TOWSON, MD – September 18, 2026 (STL.News) Remedi SeniorCare Holding Corporation has agreed to pay more than $5.3 million to resolve federal allegations that the long-term-care pharmacy billed Medicare and Medicaid for prescription drugs dispensed to assisted-living residents without valid prescriptions, marking the company’s second significant False Claims Act settlement with the federal government.
The U.S. Department of Justice announced the latest settlement Thursday, Sept. 17, saying the alleged conduct occurred over more than six years, from Jan. 1, 2015, through March 31, 2021.
Remedi, headquartered in Towson, Maryland, did not admit liability. The Justice Department emphasized that the claims resolved through the settlement are allegations and that it has not determined liability.
A review by STL.News of the underlying 24-page consent judgment and settlement agreement provides considerably more detail than the government’s announcement, including the precise financial obligation, payments to state Medicaid programs, the whistleblowers’ share of the recovery and provisions tied to Remedi’s financial condition.
Settlement reaches $5.5 million before interest
Under the federal agreement, Remedi consented to a judgment of $5,389,780, all characterized as restitution, plus interest of 4.5% annually beginning May 6, 2026.
Remedi separately agreed to pay $110,220, also characterized as restitution, plus 4.5% interest, to participating state Medicaid programs under separate state settlement agreements.
Together, the federal and state principal amounts total $5.5 million before interest.
The Justice Department said the settlement was based on Remedi’s ability to pay and would be paid over time. The underlying agreement makes clear how much the company’s financial condition influenced the resolution.
Remedi was required to make an initial payment of approximately $1.185 million by Sept. 11, with the remaining amount payable according to an agreed schedule.
If Remedi or its assets are sold before the settlement and applicable interest have been paid in full, the remaining balance becomes due at the time of the sale.
The agreement further states that the amount accepted by the federal government represents what it was willing to accept in compromise of its civil claims “due solely to Remedi’s financial condition.”
Government relied on sworn financial disclosures
Remedi provided sworn financial disclosures and supporting documentation to the federal government, and the Justice Department said it relied on those disclosures’ accuracy and completeness when negotiating the agreement.
The settlement contains protections for the government if those disclosures later prove materially inaccurate.
If the government discovers assets that should have been disclosed, or a false statement or misrepresentation affecting Remedi’s estimated net worth by at least $500,000, the United States can potentially rescind the agreement and reinstate litigation or pursue additional collection remedies specified in the settlement.
The agreement also states that the settlement obligation cannot be discharged if Remedi enters bankruptcy.
Former employees brought the case
The federal investigation originated with two former Remedi employees, Maureen Gearhart and Laura Griffieth.
They filed their False Claims Act lawsuit on Dec. 2, 2020, in the U.S. District Court for the Southern District of Ohio.
The case is United States ex rel. Gearhart & Griffieth v. Remedi SeniorCare Holding Corp., et al., Case No. 1:20-cv-970, before U.S. District Judge Douglas R. Cole.
The False Claims Act’s qui tam provisions allow private individuals with information about alleged fraud against the government to file lawsuits on the government’s behalf. Successful whistleblowers may receive part of the government’s recovery.
Gearhart and Griffieth will receive 20% of each federal settlement payment as the government receives it.
Based on the $5,389,780 federal principal amount alone, that represents approximately $1.078 million, although the ultimate amount the whistleblowers receive will depend on the payments actually received under the agreement.
The settlement also reveals that Gearhart asserted individual retaliation claims under the False Claims Act and provisions of Ohio law.
Those claims were resolved separately, as were the whistleblowers’ claims for attorneys’ fees, expenses and costs. The amounts of those separate agreements are not disclosed in the federal settlement reviewed by STL.News.
DOJ alleges drugs lacked valid prescriptions
At the center of the government’s case are prescriptions provided to residents of assisted-living facilities.
The United States alleged Remedi submitted claims to Medicare and Medicaid from January 2015 through March 2021 for prescription drugs that did not have valid prescriptions.
Those drugs were allegedly dispensed to residents of assisted-living facilities in multiple states.
Federal officials framed the allegations as both a taxpayer-protection and patient-safety issue.
“When pharmacies dispense drugs without valid prescriptions, they undermine both patient safety and the integrity of vital federal healthcare programs,” Assistant Attorney General Brett A. Shumate of the Justice Department’s Civil Division said in announcing the resolution.
The investigation involved the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section; the U.S. Attorney’s Office for the Southern District of Ohio; the Department of Health and Human Services Office of Inspector General; and the Ohio Attorney General’s Office.
Remedi previously paid $1.28 million
This is not Remedi’s first federal False Claims Act settlement.
Federal records reviewed by STL.News shows that Woodhaven Pharmacy Services Inc., doing business as Remedi SeniorCare, paid $1,279,575 in 2010 to resolve an earlier and separate federal investigation.
That matter involved different allegations and a different period of conduct.
Federal authorities alleged that between January 2006 and December 2007, Remedi dispensed medications to residents of long-term-care facilities and billed federal health programs for the drugs.
When residents died, were hospitalized, or otherwise stopped taking the medications, unused drugs were sometimes returned to Remedi.
The government alleged Remedi then re-dispensed some of those medications to other residents and billed government programs for the drugs again without providing appropriate credits to the programs that had originally paid for them.
Programs identified in the earlier federal case included Medicare Part D, Medicaid, TRICARE, and the Federal Employees Health Benefits Program.
Remedi denied the allegations, and the 2010 settlement did not constitute an admission of liability.
The earlier case also started with a whistleblower
Another notable parallel exists between the two cases.
Like the 2026 settlement, the earlier federal investigation originated with a whistleblower lawsuit.
Former Remedi pharmacist Barbara Dianne Thompson filed the earlier action under the False Claims Act’s qui tam provisions.
Thompson received approximately $191,000 from the federal government’s $1.28 million recovery, according to the FBI’s archived announcement of the settlement.
The two matters therefore represent separate False Claims Act settlements involving different allegations, different time periods, and different whistleblowers.
They should not be interpreted as a single continuous course of alleged conduct.
Five-year Corporate Integrity Agreement followed
The 2010 settlement resulted in more than a financial payment.
Remedi also entered into a five-year Corporate Integrity Agreement with the Department of Health and Human Services Office of Inspector General.
A subsequent Maryland Board of Pharmacy proceeding provides additional insight into the company’s compliance following that settlement.
The Maryland board reviewed Remedi’s policies concerning returned medications, claims processing, and repayment procedures.
According to the board’s September 2013 consent order, Remedi’s revised policies conformed with generally accepted standards for long-term-care pharmacies.
The board also recorded that Remedi was in full compliance at that time with its federal settlement agreement and Corporate Integrity Agreement.
That finding is significant context when considering the company’s earlier regulatory history.
The Maryland proceeding ultimately required Remedi to continue complying with the federal agreement and provide the board with copies of reports submitted to HHS-OIG.
Remedi also agreed to make a $10,000 anonymous charitable contribution to an organization providing services to elderly people.
The Maryland consent order expressly stated that it was not to be construed as disciplinary action, a sanction or an admission of wrongdoing.
New allegations arose years later
The timeline shows a substantial separation between the two federal matters.
The first alleged conduct occurred during 2006 and 2007 and resulted in the 2010 settlement and Corporate Integrity Agreement.
The conduct underlying the latest settlement allegedly began on Jan. 1, 2015, and continued until March 31, 2021.
The latest whistleblower lawsuit was filed in December 2020, while the alleged conduct was still occurring, according to dates contained in the federal settlement agreement.
The government eventually intervened to resolve the case.
Settlement doesn’t release every possible claim
The agreement carefully defines what the government is releasing and what remains outside the settlement.
Among other things, the United States expressly reserved potential criminal liability, certain administrative enforcement rights, liability involving conduct outside the specifically covered conduct, and potential liability of individuals.
The government also reserved claims concerning defective or deficient products or services, failure to deliver goods or services, and personal injury or property damage arising from the covered conduct.
Those reservations are standard legal protections and do not establish that criminal charges, personal-injury cases or additional enforcement proceedings will occur.
The agreement also prohibits Remedi from seeking payment from health-care beneficiaries, their parents, sponsors, legally responsible individuals or third-party payers for health-care billings covered by the settlement.
Remedi additionally agreed not to resubmit certain previously denied claims related to the covered conduct and not to appeal such denials.
Settlement costs cannot be passed back to federal programs
Another provision prevents Remedi from shifting certain case-related costs back onto taxpayers.
Costs associated with the settlement, investigation, defense, corrective actions, negotiations and specified payments are treated as unallowable costs for purposes of government contracts and federal health-care programs.
Remedi cannot directly or indirectly charge those costs to Medicare, Medicaid, TRICARE or the Federal Employees Health Benefits Program.
The company must also identify any such costs previously included in reimbursement requests and seek appropriate adjustments under the agreement.
Federal health-care fraud enforcement continues
The Remedi settlement comes as federal authorities continue using the False Claims Act as one of the government’s primary mechanisms for recovering taxpayer money allegedly obtained through improper health-care claims.
Unlike criminal prosecution, a False Claims Act settlement can resolve civil allegations without a defendant admitting wrongdoing or a court finding the allegations proven.
That distinction matters in the Remedi case.
The Justice Department alleged that Remedi improperly billed Medicare and Medicaid for prescription drugs lacking valid prescriptions. Remedi agreed to the financial settlement but did not admit liability.
The federal government likewise did not obtain a trial verdict establishing that Remedi violated the False Claims Act.
The public record does establish that Remedi has entered into two significant federal False Claims Act settlements over approximately 16 years.
The first resulted in approximately $1.28 million paid to resolve allegations concerning returned and re-dispensed medications and was followed by a five-year Corporate Integrity Agreement.
The latest resolution calls for $5.389 million in federal restitution and another $110,220 for participating state Medicaid programs, plus interest.
And once again, former employees played a central role in bringing the allegations to the government’s attention.
Editor’s note: The claims described in the 2026 settlement and the earlier 2010 matter were allegations resolved without admissions of liability. The 2026 Justice Department announcement expressly states that there has been no determination of liability. References to the earlier matter provide documented regulatory history and should not be interpreted as proof of the allegations resolved in the current case.
