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Illinois Nursing Home Kickback Lawsuit Settles

Each Chicago nursing home neglect attorney at our firm argues vehemently against the unsavory tactics used by so many long-term care facilities that maximize their own profits at the expense of residents who depend on their care. Obviously private facilities are motivated to make a profit. Yet, that does not mean that everything done by those companies to increase their bottom line is acceptable–particularly when so many very vulnerable residents see their quality of life deteriorate as a result.

Residents, their family, friends, and former employees of these institutions must all band together to expose all cut-corners and dangerous practices in order to hold them accountable and ultimately improve the lives of seniors.

Sometimes that accountability comes when whistleblowers break their silence and explain deceptive practices by the facility where they worked. One of the most high-profile examples of this involves a case where a large pharmaceutical firm is alleged to have given millions in kickbacks to a nursing home chain. It is a clear example of the way that the profit-motive for owners and operators often outshines the actual best interests of residents.

Illinois nursing home lawyers know that this particular case is somewhat complex–a testament to the way these sorts of arrangements are often clouded to hide their nature. Specifically, federal officials allege that the pharmaceutical company, Omnicare, grossly inflated the value of another pharmacy company which was controlled by the nursing home owners. Omnicare bought that small pharmacy company, and because of the inflated value, the family received a premium on the sale. Court documents allege that the inflated value–a kickback–amounted to as much as $16 million. The total purchase price for the pharmacy was $32 million. In other words, the allegations argue that the company paid twice as much as the business was actually worth.

Omnicare was willing to give the kickback in order to secure long-term contracts with nearly three dozen local nursing homes. The family either owned or influenced the business decisions of those facilities. The two entities were willing to make whatever decision necessary to help their own bottom line instead of making reasonable decisions based on fair business practices and proper use of funds–mostly provided by taxpayers–to provide care for long-term care.

Recently, according to the Chicago Tribune, Omnicare decided to settle the lawsuit with the federal government. The terms of the agreement have not been publicly disclosed, and it will not be official until approved by the court.

It is important to note that the family which owns the facility continues to fight all allegations made by federal officials. They claim that they did nothing wrong, and the the latest Omnicare settlement was simply a business decision. The family has not been charged with any crimes in the case.

However this all shakes out, each Illinois nursing home lawyer at our firm believes this is an important reminder of the complex nature of money and long-term care quality. Money influences care at so many locations–often as a result of staffing cuts to save on payroll. Beyond staffing, situations like this also arise, where various pharmaceutical and other issues are influenced not by the best interests of the resident but the bottom line of the owner or operator.

See Our Related Blog Posts:

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Drug Companies in Lawsuit for Illegally Receiving Nursing Home Residents