Hayat settles $2M in Medicare, Medicaid fraud case despite disputing vigorously

MILWAUKEE (CBS 58) -- The Health Mart Independent Pharmacy of the year, Hayat Pharmacy, has settled out of court over allegations of Medicare and Medicaid fraud for over $2 million.

Hashim Zaibak, Hayat pharmacist and CEO of the company, said the accusations were made by a former employee over two years ago.

He claims the allegations are false, and the company is trying to move forward.

"From the very beginning, we knew that they were false and they could not be proven. At the end we had to settle, though," said Zaibak.

State representatives honored Hayat Pharmacy Friday as pharmacy of the year, with a plaque from Governor Tony Evers.

The same day, the U.S. Department of Justice announced a $2 million settlement over fraud.

The U.S. Department of Justice said the whistleblower claimed Hayat Pharmacies submitted false claims for two medications in 2019, switching patients to different medications and having Medicaid pay thousands for topical cream prescriptions and Medicare pay hundreds of dollars for multi-vitamin prescriptions.

A statement from U.S. Attorney Richard Frohling said the change was unneeded, which is why they worked to protect taxpayer dollars.

“Medicare and Medicaid only pay for prescription medications that are needed by patients, not prescriptions dispensed by pharmacies simply to increase their profits. This settlement imposes a significant penalty on Hayat Pharmacy and will make the federal government whole for the pharmacy chain’s wrongdoing," said Frohling.

Zaibak said they had enough of a back-and-forth dealing with the case and the pandemic at the same time.

"We're really trying to do the best we can, working 60, 70, 80 hours a week trying to take care of the community. It was on the back of our mind, and working while also trying to prove your innocence was not easy," said Zaibak.

The settlement also requires pharmacy staff to have annual training concerning waste, fraud or abuse, and compliance with rules concerning medication switches.

Zaibak said the communities the pharmacy serves have been supportive.

"People saying 'we know who you are, these are truly false accusations'," said Zaibak.

The whistleblower that initiated the claim also receives a share of the settlement.

Settlements are not an admission of guilt.