Corporate Compliance

Omnicare Inc. to pay $49.5 million for Medicaid prescription drug fraud

Healthcare Auditing Weekly, December 11, 2007

Omnicare, Inc. will pay the government and 43 states $49.5 million to settle a case initiated by two whistleblowers. Omnicare allegedly switched Medicaid patients from a cheaper version of three drugs (generic Zantac, Prozac, and Buspar) in order to increase its reimbursement rate.

Some of the changes were allegedly made by Omnicare:

  • without informing the prescribing doctor of the change in drug form
  • after telling the physician the new version of the drug would be cheaper for the payer
  • after suggesting that the patient would benefit from the new drug

As part of the settlement, Omnicare entered into a five year compliance agreement with the Department of Health and Human Services to prevent drug switches like this in the future.

This case is the first time that a United State's Attorney's office has teamed up with the National Association of Medicaid Fraud Control Units. Inspector General Levinson of HHS said, "We will continue to work closely with Medicaid Fraud Control Units around the country to investigate and prosecute those who engage in schemes to illegally profit from and defraud the Medicaid program at the expense of vulnerable beneficiaries."

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