CVS hit with $949M judgment over fraudulent Omnicare prescriptions
A federal court ordered Omnicare, a subsidiary of CVS Health, to pay $949 million to resolve a lawsuit brought by a whistleblower that accused the company of fraudulently billing Medicare and Medicaid for unnecessary prescription drugs.
In her ruling, U.S. District Judge Colleen McMahon from Manhattan ordered Omnicare to pay $542 million in restitution, stemming from over 3.3 million false claims, all submitted to health plans between 2010 and 2018.
The remaining $407 million is a penalty. Per the terms of the False Claims Act, lawsuits stemming from fraud result in the tripling of awarded damages. A jury found Omnicare was liable for a $136 million penalty back in April, when the case resolved in a guilty verdict.
The initial legal complaint was filed by a former pharmacist at Omnicare, Uri Bassan, in 2015. The U.S. Department of Justice joined the lawsuit in 2019 to move the case forward.
CVS plans to appeal judgment
CVS purchased Omnicare in 2015, prior to much of the fraud taking place. The company said it plans to appeal the jury ruling and subsequent fines imposed by the court. According to the pharmacy chain, the lawsuit stems from a “highly technical prescription dispensing recordkeeping issue,” asserting that no patient paid for an illegitimate medication.
According to court documents, Omnicare’s fraud extended to both nursing homes and military personnel, involving tens of thousands of patients. The company would allegedly instruct pharmacists to refill expired prescriptions, using deceptive billing practices such as assigning new identifying numbers to cover its tracks.
A jury found that CVS-owned Omnicare was responsible for around 30% of the illegitimate reimbursement claims, totaling $164.8 million. The company contends that the penalty exceeds limits under the law, and violates the Eighth Amendment of the U.S. Constitution.
It’s unclear whether the pharmacy’s appeal will succeed in a higher court. However, McMahon declined a request for a new trial.
The case was tried in a U.S. District Court representing New York. Bassan worked for Omnicare in New Mexico.
Chad is an award-winning writer and editor with over 15 years of experience working in media. He has a decade-long professional background in healthcare, working as a writer and in public relations.