A lawsuit filed under the False Claims Act by a whistleblower who accused CVS subsidiary Omnicare of cheating Medicare and Medicaid through its prescription verification system has been resolved with an $8 million settlement, New Jersey U.S. Attorney William Fitzpatrick announced.
The deal resolved civil claims that Omnicare, in an effort to increase business efficiency and profit, designed and implemented an automated label verification system that used improper drug codes, resulting in the submission of claims for generic drugs differently from those actually dispensed to Medicare and Medicaid beneficiaries.
The whistleblower complaint also alleged that the false, patient-specific information on the labels affected Omnicare’s ability to properly track and conduct recalls of such drugs.
“Ensuring accuracy in the dispensing of and billing for medication in the Medicare Part D and Medicaid Programs, especially to long-term care patients, is vital to public safety,” Acting U.S. Attorney Fitzpatrick said.
Plaintiffs Elizabeth Corsi and Christopher Ezzie filed the complaint under the whistleblower provisions of the False Claims Act in a New Jersey federal court. The U.S. government investigated their allegations and opted to intervene in the case.
Whistleblowers whose False Claims Act lawsuits result in a recovery of federal funds for the U.S. are awarded up to 25 percent of the total recovery – up to 30 percent if the government does not intervene. The U.S. Justice Department said that Ms. Corsi and Mr. Ezzie will share an award of more than $2 million for their role in exposing the scheme.
According to Business Insider, CVS said in a statement the false claims occurred before it acquired Omnicare. The company neither admitted nor denied wrongdoing as part of the settlement.