Omnicare Agrees to Settle Whistleblower Suit for $120 Million

Omnicare, Inc., the nation’s largest provider of prescription medications in nursing homes, has agreed to settle a lawsuit brought under the qui tam provisions of the False Claims Act.

Ohio-based Omnicare will pay the federal government $120,000,000 to settle allegations that it offered pricing below fair market value to nursing homes for Medicare Part A inpatients in exchange for the referral to Omnicare of the non-Part A patients at much higher prices. The whistleblower alleged that because Medicare pays a flat fee to nursing homes for Medicare Part-A patients, the below-cost pricing was an illegal kickback in violation of the Medicare Anti-Kickback Statute and the False Claims Act.

The qui tam complaint was filed under seal in 2010 by Donald Gale, a pharmacist for Omnicare from 1993 to 2010, in the Northern District of Ohio. In 2011, the government declined to intervene, and the whistleblower then proceeded with the case on his own.

The settlement is subject to approval by the U.S. Department of Justice. If the settlement is approved, the whistleblower will receive between 25 and 30% of the settlement proceeds as his reward under the qui tam provisions of the False Claims Act.