEA Diversion and its law enforcement partners can take to discourage other healthcare providers from engaging in such behavior.”

The case was investigated by the U.S. Attorney’s Office for the Northern District of Georgia, the Drug Enforcement Administration’s Diversion Control Division, Atlanta Field Office, the Department of Health and Human Services — Office of the Inspector General, the Federal Bureau of Investigation and the Defense Criminal Investigative Service.