Posternak Blankstein & Lund LLP is now Arent Fox. Read the press release

Major Retail and Health Care Company Faces Fraudulent Billing Lawsuit

Network engineer check racks at data center
Headlines that Matter for Companies and Executives in Regulated Industries

DOJ News

Omnicare and CVS Face Fraudulent Billing Lawsuit

On Tuesday, the US Attorney’s Office for the Southern District of New York announced a False Claims Act lawsuit against Omnicare, Inc. and its parent company, CVS Health Corporation. The complaint alleges that Omnicare dispensed hundreds of thousands of prescription drugs based on expired or stale prescriptions, and in turn, sought reimbursement for the drugs from federal healthcare programs.

The scheme allegedly targeted elderly and disabled individuals living in assisted living facilities, group homes, independent living communities, and other non-skilled residential long-term care facilities. The complaint further alleges that Omnicare, the country’s largest provider of pharmacy services to long-term care facilities, failed to obtain new prescriptions from the patients’ doctors after the prescriptions were no longer valid, and in some cases, continued dispensing drugs for months and even years after expiration.

The USAO press release is here.

Medicaid Provider Hit with $10.1 Million Judgment in FCA Lawsuit

The US District Court for the Southern District of Georgia entered a $9.7 million judgment against Miracle Home Care, Inc. and a $400,000 judgment against the company’s owner in connection with a False Claims Act complaint filed in July 2018. The complaint alleged that the Medicaid provider submitted thousands of fraudulent claims for non-emergency transportation and adult day health services and falsified records to cover up the scheme. The judgments were a result of a collaboration between the US Attorney's Office for the Southern District of Georgia, the Georgia Attorney General’s Office, and HHS-OIG.

The USAO press release is here.

Litigation Developments

Rite Aid Secures Dismissal of FCA Suit Alleging Fraudulent Billing Scheme

A Michigan federal judge dismissed a False Claims Act lawsuit brought by a whistleblower against Rite Aid Corp. The whistleblower, who has never been employed by Rite Aid, alleged that the pharmacy chain engaged in a scheme to defraud Medicare Part D, Medicaid, and Tricare programs by offering members of a prescription savings club lower prices than what it charged the federal and state programs. After a five and a half year investigation, the government declined to intervene, and the whistleblower proceeded with the lawsuit.

On Rite Aid’s motion to dismiss, the court held that the public disclosure bar required dismissal of the whistleblower’s claims because the Connecticut Attorney General’s office publicly announced that it was investigating Rite Aid’s prescription savings club program in August 2010 and because the whistleblower did not qualify as an original source.

Rahimi, et al., v. Rite Aid Corp., case number 2:11-cv-11940, in the US District Court for the Eastern District of Michigan.

Contacts

Continue Reading