Member Login

Omnicare to Pay $348,000 to Kentucky in Medicaid Kick-Back Case

Kentucky Attorney General Jack Conway and his Medicaid Fraud and Abuse Control Unit announced Friday that Kentucky has joined with other states and the federal government in a $16.48 million settlement with Omnicare Inc., the nation’s largest provider of pharmaceuticals and pharmacy services to nursing homes. 

The settlement resolves allegations that Omnicare offered improper financial incentives to skilled nursing facilities in return for their continued selection of Omnicare to supply drugs to Medicaid recipients.  Kentucky’s total share of the settlement is $348,975.84.  The federal government will receive $240,130.55 for its share of Kentucky-related damages.

Omnicare was previously based in Covington before moving across the Ohio River to Cincinnati two years ago.

According to the settlement agreement, Omnicare entered into below-cost contracts to supply prescription medication and other pharmaceutical drugs to skilled nursing facilities and their resident patients to persuade the facilities to select Omnicare as their pharmacy provider for nursing home residents covered by Kentucky’s Medicaid program.  The government alleges that this conduct violated the federal Anti-Kickback Statute and resulted in the submission of false claims to the Kentucky Medicaid program. 

“Pharmaceutical companies that attempt to cheat our state Medicaid program will be caught and held accountable,” Conway said.  “My office will not relent in our efforts to protect Kentucky taxpayers and our vital state programs from the sort of misconduct alleged in this case.”

The Anti-Kickback Statute prohibits offering, paying, soliciting or receiving payment to induce referrals of items or services covered by Medicare, Medicaid and other federally funded programs.  The Anti-Kickback Statute is intended to ensure that the selection of health care providers and suppliers is not compromised by improper financial incentives and is instead based on the best interests of the patient.

The settlement resulted from a whistleblower lawsuit originally filed in the United States District Court for the District of New Jersey.