CVS long-term care pharmacy sued by DOJ over fraudulent prescribing practices

https://www.healthcaredive.com/news/cvs-long-term-pharmacy-sued-by-doj-over-fraudulent-prescribing-practices/569268/

Dive Brief:

  • CVS Health and its Omnicare business are being sued by the Department of Justice over alleged fraudulent billing of Medicare and other government programs for outdated prescriptions for elderly and disabled people.
  • The DOJ suit, filed Tuesday in New York, joins whistleblower ligitation accusing Omnicare of billing federal healthcare programs for hundreds of thousands of drugs based on out-of-date prescriptions for individuals in assisted living facilities, group homes, independent living communities and other long-term care facilities between 2010 and 2018. The lawsuit seeks civil penalties and other damages.
  • “We do not believe there is merit to these claims and we intend to vigorously defend the matter in court,” CVS spokesperson Joe Goode told Healthcare Dive. “We are confident that Omnicare’s dispensing practices will be found to be consistent with state requirements and industry-accepted practices.”

Dive Insight:

The suit alleges Omnicare, the nation’s largest long-term care pharmacy, kept dispensing antipsychotics, anticonvulsants, antidepressants and other drugs based off invalid prescriptions for months, and sometimes years, without obtaining fresh scripts from patients’ doctors.

Managers at the long-term care business allegedly ignored prescription refill limitations and expiration dates and forced staff to fill prescriptions quickly, pressuring some facilities to process and dispense thousands of orders daily. When prescriptions expired, Omnicare “rolled over” the scripts, assigning them a new number, allowing the pharmacy to dispense the drug indefinitely without need for doctor involvement.

This practice allowed Omnicare to continually dispenses drugs for seniors and disabled occupants in more than 3,000 residential long-term care facilities, at an ongoing risk to their health, according to DOJ. Many of the prescription drugs were meant to treat serious conditions like dementia, depression or heart disease and have side effects when not closely monitored by a physician — particularly when taken in tandem with other medications.

The pharmacy then submitted knowingly false claims to Medicare, Medicaid and TRICARE, which serves military personnel, for the illegally dispensed drugs over an eight-year period; and lied to the government about the status of the prescriptions. CVS Health senior management was also aware of the scheme, according to DOJ.

“A pharmacy’s fundamental obligation is to ensure that drugs are dispensed only under the supervision of treating doctors who monitor patients’ drug therapies,” Manhattan U.S. Attorney Geoffrey Berman said in a statement. “Omnicare blatantly ignored this obligation in favor drugs out the door as quickly as possible to make more money.”

The government joined the lawsuit originally brought by Uri Bassan, an Albuquerque, New Mexico pharmacist for Omnicare, filed in June 2015. The original whistleblower suit said Omnicare’s compliance department was aware of the “rolling over” process, but did nothing to stop it.

This is by no means the first time the CVS subsidiary, established in 1981 and acquired in 2015 for about $12.7 billion, has been under the federal microscope for fraud.

Omnicare has a history of friction with the DOJ
  • 2006Omnicare pays almost $50 million over improper Medicaid claims

  • 2009Omnicare shells out $98 million to settle kickback allegations

  • 2012Omnicare enters into a $50 million settlement following a DOJ investigation finding its pharmacies dispensed drugs to long-term care facility residents without valid prescriptions

  • Feb. 2014Omnicare pays the government more than $4 million to settle kickback allegations

In the May 16, 2017 suit, the government accused Omnicare of designing an automated label verification system that purposefully inflated profits by submitting claims for generic drugs different than those given to patients. CVS said that all happened before it acquired Omnicare.

​Omnicare provides pharmacy benefits for post-acute care and senior living care, including in skilled nursing facilities, hospitals and health systems and assisted living communities.

Despite the lucrative market in an aging U.S. population with complicated drug needs, Omnicare is an underperforming business in otherwise healthy times for CVS. The unit triggered a $2.2 billion goodwill impairment charge following a late 2018 test, according to CVS’ fourth quarter filing last year.

Omnicare operates 160 pharmacies in 47 states. During the eight years under investigation, Omnicare submitted more than 35 million claims for drugs dispensed to Medicare beneficiaries in assisted living facilities alone, DOJ says.

 

 

 

 

1,250 healthcare deals have been announced, completed this year

https://www.beckershospitalreview.com/hospital-transactions-and-valuation/1-250-healthcare-deals-have-been-announced-completed-this-year.html?origin=cfoe&utm_source=cfoe

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The healthcare industry saw 1,250 deals announced or completed through October of this year, according to Bloomberg Law. 

The healthcare deal volume in 2019 is significantly higher than the same period last year, which had 900 deals announced or closed.

Merger and acquisition activity for long-term care, physician services, health IT and pharmaceutical companies are on pace to exceed the deal volume hit in 2018.

Walgreens is one company that is driving deal activity in the healthcare sector. The retail pharmacy giant recently announced it would close 157 in-store healthcare clinics it operated by the end of the year.

TriHealth announced it would buy seven of the Walgreens clinics in the Cincinnati area, and the deal is likely to be replicated elsewhere, Gary Herschman, a member of law firm Epstein Becker Green, told Bloomberg Law. 

However, the hospital and health system sector will likely end 2019 with fewer deals than in 2018, according to the report.

There were only 12 transactions in the hospital and health system sector in October, according to Nicholas Davis, a senior analyst at healthcare consultancy ECG Management Partners.