Whistleblower suit against birth control provider leads to $18 million settlement in California

California officials have agreed to an $18 million settlement in a lawsuit brought by two whistleblowers who accused a medical company of overbilling medical insurers for birth control prescriptions doled out without the required oversight by physicians.

The agreement comes in a previously secret lawsuit filed in Sacramento Superior Court in 2019 by two former nurse practitioners who worked for a company called The Pill Club.

The settlement calls for the state Justice Department to be paid $15 million and the state Insurance Department to receive $3.275 million, according to an announcement by attorneys Michael Hirst of Davis and Anderson Berry of Sacramento.

The agreement calls for the whistleblowers — Cindy Swintelski Schwartz and Happy Baumann — and their lawyers to share $4.59 million from the settlement, which does not include an admission of liability by The Pill Club.

“When I joined The Pill Club just over two years ago, I was drawn to the challenge of strengthening our operations to live up to our mission,” Liz Meyerdick, chief executive officer of The Pill Club, said in a statement Tuesday. “I’m glad to have the opportunity to resolve these issues and to bring our full focus back to expanding access to contraceptive care for all who need it.”

The lawsuit, filed under seal through the California False Claims Act, alleged that The Pill Club and affiliates “participated in a scheme that defrauded millions of dollars from Medi-Cal and private health care insurance providers in at least 38 states, including California.”

“Defendants knowingly and routinely presented bills to Medi-Cal and private health care insurers for patients prescribed birth control pills and related products by nurse practitioners that were not properly supervised under California law by a medical doctor,” the suit said.

The lawsuit alleged that nurse practitioners prescribing birth control products rarely spoke with patients in person or by phone, instead using text messages or emails.

“The nurse practitioner (‘NP’) spends from approximately 15 seconds to a few minutes assessing and diagnosing the patient before prescribing the birth control,” the suit said. “NPs are encouraged to complete an astounding 120 prescriptions per day, with some claiming they can complete 600 per day.

“Thus, in California alone, there could be thousands of prescriptions rubber-stamped by Defendants’ NPs every single day. The pharmaceuticals and other products are then delivered by mail, with no delivery charge and, depending on the health care insurer, no co-pay. The deliveries also come with ‘chocolate and sample gift items.’”

Hirst said in a statement that Pill Club officials ignored complaints from the whistleblowers that they were being pressured to prescribe contraceptives without oversight by a medical doctor.

“At the same time, The Pill Club pressured them on a daily basis to write more prescriptions per day,” Hirst said in the statement. “We’re proud of the whistleblowers for their courage in coming forward to stop conduct they knew was wrong.

“If more people did that, there would be much less waste, fraud, and abuse in our health care system.”