Covington-based Omnicare Inc. has entered into settlement agreements valued at more than $21 million with Michigan and Massachusetts. The settlement came in cases involving charges that the firm overcharged the states’ Medicaid programs. The settlement by Omnicare, the nation’s largest provider of pharmaceutical care for the elderly, arose from a whistle-blower lawsuit filed in federal court in Chicago in 2003 by a former Omnicare financial analyst.
Omnicare failed to follow “usual and customary” pricing regulations when charging Medicaid for prescription drugs supplied to residents of skilled nursing facilities in Massachusetts and Michigan. In one instance, the whistleblower complaint alleged that in 2001 Omnicare’s North Shore Pharmacy in Massachusetts was paid by private insurers an average of $27.75 per prescription, while its payments for Medicaid patients averaged $47.15 per prescription – roughly 67% higher.
Under the settlement, Omnicare will pay $9.45 million to Massachusetts and $11.6 million to Michigan. The settlement also requires Omnicare to comply with pricing regulations, which include billing the lowest price the company charges a private third-party customer for the same drug. Vogel, Slade and Goldstein, a Washington D.C. law firm, represented the former financial analyst in this case and did a very good job.
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