On October 19, 2016, the United States Attorney for the Eastern District of California announced that CVS subsidiary Omnicare Inc., a national long-term care pharmacy, will pay $2.24 million to resolve federal and state False Claims Act allegations that it improperly billed federal and state health care programs for prescription drugs that were dispensed to patients in skilled nursing and other institutional care facilities.  Specifically, the settlement resolves allegations that Omnicare employees manually altered the National Drug Code (NDC) field on claims resubmitted to Medicare, Medicaid, and TRICARE, in order to overcome prior rejection of these claims for payment.

The settlement resolves claims first brought under the qui tam provisions of the False Claims Act by a former Regional Service Area Director in Omnicare’s pharmacy in Lodi, California.  Under the Act, private citizens with knowledge about fraud against the government can serve as whistleblowers and file a lawsuit on behalf of the United States.  The Act allows the United States to recover up to three times the amount that the defendants fraudulently billed the government as well as monetary penalties for each false claim submitted.  The whistleblower, known as a relator, is entitled to 15-30 percent of the government’s recovery plus their attorney’s fees.  The whistleblower in this case will receive $411,624.

“We are committed to ensuring the integrity of the federal health care system, and this extends to paying only for drugs that accurately reflect an underlying prescription,” said Acting U.S. Attorney Phillip A. Talbert of the Eastern District of California.