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Another OmniCare Settlement

Published on October 1st, 2010

Cincinnati.com reported another settlement involving OmniCare Inc worth more than $21 million from charges that the firm overcharged Medicaid programs in Michigan and Massachusetts. The settlement by the nation’s largest provider of pharmaceutical care for the elderly stems from a whistleblower lawsuit filed in federal court in Chicago in 2003 by a former Omnicare financial analyst.  The allegations involve kick backs, fraud, and bribery with various nursing home chains.

Omnicare was accused of not following "usual and customary" pricing regulations when charging Medicaid for prescription drugs supplied to residents of skilled-nursing facilities in the two states. For example, in 2001 Omnicare’s North Shore Pharmacy in Massachusetts was paid by private insurers an average of $27.75 per prescription, while its payments for Medicaid patients averaged $47.15 per prescription.

Under the settlement announced, Omnicare will pay $9.45 million to Massachusetts and $11.6 million to Michigan.  It is unclear how many hundreds of millions OmniCare profited with the overcharding of Mediciad residents.  The settlement also requires Omnicare to comply with pricing regulations, which include billing the lowest price the company charges a private third-party customer for the same drug.

In a filing with the Securities and Exchange Commission, the company said that the settlement agreement with Michigan and Massachusetts includes a provision to dismiss claims against the company included in another whistleblower lawsuit that is pending in Illinois related to the same charges.

Among other settlements, Omnicare paid $98 million last November to settle a whistleblower lawsuit that charged the company accepted kickbacks from drug giant Johnson & Johnson.  As part of that settlement, five whistleblower lawsuits were dismissed.

 

Joe Pioletti
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