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Bates Drug Stores Inc. agrees to pay settlement

Bates Drug Stores Inc. has agreed to pay $602,271 to settle allegations that it double-billed Medicare and Medicaid.

The U.S. Department of Justice along with Washington state officials announced the deal Tuesday. It included accusations that Bates, an employee-owned pharmacy that has been doing business in Spokane for about 70 years, submitted false claims between May 2006 and January 2011.

Bates attorney Jeff Bornstein said the pharmacy was never accused of fraud and did not admit wrongdoing. Rather, the pharmacy’s record-keeping and internal controls needed upgrading to comply with increasingly complex billing procedures.

He said the pharmacy filled “legitimate prescriptions for legitimate patients of legitimate doctors.”

The pharmacy’s management team disagrees with the government regarding the billing problems, Bornstein said. It agreed to the settlement to avoid expensive and protracted litigation that would have arisen had the government filed a civil enforcement lawsuit.

“Mistakes may have been made,” Bornstein said. “We’re just hopeful that this settlement will allow the pharmacy to move forward.”

Bates previously agreed to stop handling or dispensing Schedule II controlled drugs from Nov. 23, 2011, to April 30, 2012.

The case was handled by the U.S. attorney’s office of Eastern Washington, along with the Washington attorney general’s Medicaid fraud unit.

Federal investigators have netted more than $8.8 billion from fraud investigation during the past three years.