Omnicare Settles for $120 Million in Nursing Home Drug Kickback Suit

Omnicare (NYSE:OCR), a nationwide suppliers to nursing homes, has agreed to pay $120 million to settle claims against the company for illegal kickbacks in the form of drug discounts to certain providers. 

The company stated in its quarterly earnings report for the third quarter of 2013 that it will pay $120 million to settle the claims, though it admits to no wrongdoing having to do with the allegations. 

Attorney fees are accounted for in addition to the settlement payment, according to the quarterly filing with the Securities and Exchange Commission. 

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“The agreement in principal with the relator, subject to final governmental approval, does not include any admission of wrongdoing or liability by Omnicare,” the company stated. 

The claims in Gale v. Omnicare allege the company paid kickbacks to some long term care communities that care for Medicare patients, in exchange for the ability to sell drugs to others in the same communities. 

Frederick Morgan, an attorney representing the plaintiff, told Modern Healthcare “the nursing homes went along with the alleged scheme because drugs for Medicare Part A clients are lumped into an overall cost to the Medicare program—meaning discounts from the supplier could turn into profit for the nursing home.”

Additional claims remain outstanding, to be resolved. Omnicare has denied the claims. 

Written by Elizabeth Ecker

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