09/26/2012 12:21 EDT | Updated 11/26/2012 05:12 EST

Prairie pharmacy fleeced feds by writing doctored notes, report alleges

OTTAWA - A Prairie pharmacist and his former drug store face a multimillion-dollar lawsuit from the federal government over allegations they fleeced the aboriginal health-benefits plan.

A newly released report and documents filed in a Manitoba court allege Murvin Abas and Fisher Pharmacy submitted phoney claims to the Non-Insured Health Benefits program, overcharged for some products and had excessively high dispensing fees.

Ottawa is now suing Abas and the pharmacy for $3.1 million.

In a statement of claim filed in January, the government alleges Abas "fraudulently and negligently misrepresented information and claims" submitted to the NIHB program.

"Abas made the representations of false and inaccurate claims to the NIHBP fraudulently in that he knew the representations were false or he was reckless in not caring whether they were true or false and that Canada relied on the false or reckless misrepresentations in reimbursing Abas Pharmacy for the claims submitted under the NIHBP," the government alleges in its statement of claim.

None of the allegations have been proven in court, and a statement of defence has yet to be filed.

The claims are the latest to surface as part of a months-long investigation by The Canadian Press into alleged wrongdoing involving federal money for aboriginal health care.

Those allegations so far include:

— Staff at a remote nursing station in northern Ontario allegedly authorized expensive medical flights to go grocery shopping;

— Another Manitoba pharmacist who agreed to pay back thousands of dollars to the federal government for an alleged over-billing scheme;

— A New Brunswick First Nations health centre where half a million dollars that came from federal contribution agreements was allegedly misappropriated.

Abas declined to discuss his case during a brief telephone interview.

"This is all before the courts right now, and we're working through it," he said. "At this point, we can't just openly discuss details because it is being discussed in detail with the court and the lawyers."

In a January 2009 article in the Interlake Spectator, however, Abas defended himself and criticized Health Canada for revoking his NIHB program provider number, which allowed him to claim for his services.

"It's like (Health Canada) thinks the First Nations are their customers, not mine, so they pull numbers based on their analysis instead of working with people like myself," Abas told the newspaper.

"People are being left high and dry. It's sad from my perspective."

The federal NIHB program provides health-benefit coverage to eligible members of First Nations and Inuit communities when they are not insured by private or provincial plans.

The report says Health Canada became suspicious of the pharmacy's billings to the NIHB program, and in early 2009 the department asked its auditors to take a closer look.

The results of that investigation are contained in a 33-page report issued in January, which The Canadian Press obtained recently under the Access to Information Act. The report covers the period between January 2005 and March 2008.

In their report, the Health Canada auditors allege Fisher Pharmacy submitted claims for medication it never actually dispensed, overcharged for items and claimed excessively high dispensing fees.

The department further alleges the pharmacy submitted an unusually high number of claims for everyday products, such as Tylenol Extra Strength and Pepto Bismol, for a small-town drug store.

The pharmacy is located at a hospital in the tiny Interlake community of Hodgson, near the reserves of the Peguis First Nation.

The pharmacy's high volume of claims to the NIHB program raised some eyebrows.

"This high level of activity is inconsistent with the modest population served," the report says. "One possible explanation is that all products were not delivered as claimed."

Health Canada alleges doctors were asked to sign stacks of prescriptions, which were then altered by adding over-the-counter drugs, medical supplies and equipment. The audit says whoever changed the prescriptions had different handwriting and used a different colour of pen than the original physician did.

Costs to the NIHB program were further inflated through another company that marked up the cost of shipping medical supplies and equipment to the pharmacy, the department's report alleges.

"The sole business of (blank) seemed to transit medical supply and equipment from a few suppliers to the pharmacy," the auditors wrote.

The shipping company raised the price by as much as double the amount, the auditors allege.

"Even though the pharmacy paid the inflated price, the costs were transferred to and absorbed by the (NIHB) program," the report says.

"In addition, the pharmacy benefited from the customary mark-up of 66 per cent. This process was entirely invisible to NIHB clients."

In its audit, Health Canada also made reference to the pharmacy having "a history of non-compliance" with a provider agreement, which the department ended at the end of 2008.

A new company took over the ownership and operation of the pharmacy in early 2009.

The Manitoba Pharmaceutical Association said it has no records of any disciplinary actions taken against Abas.