A government 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.
Health Canada has also called in the Mounties in one case.
The NIHB program provides coverage to eligible First Nations people and Inuit when they are not insured by private or provincial plans.
A 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.
A Nova 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.
Health 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.
Ray Joubert, 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 pharmacy.
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.
"The 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 says.
The Canadian Press obtained the 32-page document, which examined the period between March 2005 and January 2007, under the Access to Information Act.
Health Canada further alleges the pharmacy's former owners, the Keewatin Yatthe Regional Health Authority, blocked the auditors' attempts to review financial records.
"(Blank) clerk attempted to locate the accounting files of the pharmacy in her computer, and realized that all of them had vanished," the report says.
"She searched for her backup files copied on a separate diskette, but they were also deleted."
The loss of the computer files apparently baffled the clerk.
"According 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.
"The 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."
The auditors also suspect the pharmacy sold expired medicine.
"The 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.
"Given 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 were expired."
The Keewatin 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."
Spokesman Dale West said pharmacy operations have since changed, and the health region no longer operates on a "fee-for-service basis."
"Please 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.
"Once 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 matter."
Health 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.
The federal government filed a statement of claim against the Keewatin Yatthe Regional Health Authority and the pharmacist in October 2011, she added.
"Subsequent 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.
"The 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."
Meanwhile, at least two other unrelated proceedings are underway.
Health 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 crime."
While no additional information is provided about the Thunder Bay case, Health Canada says it referred the Eskasoni pharmacy case to the RCMP in May 2011.
A document 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.
The government's statement of claim alleges those claims totalled more than $1.36 million.
The Nova 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.
The court document further alleges Thiphavong blocked access to the pharmacy's purchase records when Health Canada investigators showed up to conduct an audit.
"The defendants refused to provide the examiners ... with full access to the accounting records of the Eskasoni Pharmacy," says the government's statement of claim.
"Further, 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.
"As a result, a significant portion of the Eskasoni Pharmacy's purchase data was unavailable for examination."
The auditors also claim Eskasoni Pharmacy was buying and shipping drugs to another pharmacy in Manitoba.
"This is considered wholesaling and requires an Establishment Licence, which the Eskasoni Pharmacy did not have," the statement of claim says.
Thiphavong declined an interview request.
"The statement of defence has been filed. I cannot make any comment as the case is before the court," Thiphavong said in an email.
"Once 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 community."
Thiphavong's statement of defence disputes the government's version of events.
"The 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.
In his statement of defence, Thiphavong says he fully co-operated with the investigation.
The document 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."
Thiphavong did not submit claims to the NIHB program for any drugs bought for the Winnipeg pharmacy, the statement of defence says.
His lawyers 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."
Eskasoni 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.
The accountants also apparently found paperwork that was not included in the Health Canada figures to support more than $72,000 worth of purchases, the document says.
The pharmacy sent the accountants' findings to Health Canada, but the court document says the department never responded.
Health Canada did not comment on the disputed accountant's report.
But Legault 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."
"Health Canada took steps to recover the money and has begun legal action against the pharmacy and the pharmacist," she said in an email.
"Because this matter is currently before the courts, it would be inappropriate to comment further."
Both statements of claim filed by the federal government contain allegations that have not been proven in court.