Federal Lawsuit Claims CVS Health/Omnicare Improperly Refilled Meds Across 3,000-Plus Senior Living Communities

Long-term care pharmacy giant Omnicare and its parent company CVS Health (NYSE: CVS) are defendants in a federal lawsuit alleging that hundreds of thousands of drugs were improperly dispensed to senior housing residents over a period of years.

The complaint, filed Tuesday by the Manhattan U.S. Attorney’s office, and an accompanying press release name-check several of the largest senior living providers in the country.

“Omnicare pharmacies ‘rolled over’ prescriptions for elderly and disabled individuals living in more than 3,000 residential long-term care facilities, including assisted living facilities operated by the largest long-term care providers in the country, such as Brookdale Senior Living, Atria Senior Living, Sunrise Senior Living Services, and Five Star Senior Living,” the press release states.

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No senior living providers are parties to the litigation.

Specifically, the complaint alleges that Omnicare did not properly handle residents’ prescriptions that were expired, out of refills, or invalid for other reasons. Instead, the company “rolled over” those prescriptions. This meant that Omnicare’s computer system would simply assign a new prescription number, or even a fake number of authorized refills, so that pharmacists could keep dispensing those meds and Omnicare could keep getting paid, according to the charges.

“We do not believe there is merit to these claims and we intend to vigorously defend the matter in court,” Omnicare said in a statement e-mailed to Senior Housing News. “We are confident that Omnicare’s dispensing practices will be found to be consistent with state requirements and industry-accepted practices.”

The government’s complaint covers the time period between 2010 and 2018. During those years, Omnicare allowed prescriptions to roll over in at least 1,766 residential facilities, the suit alleges.

“And in at least an additional 1,476 residential facilities, Omnicare ‘rolled over’ prescriptions through its ‘cycle fill’ system, an automated system used to refill large volumes of medications in bulk on a periodic basis,” the complaint states. “Often, even Omnicare’s first dispensation of a drug was based on records that were not valid, legal prescriptions from health care providers with prescriptive authority.”

The government also claims that Omnicare executives knew of these practices and only began to seriously address them when the company came under investigation. The drugs involved allegedly include those used to treat conditions such as dementia and diabetes.

Because assisted living communities and similar residential living settings for seniors do not typically have physicians on staff, residents rely on doctors outside the facilities, the complaint notes.

“By repeatedly dispensing potent drugs without current and valid prescriptions to elderly and disabled individuals living in residential facilities, Omnicare jeopardized the health and safety of tens of thousands of people who continued to take the same drugs for months, and sometimes years, without consulting their physician to determine whether that medication was still clinically appropriate,” the legal complaint states.

Many of these residents are beneficiaries of federal health care programs such as Medicare and Medicaid, so the government claims that Omnicare needs to repay substantial sums of money paid out for inappropriate prescriptions. The U.S. Attorney is requesting a trial to determine the exact amount owed, and is seeking treble damages and civil penalties as allowed under the False Claims Act.

Omnicare has been working to expand its business in assisted living and independent living.

“The growth opportunity with Omnicare was always focused on the independent and assisted living spaces. And those opportunities still exist,” CVS Health CEO Larry Merlo said on an earnings call in February 2019.

In November 2018, CVS Health completed a nearly $70 billion acquisition of insurer Aetna.

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