In the area of false claims and kickbacks when it comes to medical providers and specifically nursing homes, Omnicare, Inc. has been a headline-grabbing name in recent years. The company provides pharmaceuticals as well as “pharmacy consulting services” to nursing homes, and thus is a big player in the nursing home business. Its responsibility through this consultancy is to make sure that facilities provide the right medications for patients. In recent years the company has settled with the government over accusations of false claims as well as kickbacks, all of which are incredibly unlawful activities.
The company was accused of giving kickbacks to nursing homes in the form of discounts to ensure they would retain the nursing homes’ business. This also amounted to false claims since Medicare dollars from the federal government were involved since the facilities would accept this money and then turn around to pay it to Omnicare for its services. The company paid tens of millions in recent settlements with the government over these allegations.
US Complaint Filed
As if one might think this would be enough to stop such activity, the United States government has again brought a fresh complaint in federal court against Omnicare claiming that the company “solicited and received millions of dollars in kickbacks” from a pharmaceutical maker called Abbott Laboratories. In exchange for these kickbacks, Omnicare would buy Abbott’s pharmaceutical medication designed to control patients suffering with dementia, and would steer nursing homes to purchase this drug from Abbott. As is reported, Omnicare is alleged to have exercised significant influence over nursing home doctors in recommending use of this medication. Abbott paid certain “grants” and “educational funding” payments to Omnicare, which the government charges were in reality the masked kickbacks for Omnicare’s recommendation of the Abbott-produced drug. Such kickbacks can invoke issues of false claims where the nursing homes accept federal money through Medicare and Medicaid and then turn around and pay that money to companies like Omnicare and Abbott.
Thus the latter two companies’ acceptance of that money amounts to a false claim since the business was steered through improper and illegal means of kickbacks. And, not to mention, the kickbacks themselves, if proven, are illegal. Kickbacks in this context often serve as the basis of False Claims Act suits by the government because such kickbacks between companies can improperly influence treatment and care decisions for patients that may not be in their best interest, or could be simply unnecessary or even harmful. The nursing homes then make Medicare and Medicaid reimbursement claims for such treatment, or the use of the pertinent dementia drug here, for example, but such claims could be false because they are not legitimate.
The lawsuits were brought thanks to the help of whistleblowers, who brought their own qui tam lawsuits on behalf of the United States. The Justice Department opted to get involved in these suits and consolidated them into a single action. Notably, in addition to Omnicare settlements in recent years, Abbott also entered a global civil and criminal settlement with the U.S. in May 2012 that totaled about $1.5 billion. That case implicated kickbacks and false claims as well.
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