Omnicare Settles Medicare Fraud Case for $120M; Whistleblower May Get $36M

Ohio-based pharmacy service provider Omnicare Inc. has agreed to pay $120 million to settle allegations that the company violated the Anti-Kickback Statute and the False Claims Act.  Omnicare is one of the nation’s largest providers of pharmacy services to the elderly.

Omnicare allegedly offered skilled nursing facilities steep discounts for drugs for their Medicare Part A patients, sometimes even below cost, in order to induce referrals of those facilities’ non-Medicare Part A patients. The skilled nursing facilities, meanwhile, were reimbursed by Medicare at a flat fee. The Anti-Kickback Statute prohibits remuneration, in cash or in kind, to induce referrals for items or services that will be paid by a federal health care program, such as Medicare.  This remuneration resulted in false claims being submitted to Medicare that Medicare would not have paid, had it known that the claims were premised upon illegal kickbacks.

The lawsuit was filed by Donald Gale, a former Omnicare employee, under the whistleblower provisions of the False Claims Act.  The False Claims Act allows private parties with knowledge of fraud against the government to sue on behalf of the government and share in the recovery.  The government elected not to intervene in this case, and Gale may receive up to 30 percent of the recovery, or up to $36 million.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.