An Ohio pharmacist who complained that his employer was paying kickbacks to nursing homes for the right to supply drugs to elderly patients will collect more than $17 million as part of the DOJ’s settlement of the case.
Donald Gale worked for Omnicare Inc. — the nation’s largest provider of pharmaceuticals and pharmacy services to nursing homes — from 1993 to 2010.
He’ll collect $17.2 million from Omnicare’s settlement of false claims lawsuits that were headed to a federal jury trial in Cleveland.
The DOJ said Wednesday that Cincinnati-based Omicare agreed to pay more than $124 million to resolve allegations it gave improper discounts for drugs it supplied to Medicare and Medicaid patients.
Gale was the first whistleblower in the case, the DOJ said.
The U.S. Anti-Kickback Statute prohibits offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid, and other federally funded programs.
The False Claims Act allows private parties to sue on behalf of the government and to share in any recovery. The DOJ can intervene as a plaintiff and sometimes does.
Assistant U.S. Attorney General Stuart Delery said discounting schemes like Omnicare’s “undermine the health care system and take advantage of elderly nursing home residents.”
Medicare is a federal health insurance program for seniors.
Medicaid is a state-run program that helps pay for health care for the elderly and other needy people. The federal government reimburses states for a percentage of the cost.
The DOJ said the settlement wasn’t an admission of liability and Omnicare has denied any wrongdoing.
About $8.2 million from the settlement will go to states whose Medicaid programs were affected by the alleged kickback scheme, the DOJ said.
“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,” said Steven Dettelbach, U.S. Attorney for the Northern District of Ohio.
Since January 2009, the DOJ said, it has recovered more than $19.5 billion through False Claims Act cases against an unspecified number of defendants.
The DOJ’s June 25, 2014 release is here.
Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.