Omnicare nursing home pharmacy pays $124 million to settle Medicare fraud allegations

The nursing home pharmacy company Omnicare, will pay $124 million to settle allegations in a federal whistleblower suit that it offered improper discounts to skilled nursing facilities and made false billings to federal health programs including Medicare, says the Department of Justice.

The settlement resolves allegations that Omnicare entered below-cost contracts to supply prescription medication and other pharmaceutical drugs to skilled-nursing facilitiesӔwhich were participating providers under agreements with Medicare and MedicaidӔto induce them to select Omnicare as their pharmacy provider, according to the Justice Department.

In addition to the facilities’ claims for reimbursement from Medicare for short-term rehabilitation treatments, Omnicare also submitting reimbursement claims to Medicare and Medicaid for drugs the company supplied, the DOJ said.

The Justice Department said $8.24 million of the settlement will go to states that jointly funded the Medicaid programs that were affected. The settlement also resolves allegations brought in two lawsuits filed by whistleblowers under the False Claims Act, which allow private parties to file lawsuits on behalf of the government and to share in any recovery. The first whistleblower, former Omnicare employee Donald Gale, will receive $17.24 million. Mr. Gale, an Ohio pharmacist, worked for the company from 1993 until 2010. He is represented by a law firm in Ohio. According to the Justice Department, the Anti-Kickback Statute prohibits offering, paying, soliciting, or receiving compensation to persuade referrals of items or Medicare- and Medicaid-covered, and other federally funded, programs. The Anti-Kickback Statute is meant to ensure that the selection of health care providers and suppliers is not impacted by inappropriate financial incentives and is, rather, based on the patient’s best interests.

Jeffrey Newman represents whistleblowers. He can be reached at 1-800-682-7157