A federal False Claims Act lawsuit against Omnicare and parent company CVS Health Corp. will proceed after a federal court on Friday denied the long-term care pharmacy service company’s request to dismiss it.
A spokesman for CVS Health told McKnight’s Senior Living that the company does not believe there is merit to the claims and will “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,” he said.
A December 2019 federal civil lawsuit alleged that between 2010 and 2018, Omnicare dispensed prescription drugs to residents at more than 3,000 senior living communities that were “not supported by valid prescriptions” because they had expired, run out of refills or were based on faxed or verbal refill requests from the communities without valid physician signatures.
In her decision Friday, Chief Judge Colleen McMahon of the U.S. District Court for the Southern District of New York stated that “the government has sufficiently alleged that Omnicare’s Medicare reimbursements after Jan. 1, 2013, were the product of false claims.”
The judge also rejected Omnicare’s suggestion that it was “perfectly legal” to dispense drugs paid for by Medicare without a valid prescription before 2013, stating that federal statutes “are more than adequate to put any pharmacy on notice that it was prohibited from submitting claims for reimbursement without valid prescriptions.”
McMahon also dismissed CVS’ motion to dismiss all counts against it, stating that the government’s complaint “more that sufficiently alleges that CVS directly participated in the scheme.”
As McKnight’s Senior Living previously reported, the billings to Medicare, Medicaid and Tricare, according to the federal government, were for antipsychotics, anticonvulsants and antidepressants dispensed to residents at assisted living communities, group homes, independent living communities and other non-skilled residential long-term care facilities in more than 30 states and Washington, D.C.
Instead of obtaining new prescriptions from residents’ physicians, according to the federal government, Omnicare assigned a new number to each old prescription and continued dispensing drugs for months or years after the prescriptions had expired.
According to the original complaint, “Omnicare was put on notice of violations multiple times by internal, state and other third-party audits.” The complaint further states that Omnicare and CVS executives “knew they could not dispense drugs without valid prescriptions, that they knew many of their facilities did so anyways, but that this conduct continued even after they were alerted to the fact.”