Lodi whistleblower’s actions lead to $2.24 Million settlement
October 19, 2016
• Resolves allegations of false billing by Omnicare Inc.
• Another settlement announced Monday was for more than $28 Million
For CVS Health Corporation, it’s sort of like having bought a used car only to have its wheels fall off as soon as it’s driven off the lot.
At issue are penalties adding up to more than $30 million that CVS is having to pay for business practices of Omnicare Inc., which occurred before CVS bought the Ohio firm.
On Monday, the Department of Justice announced that Omnicare, the nation’s largest nursing home pharmacy, had agreed to pay $28.125 million to resolve allegations that it solicited and received kickbacks from pharmaceutical manufacturer Abbott Laboratories in exchange for promoting the prescription drug, Depakote, for nursing home patients.
Now, thanks to a whistleblower from Lodi, that tab is $2.24 million larger.
Omnicare has agreed to pay a combined $2.24 million to resolve federal and state False Claims Act allegations that it improperly billed federal and state health care programs for prescription drugs that were dispensed to patients in skilled nursing and other institutional care facilities.
Specifically, the settlement resolves allegations that Omnicare employees manually altered the National Drug Code field on claims resubmitted to Medicare, Medicaid, and Tricare, in order to overcome prior rejection of these claims for payment. The alleged conduct occurred between January 1, 2006, and September 1, 2014, prior to CVS Health Corporation’s purchase of Omnicare.
“We are committed to ensuring the integrity of the federal health care system, and this extends to paying only for drugs that accurately reflect an underlying prescription,” says Acting U.S. Attorney Phillip Talbert.
The allegations resolved by the Wednesday settlement were first raised in a lawsuit filed against Omnicare under the “qui tam,” or whistleblower, provisions of the False Claims Act by a former Regional Servicer Area Director in Omnicare’s pharmacy in Lodi. The Act allows private citizens with knowledge of false claims to bring civil actions on behalf of the government and to share in any recovery. The whistleblower in this matter, who was not idenrtified, will receive approximately $411,624 of the recovery proceeds.
CVS Health Corporation, which is headquartered in Rhode Island, acquired Ohio-based Omnicare in 2015, approximately six years after Omnicare ended the conduct that gave rise to the settlement.