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Settlement in Nursing Home Kickback Case?

The root of much nursing home neglect and abuse is the prioritization of profits over residents made by owners and operators of these facilities. The risk of mistreatment increases continually based on day-to-day choices made by decision-makers at the facility: How many caregivers should be staffed on each shift? Should we install new safety doors? How much time should we allocate for properly training new employees? What protocols should we put in place to ensure residents receive proper nutrition?

Obviously, the answers to those and many other questions have a financial impact on the home. Doing the right thing to protect resident well-being may have a cost. But considering there are lives on real human beings on the line, these facilities are not free to simply make the cheapest choice every step of the way. State and federal guidelines are specific about the standards that must be kept up at all times–regardless of the cost.

Sadly, facilities frequently fall far short of those standards, resulting in severe harm to seniors. Profits continue to distort quality care.

Medicare & Medicaid Fraud
The drive to make more money manifests itself in many other ways as well–even those that have more tangential effects on resident care. For example, nursing homes contract with third-parties to provide services, including pharmaceutical care, physical therapy, and similar support. Because much of the funding for long-term care comes from Medicare and Medicaid, there are specific rules that must be followed when working with other service-providers. In order to protect the public’s funding, laws are in place which prevent nursing homes from collaborating with those third parties entities to bilk the taxpayer.

As you can imagine, facility owners and operators are often willing to violate those rules. One of the most high-profile examples of this in recent memory involves the country’s largest pharmaceutical company working with nursing homes: Omnicare.

According to allegations made in the whistleblower lawsuit, the pharmaceutical company violated federal kickback laws. More specifically, the whistleblower–a pharmacist who worked for the company for 17 years–claims that Omnicare gave steep discounts to certain nursing homes if those facilities referred the company to other patients who needed prescriptions that came with a higher reimbursement rate.

As one of the lawyers in the case summarized in a Charlotte Observer story, “What Omnicare would do some of the time, when it wanted to keep the business of a nursing home, it would say, ‘Well, we’ll give you rock-bottom or below-cost prices on the drugs of your Medicare Part A patients’ … to get the rest of the patients to pay higher.”

Last week a settlement was reached in the case. Without technically admitting guilt, the company agreed to pay $120 million to end the matter. This settlement comes on the heels of a $98 million settlement that the company made in 2009 after allegations were made that it paid nursing home owners kickback in exchange for winning contracts at the home.

If you have information about questionable practices at a nursing home or company that provides services at these facilities, please get in touch with our whistleblower attorneys today.

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