Arnold Law Firm Represents Whistleblowers in Contraceptive Product Fraud Lawsuit

woman placing a prescription drug order on her cellphoneArnold Law Firm attorney M. Anderson Berry represented two whistleblowers in a lawsuit alleging fraud by an online pharmacy company called The Pill Club. If you have knowledge that your company is defrauding patients or insurers, contact us now at 916-777-7777.

The lawsuit was settled by all parties involved in the case, including the California Department of Justice (DOJ) and the California Department of Insurance (CDI), in January 2023. The state was able to recover $18.275 million that The Pill Club obtained by defrauding the government and private insurance companies using false claims.

Other companies may be defrauding patients and insurers using a similar fraud scheme. If you are trying to expose corruption within a company or organization with which you are involved, our whistleblower attorneys are prepared to listen. We offer a free and confidential consultation to discuss your legal options.

Who Are the Involved Parties?

In addition to the whistleblowers represented by the Arnold Law Firm and the Hirst Law Group, the involved parties include the California DOJ, the CDI and the defendants in the case, the Pill Club.

The Pill Club is an online pharmacy that provides women a variety of birth control options, including NuvaRing, the patch, birth control pills and female condoms.

Patients wishing to purchase contraceptives that normally require a prescription, like the pill, would contact the Pill Club through their virtual telehealth consultations and have a nurse practitioner prescribe the product.

Attorney Anderson Berry commended the actions of Cindy Swintelski and Happy Baumann, the two whistleblowers in the case, saying, “Ms. Baumann and Ms. Schwartz stood up for what is right. I hope more medical professionals in this field stand up and let us know who else is committing these frauds against women and their government or private insurers.”

What Are the Allegations in This Case?

In its three-year investigation, the state of California found that The Pill Club had submitted claims for 30-minute face-to-face counseling sessions even though the nurse practitioners conducting these sessions had no direct or real-time contact with patients.

Investigators also found that the Pill Club was dispensing enormous quantities of products to patients who had not asked for them. The products, which were often left unused by the women who received them, were then billed to Medi-Cal, on average, 250 percent higher than retail pricing.

According to the complaint (Link to Complaint) filed by Mr. Berry in March 2019, The Pill Club violated multiple California laws with its practices.

The first alleged violation of state law was that nurse practitioners did not have a licensed doctor supervising the prescription of said contraceptive products. California law does not require the licensed doctor to be present during the prescription process, but it does require that the nurse practitioner collaborate and receive proper training. According to the whistleblower complaint, this was not done by the Pill Club.

Other allegations in the complaint include defrauding California’s Medicaid program, Medi-Cal, and other private health insurers by excessive billing of contraceptive products, improperly coded telemedicine visits and inaccurately stating the amount of time providers spent with patients.

California Attorney General Ricardo Lara says he is grateful to the whistleblowers who came forward with the initial allegations, as these allegations caused the state could conduct a full investigation into the online pharmacy.

How Much is the Settlement Agreement?

The Pill Club agreed to pay a total of $18.275 million to the California DOJ and CDI for its alleged fraudulent practices.

Links to Settlement

In accordance with California Qui Tam laws, the two whistleblowers and their attorneys shall receive approximately $4.9 million from the funds collected by the DOJ and CDI.

The settlement was agreed to by all the parties involved on January 18, 2023.

Is There Fraud or Corruption in Your Industry? Call Us Today

If you know the company you work for is defrauding the government, our knowledgeable attorneys may be able to help you. Whistleblowers have certain rights under the law, and our attorneys are prepared to help you. For example, it is illegal for whistleblowers to face retaliation for exposing fraud.

We offer a free consultation to discuss your claim.

Call 916-777-7777 today.