Manhattan U.S. Attorney Files Lawsuit Against Omnicare, Country’s Largest Long-Term Care Pharmacy, And Parent Company CVS For Fraudulently Billing For Drugs Dispensed To Elderly And Disabled Individuals Without Valid Prescriptions
Suit Alleges Omnicare Dispensed Hundreds of Thousands of Drugs without Valid Prescriptions to Individuals Living in Assisted Living and Other Non-Skilled Residential Long-Term Care Facilities
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, and Scott J. Lampert, Special Agent in Charge of the New York Regional Office of the U.S. Department of Health and Human Services, Office of the Inspector General (“HHS-OIG”), announced today that the United States has filed a civil healthcare fraud lawsuit against OMNICARE, INC., and its parent company, CVS HEALTH CORPORATION. The Government’s Complaint seeks damages and civil penalties under the False Claims Act for fraudulently billing federal healthcare programs for hundreds of thousands of non-controlled prescription drugs dispensed based on stale, invalid prescriptions to elderly and disabled individuals. These individuals lived in assisted living facilities, group homes, independent living communities, and other non-skilled residential long-term care facilities. The illegally dispensed drugs include antipsychotics, anticonvulsants, and antidepressants.
The lawsuit alleges that OMNICARE failed to obtain new prescriptions from patients’ doctors after the old ones had expired or run out of refills. Instead, OMNCIARE just assigned a new number to the old prescription and kept on dispensing drugs for months, and sometimes years, after the prescriptions had expired. OMNICARE internally referred to these as “rollover” prescriptions. As set forth in the Complaint, OMNICARE submitted, or caused to be submitted, false claims for payment for these illegally dispensed drugs to Medicare, Medicaid, and TRICARE.
Manhattan U.S. Attorney Geoffrey S. Berman said: “As alleged, Omnicare put at risk the health of tens of thousands of elderly and disabled individuals living in assisted living and other residential long-term care facilities by dispensing drugs for months, and sometimes years, without obtaining current, valid prescriptions from doctors. A pharmacy’s fundamental obligation is to ensure that drugs are dispensed only under the supervision of treating doctors who monitor patients’ drug therapies. Omnicare blatantly ignored this obligation in favor of pushing drugs out the door as quickly as possible to make more money. This Office will continue to hold accountable those who put at risk people’s health and safety just to turn a profit.”
HHS-OIG Special Agent in Charge Scott J. Lampert said: “Failing to consult doctors as to whether prescriptions should be refilled places patients’ health and medical care at serious risk. These automatic rollover refills could have significant consequences for vulnerable people in long term-care facilities. We will continue working with law enforcement partners to protect people depending on these taxpayer-funded government health programs.”
The following allegations are based on the Complaint that was filed in Manhattan federal court today:
OMNICARE is the country’s largest provider of pharmacy services to long-term care facilities, operating approximately 160 pharmacies in 47 states across the United States. Every year, OMNICARE dispenses tens of millions of prescription drugs to long-term care facilities, including assisted living and other non-skilled residential facilities that serve elderly and disabled individuals. CVS acquired Omnicare in May 2015, and shortly thereafter assumed an active role in overseeing OMNICARE’s operations, including pharmacy dispensing practices and systems.
From 2010 until 2018, OMNICARE and CVS allowed OMNICARE pharmacies to dispense non-controlled prescription drugs to tens of thousands of elderly and disabled individuals living in assisted living and other residential long-term care facilities across the country based on prescriptions that had expired, were out of refills, or were otherwise invalid. OMNICARE repeatedly disregarded prescription refill limitations and expiration dates that would have triggered doctor visits to evaluate whether the drug should be renewed, choosing instead to push drugs out the door as fast as possible based on stale, invalid prescriptions. OMNICARE managers exerted pressure on overwhelmed pharmacy staff to fill prescriptions quickly so that OMNICARE could submit claims and collect payments. Many pharmacies had to process and dispense thousands of orders each day.
Instead of requesting new prescriptions when old ones expired, OMNICARE allowed prescriptions to “roll over.” At OMNICARE, “rolling over” a prescription meant that when a prescription expired, OMNCIARE’s computer systems would assign the old prescription a new number and the pharmacy would continue to dispense the drug indefinitely without the need for a prescription renewal. Depending on the computer system used, OMNICARE also sometimes assigned a fake number of authorized refills to a prescription – usually 99 allowable refills for Medicare patients – to allow for continuous refilling. OMNICARE pharmacies “rolled over” prescriptions for elderly and disabled individuals living in more than 3,000 residential long-term care facilities, including assisted living facilities operated by the largest long-term care providers in the country, such as Brookdale Senior Living, Atria Senior Living, Sunrise Senior Living Services, and Five Star Senior Living.
Senior OMNICARE and CVS management knew that pharmacies were routinely dispensing drugs without valid prescriptions, but they failed to begin to address the problem until after they found out about this Office’s investigation. Indeed, OMNICARE’s Compliance Department succinctly acknowledged the problem in an internal April 2015 email in which one Regional Compliance Officer stated: “An issue that I am running into more and more in multiple states concerns the ability of our systems to allow prescriptions to continue to roll after a year to a new prescription number without any documentation or pharmacist intervention.” A compliance officer then forwarded the email to the head of OMNICARE’s Third Party Audit group, who responded that she had a “potential solution (programmed last year) but no one is rolling it out now.”
OMNICARE’s practice of illegally dispensing drugs to elderly and disabled individuals living in residential facilities exposed these vulnerable individuals to a significant risk of harm. In contrast to traditional skilled nursing homes, where residents have access to 24-hour medical care supervised by doctors, assisted living and other non-skilled residential facilities offer more limited medical care, or none at all. In particular, these facilities generally do not have doctors on staff to oversee and monitor residents’ drug therapy.
Many of the prescription drugs dispensed by OMNICARE without valid prescriptions treat serious, chronic conditions, such as dementia, depression, and heart disease. They include antipsychotics, anticonvulsants, cardiovascular medications, anti-depressants, and other drugs that can have dangerous side effects and need to be closely monitored by doctors, particularly when taken in combination with other drugs by elderly patients. By repeatedly dispensing potent drugs without current and valid prescriptions, OMNICARE jeopardized the health and safety of tens of thousands of individuals who continued to take the same drugs for months, and sometimes years, without consulting their doctors to determine whether the medications were still clinically appropriate.
A large percentage of the long-term care residents served by OMNICARE are beneficiaries of federal healthcare programs. By dispensing drugs without valid prescriptions, OMNICARE presented, or caused to be presented, hundreds of thousands of false claims to Medicare, Medicaid, and TRICARE. These claims were ineligible for payment. In addition, OMNICARE knowingly transmitted false information to these federal healthcare programs that made it appear that drug dispensations were supported by current, valid prescriptions from physicians when in fact they were not.
The Government intervened in two private whistleblower lawsuits before Chief Judge Colleen McMahon that had previously been filed under seal pursuant to the False Claims Act.
Mr. Berman thanked HHS-OIG for its assistance with the case.
The case is being handled by the Office’s Civil Frauds Unit. Assistant U.S. Attorneys Jeffrey K. Powell and Mónica P. Folch are in charge of the case.