DOJ Joins Fraud Suit Against CVS, Omnicare

The lawsuit alleges that Omnicare billed Medicare and other government-sponsored health plans for hundreds of thousands of invalid prescriptions.

The federal government on Tuesday joined a whistleblower civil lawsuit alleging that Omnicare, Inc. and parent CVS Health Corp. fraudulently billed invalid prescriptions to federal healthcare programs for hundreds of thousands of drugs dispensed to elderly and disabled customers. 

"Omnicare put at risk the health of tens of thousands of elderly and disabled individuals living in assisted living and other residential long-term care facilities by dispensing drugs for months, and sometimes years, without obtaining current, valid prescriptions from doctors," Manhattan U.S. Attorney Geoffrey S. Berman said in a media release.

"A pharmacy’s fundamental obligation is to ensure that drugs are dispensed only under the supervision of treating doctors who monitor patients’ drug therapies," Berman said. "Omnicare blatantly ignored this obligation in favor of pushing drugs out the door as quickly as possible to make more money." 

CVS issued a statement saying: "We do not believe there is merit to these claims and we intend to vigorously defend the matter in court.  We are confident that Omnicare’s dispensing practices will be found to be consistent with state requirements and industry-accepted practices."

The lawsuit, which intervenes in two private False Claims Act whistleblower suits, alleges that, from 2010 through 2018, Omnicare, the nation's largest provider of pharmacy services to long-term care facilities, failed to get new prescriptions from patients' doctors after the old ones had expired or run out of refills.

Instead, Omnicare allegedly assigned a new number to the old prescription and kept on dispensing drugs for months, and sometimes years, after the prescriptions had expired. The company billed Medicare, Medicaid, and TRICARE for these "rollover" prescriptions, DOJ said.  

CVS acquired Omnicare in 2015, and DOJ said the retail pharmacy giant "thereafter assumed an active role in overseeing OMNICARE's operations" that allowed the allegedly fraudulent practices to continue.

"Omnicare repeatedly disregarded prescription refill limitations and expiration dates that would have triggered doctor visits to evaluate whether the drug should be renewed, choosing instead to push drugs out the door as fast as possible based on stale, invalid prescriptions," DOJ said.

"Omnicare managers exerted pressure on overwhelmed pharmacy staff to fill prescriptions quickly so that Omnicare could submit claims and collect payments.  Many pharmacies had to process and dispense thousands of orders each day," the complaint said.

The suit also alleges that in some cases Omnicare would assigned a fake number of authorized refills to a prescription – usually 99 allowable refills for Medicare patients – to allow for continuous refilling.

Senior management at Omnicare and CVS were aware of the scheme, the suit alleges, but they failed to begin to address the problem until after they learned of a DOJ investigation.

The suit quotes an Omnicare compliance officer's internal email, which stated: "An issue that I am running into more and more in multiple states concerns the ability of our systems to allow prescriptions to continue to roll after a year to a new prescription number without any documentation or pharmacist intervention."

In addition to the alleged fraud, the suit claims that Omnicare's alleged illegally dispensing of drugs to the elderly and disabled people living in residential facilities exposed them to a significant risk of harm, in part because assisted living facilities often do not have physicians on staff to monitor drug therapies.   

"Many of the prescription drugs dispensed by Omnicare without valid prescriptions treat serious, chronic conditions, such as dementia, depression, and heart disease," DOJ said. "They include antipsychotics, anticonvulsants, cardiovascular medications, anti-depressants, and other drugs that can have dangerous side effects and need to be closely monitored by doctors, particularly when taken in combination with other drugs by elderly patients."