A recent ruling out of New York is the latest notable step in a very long-running saga involving alleged healthcare fraud by Omnicare, a Pharmacy Benefit Manager (PBM) owned by CVS. The companies were ordered to pay about $949 million in a settlement.
The case was initially filed in 2015 (the same year CVS acquired Omnicare) by a whistleblower: an Omnicare pharmacist who worked primarily in New Mexico. The whistleblower filed her suit under the False Claims Act (FCA) and state equivalents. These are laws that allow private individuals to file suit in the name of the U.S. (or states) and allege that healthcare programs like TRICARE, Medicare, or Medicaid are being defrauded. Whistleblowers are eligible to share in 15-30 percent of any ultimate recovery.
The crux of the allegations in this case is that Omnicare dispensed drugs to individuals in various long-term residential facilities that were not supported by valid prescriptions under state law and charged Medicare, Medicaid, and TRICARE for those drugs. The allegations touch patients in more than 3,000 facilities. Allegedly, the prescriptions were automatically assigned new prescription numbers, refills were automatically authorized, and prescriptions were periodically refilled in bulk without confirming that the prescriptions were still medically necessary or authorized by a physician.
CVS, as Omnicare’s parent company, was accused of “causing” the false claims to be submitted, as it was aware of deficiencies in...
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