Feds Launch Whistleblower Suit in Nursing Home Kickback Case
The U.S. Department of Justice has intervened in two whistleblower cases filed against Omnicare Inc. The government claims Omnicare accepted kickbacks from a major pharmaceutical company, Abbott Laboratories. They believe that Abbott paid Omnicare in the hopes promoting increased usage of an anti-epileptic drug among nursing home patients.
Former employees Thomas Spetter and Meredith McCoyd filed the original whistleblower complaints
Spetter began working at Abbott in 1994. During 12 years there, he rose from a medical nutritional sales representative to a territory manager for the drug Depakote. In 2010 he filed a whistleblower complaint under the False Claims Act against Abbott. McCoyd was also a sales rep for Abbott and also having worked there for 12 years. Her complaint was filed in 2007. Last month, the government intervened in both cases.
According to the new complaint filed by the Justice Department, Omnicare is the largest provider of pharmaceuticals to nursing homes in the United States. The government contends that Omnicare accepted millions of dollars of kickbacks from Abbott.
Soliciting or accepting kickbacks is illegal and violates Medicare regulations. The anti-kickback rules are designed to protect vulnerable nursing home residents and insure they don’t receive unnecessary medications.
The government claims that Abbott paid kickbacks to Omnicare in exchange for Omnicare recommending that physicians prescribe Depakote for certain dementia patients with behavioral problems. Available literature on Depakote suggests it has very serious side effects.
In announcing their intervention in the two pending whistleblower suits, the Justice Department said in a prepared statement, “Elderly nursing home residents suffering from dementia are among our nation’s most vulnerable patient populations, and they depend on the independent judgment of healthcare professionals for their daily care. Kickbacks to consulting pharmacists compromise their independence and undermine their role in protecting nursing home residents from the use of unnecessary drugs.”
The statement also accused both Abbott and Omnicare of an illegal “raid the coffers of Medicaid, Medicare, and other healthcare benefit programs.”
To hide the fraud, Omnicare disguised the kickbacks it was receiving, calling the payments “grants” and “educational funding.”
Abbott previously settled allegations with the government regarding the kickbacks to Omnicare and others. In 2012, Abbott paid the government $1.5 billion.
As noted above, the two cases were originally brought by whistleblowers. The federal False Claims Act allows a whistleblower to file a law suit in the name of the government and keep a portion of any settlement monies. Although the court can award up to 30% of whatever is collected, the more common percentage in high dollar cases is closer to 15%. In the case of Abbott, that means a potential whistleblower award of $225 million. Not a bad payday!
Since January 2009, the Justice Department has recovered a total of more than $23.2 billion through False Claims Act cases, with more than $14.9 billion of that amount recovered in cases involving Medicare fraud.
Pharmaceutical cases have some of the largest whistleblower award payments. To qualify for an award, the would-be whistleblower must have original source (inside) knowledge of a fraud involving a government program. Since Medicare is a federal program, Medicare fraud qualifies for awards. 28 states have similar laws for Medicaid fraud.
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Think you have what it takes to become a successful whistleblower? Give us a call. We protect whistleblowers from retaliation and help them claim the maximum awards possible. For more information, contact attorney Brian Mahany at or by telephone at (414) 704-6731 (direct). All inquiries protected by the attorney – client privilege.
*We also invite you to visit our Stark Law – Anti Kickback Whistleblower page.
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