(Adds details on case, CVS comment, byline)
By Nate Raymond
May 16 CVS Health Corp's Omnicare unit
has agreed to pay $8 million to resolve claims that its
prescription verification system resulted in false claims being
submitted to government healthcare programs.
The settlement, announced on Tuesday by Acting U.S. Attorney
William Fitzpatrick in New Jersey, resolves claims by the
federal government and 28 states arising out of a whistleblower
lawsuit filed under the False Claims Act.
The deal resolved civil claims arising from what the U.S.
government said was Omnicare's submission of false claims for
payment for drugs under the Medicare Part D and Medicaid
programs from 2008 to 2014.
The government said Omnicare, in order to increase profits,
designed an automated label verification system that resulted in
the submission of claims for generic drugs different from those
dispensed to patients.
It also resulted in drugs being dispensed with
patient-specific labels displaying an incorrect product
identifier called a National Drug Code, affecting Omnicare's
ability to conduct recalls, the government said.
"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," Fitzpatrick said in a statement.
CVS in a statement said the false submissions took place
before it acquired Omnicare in 2015. Omnicare neither admitted
nor denied wrongdoing as part of the settlement.
"The company agreed to settle this matter to avoid the
expense and uncertainty of protracted litigation," CVS said.
The lawsuit was filed under the False Claims Act, which
allows whistleblowers to sue companies on the government's
behalf to recover taxpayer money paid out based on fraudulent
If successful, whistleblowers receive a percentage of the
recovery. A government decision to intervene is typically a
major boost to such cases.
In this case, the two former Omnicare pharmacists who filed
the lawsuit, Elizabeth Corsi and Christopher Ezzie, will receive
more than $2 million as their share of the recovery and to
resolve employment claims, Fitzpatrick's office said.
The case is U.S. ex rel Corsi v. Omnicare Inc, U.S. District
Court, District of New Jersey, No. 14-cv-1136.
(Reporting by Nate Raymond in Boston; Editing by Jonathan Oatis
and Richard Chang)