Feds probe two pharmacies over
allegations of phoney claims
Sunday, Sep. 30, 2012 7:33AM EDT
The federal government has set its sights on a pair of pharmacies in Nova
Scotia and Saskatchewan over allegations they submitted phoney claims to
the aboriginal health-benefits plan, The Canadian Press has learned.
report and documents filed in a Nova Scotia court contain information on
two more cases in which the Non-Insured Health Benefits program has
purportedly fallen prey to wrongdoing.
Canada has also called in the Mounties in one case.
program provides coverage to eligible First Nations people and Inuit when
they are not insured by private or provincial plans.
months-long investigation by The Canadian Press has uncovered a string of
alleged abuses of federal money for aboriginal health care by pharmacies,
a health clinic and a remote nursing station, all of which have
purportedly cost taxpayers millions of dollars.
Now two more
pharmacies find themselves under the microscope.
Scotia pharmacist and his numbered company face a $1.36-million lawsuit
from the federal government over allegedly "fraudulent" claims.
And a newly released report says Ottawa had been trying to recover
$729,071 from another pharmacy in a Saskatchewan hospital that allegedly
overcharged the NIHB program and billed for drugs that were not dispensed.
The government is now after about half that amount.
Canada launched an investigation into the pharmacy at St. Joseph's
Hospital in the northern Saskatchewan village of Ile-a-la-Crosse after the
province's College of Pharmacists raised concerns five years ago.
registrar of the Saskatchewan College of Pharmacists, refused to release a
copy of the 2007 letter to Health Canada or answer any questions about the
organization's concerns about the St. Joseph's Hospital community
In its May
2011 report, however, Health Canada's audit team laid out a number of
troubling claims of wrongdoing over a 22-month period.
pharmacist filled, dispensed and billed for prescriptions without
authorization, billed the (NIHB) program for drugs that were not
dispensed, and overcharged the program by claiming for drugs above cost
and submitting more than one bill for the same drug," the report
Press obtained the 32-page document, which examined the period between
March 2005 and January 2007, under the Access to Information Act.
Canada further alleges the pharmacy's former owners, the Keewatin Yatthe
Regional Health Authority, blocked the auditors' attempts to review
clerk attempted to locate the accounting files of the pharmacy in her
computer, and realized that all of them had vanished," the report
searched for her backup files copied on a separate diskette, but they were
The loss of
the computer files apparently baffled the clerk.
to the employee, these files were available shortly before the start of
the examination, and their disappearance coincided with the recent visit
of a (Keewatin Yatthe Regional Health Authority) 'technician' who had come
unexpectedly to inspect her computer," the report says.
auditors asked to examine the previous year's accounting records of the
pharmacy located in the basement of the hospital. The records were
generally available... with one notable exception: those related to the
period under review were all missing."
also suspect the pharmacy sold expired medicine.
auditors noticed a significant volume of additional outdated products that
originated from the St. Joseph pharmacy, lying on a shelf, waiting for
destruction," the report says.
the fact that the pharmacy was reusing drugs returned by the nursing
stations, it is unknown how many times these products were charged to the
NIHB. There is also a risk that some of the drugs delivered to patients
Yatthe Regional Health Authority, which sold the pharmacy in early 2007,
said "numerous personnel changes" since the period of the audit
have resulted in a "loss of corporate history and knowledge of past
events and practices."
Dale West said pharmacy operations have since changed, and the health
region no longer operates on a "fee-for-service basis."
be advised that the region is in receipt of a statement of claim for
$355,520 and is working co-operatively with Health Canada to better
understand the nature of this claim in order to reach a mutually agreeable
solution," West said in an email.
evidence supporting this claim is made available to and examined by the
region, we will be in a better position to act and comment on this
Canada spokeswoman Christelle Legault said the department has removed the
pharmacist who worked with St. Joseph's Hospital community pharmacy from
its NIHB provider list.
government filed a statement of claim against the Keewatin Yatthe Regional
Health Authority and the pharmacist in October 2011, she added.
discussions and a review of the evidence saw the amount of the claim
reduced to $355,520. However no money has been collected," Legault
said in an email.
Department of Justice has begun legal action to recover the amount due.
Because this matter is currently before the courts, it would be
inappropriate to comment further."
at least two other unrelated proceedings are underway.
Canada refused to release an audit of the Eskasoni pharmacy in Nova
Scotia, and a report into allegations of wrongdoing involving medical
transportation benefits in the northwestern Ontario community of Thunder
Bay, under provisions of the Access to Information Act "relating to
additional information is provided about the Thunder Bay case, Health
Canada says it referred the Eskasoni pharmacy case to the RCMP in May
filed in the Supreme Court of Nova Scotia shows the federal government
sued pharmacist Akhane Thiphavong and his numbered company over allegedly
"fraudulent" claims linked to the Eskasoni pharmacy.
government's statement of claim alleges those claims totalled more than
Scotia court document lists several "questionable pharmacy
practices," such as claiming for prescriptions with vague or missing
client instructions and prescriptions without the signature or initials of
a doctor and pharmacist.
document further alleges Thiphavong blocked access to the pharmacy's
purchase records when Health Canada investigators showed up to conduct an
defendants refused to provide the examiners ... with full access to the
accounting records of the Eskasoni Pharmacy," says the government's
statement of claim.
while the defendants initially provided the examiners with access to the
drug purchase database of large-scale suppliers, it was revoked in the
course of the audit.
result, a significant portion of the Eskasoni Pharmacy's purchase data was
unavailable for examination."
also claim Eskasoni Pharmacy was buying and shipping drugs to another
pharmacy in Manitoba.
is considered wholesaling and requires an Establishment Licence, which the
Eskasoni Pharmacy did not have," the statement of claim says.
declined an interview request.
statement of defence has been filed. I cannot make any comment as the case
is before the court," Thiphavong said in an email.
the case is resolved, I would be more than happy to tell you the
chronological order of event with Health Canada/NIHB and the politics that
were involved in the reserve for the 10 years that I have serviced the
statement of defence disputes the government's version of events.
defendants acknowledge there was a point in the investigation that access
was denied to a purchase database of large-scale suppliers as a result of
the auditor's conduct of the audit and refusal to communicate with the
defendants," the court document says.
statement of defence, Thiphavong says he fully co-operated with the
says that Eskasoni Pharmacy bought drugs for a Winnipeg pharmacy that
Thiphavong co-owned, and "in good faith understood that he was able
to transfer supplies between Eskasoni Pharmacy and the pharmacy in
Manitoba as a result of common ownership."
did not submit claims to the NIHB program for any drugs bought for the
Winnipeg pharmacy, the statement of defence says.
also deny the pharmacy submitted claims without the signatures or initials
of doctors or pharmacists, although they say that "from time-to-time
there may have been some omissions."
Pharmacy hired an accounting firm to go over its books after the Health
Canada audit. The accountants concluded that the department did not have
enough documentation to support some of its claims, according to the
statement of defence.
accountants also apparently found paperwork that was not included in the
Health Canada figures to support more than $72,000 worth of purchases, the
sent the accountants' findings to Health Canada, but the court document
says the department never responded.
Canada did not comment on the disputed accountant's report.
said auditors found "a number of anomalies with the pharmacy's
operations and were not able to substantiate a large number of claims
going back as far as 2003."
Canada took steps to recover the money and has begun legal action against
the pharmacy and the pharmacist," she said in an email.
this matter is currently before the courts, it would be inappropriate to
statements of claim filed by the federal government contain allegations
that have not been proven in court.