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Justice News

Department of Justice
U.S. Attorney’s Office
Eastern District of California

Wednesday, October 19, 2016

Government Reaches $2.24 Million Settlement with Institutional Pharmacy Omnicare in Lawsuit First Brought by Former Regional Service Area Director in Lodi

Settlement Resolves Allegations of Falsely Billing Federal and State Health Care Programs for Prescription Drugs

SACRAMENTO, Calif. — Omnicare Inc., a national long-term care pharmacy, will 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 (NDC) 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.

As part of the settlement, CVS Health Corporation and its subsidiaries also entered into a five-year Corporate Integrity Agreement (CIA) with the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) that covers their institutional pharmacy services operations. The CIA is designed to increase accountability and transparency and to avoid or promptly detect future fraud and abuse.

“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,” said Acting U.S. Attorney Talbert.

The allegations resolved by the 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, California. 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 will receive approximately $411,624 of the recovery proceeds.

This case was pursued by Assistant United States Attorney Edward Baker through a coordinated effort with the Department of Health and Human Services Office of Inspector General and Office of General Counsel, the Civil Division of the Department of Justice, the Federal Bureau of Investigation, and the Defense Health Agency. A team from the National Association of Medicaid Fraud Control Units assisted with the investigation and participated in settlement negotiations on behalf of the states, and included representatives from the Offices of the Attorneys General for the states of California, Massachusetts, New York, Ohio, and Texas.

The claims settled by this agreement are allegations only, and there has been no determination of liability.

Health Care Fraud
Press Release Number: 
2:13-cv-1552 MCE
Updated October 19, 2016