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Omnicare (NYSE: OCR) Agrees to Pay United States $120 Million to Settle False Claims Act Suit Alleging Kickbacks
Date:10/24/2013

when Medicare Part A services were converted to the "Prospective Payment system," that swapping is prohibited by the Anti-Kickback Statute.  Mr. Gale's complaint alleges that the per diem pricing for hundreds of facilities was substantially below the fair market value of the goods provided, and that this violated the Medicare Anti-Kickback Statute and the False Claims Act. 

Omnicare has settled prior False Claims Act cases both for paying and receiving kickbacks, and since 2006, has operated under Corporate Integrity Agreements with the HHS Office of Inspector General. 

Mr. Gale was the General Manager of one of Omnicare's pharmacies in Wadsworth, Ohio.  His civil complaint was filed under seal in January 2010.  The case was unsealed in 2011, after the U.S. Attorney for the Northern District of Ohio elected not to intervene.  This decision, which occurs in about 85% of False Claims Act cases, cleared the way for Mr. Gale to pursue the case on behalf of the taxpayers.  The case has been vigorously litigated since early 2012.

The False Claims Act, also called "Lincoln's Law," was first signed by President Lincoln in 1863. Amendments to the law in 1986 made it the federal government's primary weapon against fraud and abuse by government contractors. The statute permits a private citizen like Mr. Gale to bring a case in the name of the United States, and to recover a portion of any recovery. If the Justice Department approves the Omnicare settlement, Mr. Gale's share of the proceeds will be 25 to 30% of the federal recovery.

"This settlement stands as a powerful example of how the False Claims Act empowers Americans to help fight fraud on the government and American taxpayers. It shows that ordinary citizens who care about following the law and doing the right thing can make a difference," said Ross
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SOURCE Sanford Heisler LLP
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