The U.S. Department of Justice filed suit against Omnicare on Tuesday, claiming that the pharmacy services provider fraudulently billed Medicare, Medicaid and Tricare for drugs that were incorrectly dispensed to elderly and disabled patients.
Cincinnati-based Omnicare operates 160 pharmacies across the U.S., specializing in long-term care. Omnicare is a subsidiary of CVS Health, which acquired it in 2015.
Between 2010 and 2018, Tricare allegedly billed for “hundreds of thousands of non-controlled drugs dispensed without valid prescriptions,” according to the complaint, which was filed in the U.S. District Court for the Southern District of New York.
The suit is based on a whistleblower complaint by a former pharmacist and pharmacy technician who previously worked at an Omnicare pharmacy in Salt Lake City. The DOJ alleges that Omnicare violated the False Claims Act by dispensing prescriptions that were expired, out of authorized refills or otherwise invalid.
“Often, even Omnicare’s first dispensation of a drug was based on records that were not valid, legal prescriptions from healthcare providers with prescriptive authority,” the complaint stated.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
Parent company CVS Health denied the allegations.
“We do not believe there is merit to these claims and we intend to vigorously defend the matter in court,” according to a statement emailed by a company spokesman. “We are confident that Omnicare’s dispensing practices will be found to be consistent with state requirements and industry-accepted practices.”
The lawsuit highlighted an alleged practice by Omnicare, where the company would “roll over” prescriptions by simply assigning a new number to an old prescription, instead of obtaining a new prescription. Omnicare “rolled over” prescriptions in at least 1,766 nursing homes and assisted living facilities, according to the lawsuit. On top of that, prescriptions were allegedly rolled over in an additional 1,476 facilities through an automated system.
This practice would have been detrimental to patients, many of whom were in assisted living or long-term care facilities, and had chronic conditions, such as dementia or heart disease. Without approval from a physician, patients might be at risk of drug interactions or other side effects.
“Omnicare jeopardized the health and safety of tens of thousands of people who continued to take the same drugs for months, and sometimes years, without consulting their physician to determine whether that medication was still clinically appropriate,” the complaint stated.
The lawsuit also pointed to an overworked and under-trained workforce as part of the problem. A former pharmacist-in-charge for Omnicare of Wichita reported in the lawsuit that pharmacists were expected to review between 480 and 520 orders during an eight-hour shift. A former dispensing pharmacist in St. Louis said she was required to review between 400 and 600 orders daily.
In addition, Omnicare provided no standardized training or guidance for staff to ensure prescriptions for residential facilities were tracked and renewed in a timely matter, according to the complaint.
This isn’t the first time Omnicare has faced legal action over its dispensing practices. In 2012, the company paid $50 million to settle a DOJ investigation that found Omnicare’s pharmacies had dispensed controlled substances to long-term care residents without valid prescriptions.
This time around, the DOJ is seeking counts for multiple violations of the False Claims Act, payment by mistake of fact and unjust enrichment. For these violations, the Justice Department is seeking treble damages and penalties to the “maximum amount allowed by law.”
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