CLEVELAND (AP) — Omnicare Inc. agreed to pay $124 million to settle two whistleblower lawsuits that alleged the company engaged in a kickback scheme with skilled-nursing facilities across the country, the U.S. Justice Department announced Wednesday.
The company, based in Cincinnati, is the nation's largest provider of drugs and pharmacy services to skilled-nursing facilities. The U.S. Department of Justice issued a statement that said Omnicare gave discounts to some facilities so they would keep the company as their drug provider for elderly Medicare and Medicaid recipients.
Omnicare said in a statement Wednesday that it committed no wrongdoing and settled the case to end litigation.
A settlement agreement said Omnicare paid skilled-nursing facilities with discounted drug prices and "prompt pay discounts," a violation of the federal anti-kickback statute. "Schemes such as this one undermine the health care system and take advantage of elderly nursing home residents," Assistant Attorney General Stuart Delery said in a statement.
Steven Dettelbach, U.S. Attorney for Northern Ohio, said in the statement that nursing homes should be able to choose its suppliers based on the best quality and service instead of improper discounts. Dettelbach's office helped complete the settlement.
The agreement calls for Omnicare to pay the U.S. government $116 million and various states that joint funded Medicaid programs a total of $8.2 million. One of the whistleblowers, who filed suit in New Jersey, will be paid a percentage of what the states receive in the settlement.
The other whistleblower lawsuit was filed in Cleveland in 2010 by a former Omnicare employee. The settlement calls for him to be paid $17 million from the $124 million total.