In a recently announced settlement, Vital Life Institute LLC, formerly known as AgeVital Pharmacy LLC, has agreed to pay $775,00 to resolve allegations that the health care provider violated the False Claims Act.

AgeVital is owned by Jenny and William Wilkins. The U.S. Department of Justice alleged that the owners directed the payment of kickbacks to a third-party marketing company to solicit prospective patients for compounded drug prescriptions. This was done regardless of AgeVital’s patient needs. The marketing company would then arrange for prescribers to sign those prescriptions, which were then referred to AgeVital to be filled in exchange for a substantial share of Medicare reimbursements. The federal Anti-Kickback statute prohibits these kinds of payments that induce the referral of services or items that are paid for by a federal health care program.

“Kickback schemes undermine public trust in our health care system and lead to unnecessary health care costs at taxpayers’ expense,” Assistant Attorney General Jody Hunt for the Justice Department’s Civil Division said in a statement.

The settlement resolves the lawsuit filed in federal court in Tampa, Florida by Manfred Knopf. He received unwanted compound medications from AgeVital that were billed to Medicare. AgeVital solicited Knopf to buy the expensive compounded pharmaceuticals after a slip-and-fall accident that required treatment for his injuries. While never ordering any medications, Knopf said AgeVital began sending containers of compounding creams. The health care prescriber listed on the packages was a New Jersey nurse practitioner Knopf had never been treated by.

Healthcare fraud can come in many different forms and remains one of the most active areas of false claims litigation. The False Claims Act has been an important tool in the fight against government programs fraud since it was first enacted to combat war profiteering during the Civil War. But the system depends on whistleblowers telling their story with the help of an experienced False Claims Act attorney. Manfred Knopf will be receiving at least $139,500 for his assistance as a whistleblower.

“This settlement demonstrates the value and impact of everyday citizens who come forward to expose fraud,” says Mr. Williams. “Medicare (and Medicaid) beneficiaries who carefully review their explanation of benefits statements like Mr. Knopf can make a difference.”