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Omnicare Agrees To Pay $120 Mln To Settle Kickback Claims - Quick Facts

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10/23/2013 11:03 AM ET

Morgan Verkamp LLC; Calfee, Halter & Griswold LLP; Sanford Heisler LLP; Berger Montague, PC announced Wednesday that Omnicare Inc. (OCR: Quote) agreed to pay the United States $120 Million to resolve kickback and false-claims allegations brought by Donald Gale, an Ohio pharmacist who worked for the company from 1993 until 2010.

The agreement between Gale and Omnicare, which was announced in open court in Cleveland on Tuesday, will not be final until it is approved by the Civil Division of the United States Department of Justice, avoids a jury trial scheduled for Monday, October 28.

Gale's complaint alleged a kickback scheme called "swapping," asserting that Omnicare paid nursing home owners kickbacks in the form of heavily-discounted prescription drugs for Medicare Part A inpatients. The nursing homes are financially responsible for Part A patients' medical because Medicare pays a flat fee to the facility. Omnicare offered the nursing homes daily, or "per diem," pricing.

Gale's Complaint alleged that the per diem pricing for hundreds of facilities was substantially below the fair market value of the goods provided, and that this violated the Medicare Anti-Kickback Statute and the False Claims Act because Omnicare gave the discounts intending that the nursing homes would refer, or "swap," their non-Part A patients, most of whom participate in the Medicare Part D prescription-drug benefit program, to Omnicare. Omnicare then charged full price for their prescription drugs and other pharmacy services.

Gale is represented by Rick Morgan, Jennifer Verkamp, and Sara Vann of Morgan Verkamp LLC; Virginia Davidson and Eric Zell of Calfee Halter & Griswold LLP; Ross Brooks of Sanford Heisler LLP; and Daniel Miller and Shauna Itri of Berger Montague.

Gale was the General Manager of an Omnicare pharmacy in Wadsworth, Ohio. His civil complaint was filed under seal in January 2010.

Separately, Omnicare disclosed in a regulatory filing on Thursday that On October 22, 2013 it reached an agreement in principle with the Relator, without admitting liability, to settle the Gale litigation and certain claims in the Silver litigation. It recorded a settlement charge of $120 million plus attorneys' fees in the three and nine months ended September 30, 2013.

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by RTT Staff Writer

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