Nursing home pharmacy giant Omnicare, now part of CVS-Caremark, will pay $8 million to resolve allegations that its dispensing practices put patient safety at risk.
Omnicare is a Fortune 500 company that owns and operates pharmacies servicing 1.4 million residents in nursing homes and long term care facilities in 47 states.
The company, which has settled numerous False Claims Act cases in the past, has been operating under a Corporate Integrity Agreement that, in theory, requires it to clean up its act and be subject to stiffer penalties if it does not.
What’s the conduct at issue in this most recent case?
Medicare bases its payment for drugs on the NDC (National Drug Code) number of the drug dispensed, and certification that the company is using the correct NDC is an explicit condition of payment under Medicare and Medicaid. It seems the company invented 10-digit codes in order to speed up a robotic drug dispensing system that it created to send prescriptions to client nursing homes and long term care facilities. In many cases the Omnicare codes did not accurately identify the drugs actually dispensed, and its system would have prevented Medicare from tracing and recalling adulterated or toxic drugs.
Elizabeth Corsi and Christopher Ezzie, the relators who brought this conduct to the attention of the government, are licensed pharmacists who worked for Omnicare and witnessed the implementation of this scheme first hand. They brought their suit because they believed Omnicare’s conduct put the health and safety of elderly patients at risk.
Their case was brought to the United States Attorney’s Office for the District of New Jersey by the law office of Charles Goetsch. The Department of Justice intervened in the case and settled it for $8 million, with a little over $1.47 million of this sum going to the whistleblower for developing the case on the government’s behalf.
Past Omnicare fraud settlements with the federal and state governments include False Claim Act cases settled in 2009 for $112 million, in 2014 for $124 million, in 2014 for $4.19 million, and in 2016 for $28 million.