Omnicare Agrees To Settle Suit Over Reimbursement Claims

Omnicare, Inc., based in Covington, Kentucky, agreed to settle a lawsuit alleging it submitted false claims for reimbursement to government health insurers and paid a “kickback” when it bought the pharmacy company, Total Pharmacy Services, LLC.  Omnicare is a company that supplies drugs to nursing homes.  The 2007 lawsuit was filed by whistleblower, Maureen Nehls.  A hearing is set on September 25, 2012 by U.S. District Judge John J. Tharp, Jr.  A complaint was initially filed in 2006 by Nehls and an additional whistleblower, Adam Resnick.  Resnick plead guilty and was sentenced in 2007 to 42 months in prison for “siphoning $10.2 million from Universal Federal Savings Bank in 2001 and 2002.”  As a result, Universal had to fold and Resnick was eventually paid a settlement of 19.9 million for this suit.

Omnicare, Nehls claimed, purchased Total Pharmacy Services LLC in 2004 for $25 million which included a kickback to Philip Esformes, one of the owners, and Morris Esformes, Philip’s father.  According to the complaint, the payment provided Omnicare with thousands of elderly and disabled clients through successful contracts with nursing homes controlled by Morris Esformes.  Omnicare was also accused of supplying nursing home residents medicine without prescriptions or with missing prescription documentation.  On May 11, the case was settled with the Justice Department for $50 million.  The DOJ stated it was the “largest controlled substance settlement in history.”  Furthermore, Omnicare agreed to pay $98 million, in November 2009, to settle the civil claims by the U.S. government and assorted states that it received kickbacks from Johnson and Johnson.

For more information, please see:
http://www.businessweek.com/news/2012-08-24/omnicare-agrees-to-settle-suit-over-reimbursement-claims