Omnicare Inc., an Ohio-based long-term care pharmacy, has agreed to pay the government $4.19 million to settle allegations that it engaged in a kickback scheme in violation of the False Claims Act, the Justice Department announced today. Omnicare provides pharmaceuticals and services to long-term care facilities and residents and other senior populations.
The settlement resolves allegations that Omnicare solicited and received kickbacks from the drug manufacturer Amgen Inc. in return for implementing “therapeutic interchange” programs that were designed to switch Medicaid beneficiaries from a competitor drug to Amgen’s product Aranesp. The government alleged that the kickbacks took the form of performance-based rebates that were tied to market-share or volume thresholds, as well as grants, speaker fees, consulting services, data fees, dinners and travel.
“Kickbacks are designed to influence decisions by health care providers, such as which drugs to prescribe,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “Americans who rely on federal health care programs, particularly vulnerable patients in skilled nursing facilities, are entitled to feel confident that decisions about their medical care are not tainted by improper financial arrangements.”
“The District of South Carolina has devoted significant resources over the last three years to pursuing claims under the False Claims Act, and this settlement is the latest example of this office’s successful efforts,” said U.S. Attorney for the District of South Carolina William Nettles. “I am very proud of the work this office has done in this area.”
This civil settlement resolves a lawsuit filed under the qui tam, or whistleblower, provision of the False Claims Act, which allows private citizens with knowledge of false claims to bring civil actions on behalf of the government and to share in any recovery. The relator’s share in this case is $397,925.
“Kickbacks corrode our federal health care programs,” said Derrick L. Jackson, Special Agent in Charge of the Office of Inspector General, U.S. Department of Health and Human Services in the region covering South Carolina. “OIG is committed to unveiling these illegal reciprocal relationships, and companies making or receiving such payments can expect serious consequences.”
The settlement with Omnicare Inc. was the result of a coordinated effort among the Civil Division, the U.S. Attorney’s Office for the District of South Carolina and the U.S. Department of Health and Human Services Office of Inspector General.
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and Secretary of Health and Human Services Kathleen Sebelius. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $19 billion through False Claims Act cases, with more than $13.4 billion of that amount recovered in cases involving fraud against federal health care programs.
The claims settled by this agreement are allegations only; there has been no determination of liability.
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