Omnicare Pharmacy to Pay $124M Settlement for Illegal Kickbacks to Nursing Homes

Image by David Shankbone - Own work, CC BY 3.0

Omnicare Inc., the largest pharmacy provider for nursing homes in the U.S., has agreed to pay $124.24 million to settle claims that it submitted false bills to Medicare and Medicaid, according to a recent story from justice.gov. 

Omnicare Allegedly Paid Illegal Kickbacks to Nursing Homes

Omnicare was accused of giving improper financial incentives to nursing homes to ensure they would choose Omnicare as their pharmacy provider. The company allegedly provided prescription drugs at below-market prices to these nursing homes, which then billed Medicare for patient care, while Omnicare separately billed Medicare and Medicaid for the medications.

According to Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, “Omnicare provided improper discounts in return for the opportunity to provide medication to Medicare and Medicaid beneficiaries.” He added, "nursing homes should select their pharmacy provider based on the best quality, service and cost to the residents, not based on improper discounts to the nursing facility.”

Whistle-Blowers Brought the Claim Forward

The case was brought forward by two whistleblowers under the False Claims Act, which allows individuals to sue on behalf of the government and receive part of the recovery. One of the whistleblowers, former Omnicare employee Donald Gale, will receive $17.24 million.

$8.24 million will go to various states that co-funded the affected Medicaid programs.

This settlement highlights the government’s efforts to prevent fraud in healthcare programs and ensure that medical decisions are based on patient needs rather than improper financial deals.

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