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Kickbacks made with Chicago Nursing Home Operators

Illinois state authorities are declining to pursue civil allegations made by whistle-blowers that said one of the nation’s largest pharmacy companies, Ominicare Inc., paid a multimillion-dollar kickback to Chicago nursing home operators. There has been a civil lawsuit filed by two health care industry insiders. This lawsuit claims that Omnicare Inc was allegedly inflating the purchase price it paid for a pharmacy company that was controlled by the Chicago nursing home operators Phillip Esformes and Morris Esformes. These lawsuits were brought under the federal False Claims Act which allows private citizens to file fraud actions on behalf of the government and recover those funds on the government’s behalf.

In 2004 Omicare paid $32 million for Total Pharmacy which included millions of dollars that are alleged to be a kickback to secure long-term pharmacy contracts with the Esformes family’s nursing homes. Illinois Attorney General Lisa Madigan’s office and the U.S. Justice Department declined to intervene for lack of a burden of proof. However, the civil nursing home lawsuit against the owners will continue. The Chicago Tribune reported that the father and son due are listed as part-owners of 28 nursing homes in Illinois and Florida. These cases include a cluster of whistle-blower lawsuits that Omnicare recently settled by paying $98 million. Through these kickbacks Omincare has secured the use of their pharmaceuticals in nursing homes throughout the country. This drives up prices of the drugs and ultimately the cost of patient care. To read more about the nursing home lawsuits, please click the link.

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