PROVIDENCE – A federal judge has ordered CVS Health Corp.’s Omnicare Inc. unit to pay $949 million as part of a whistleblower lawsuit claiming it fraudulently billed the U.S. government for invalid drug prescriptions, Reuters reported late Tuesday.
U.S. District Judge Colleen McMahon in Manhattan, N.Y., imposed a $542 million penalty for filing more than 3.3 million false claims between 2010 and 2018. She also awarded $406 million in damages, representing three times the $135.6 million that a jury awarded on April 29, according to the report.
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The tripling was required under the federal False Claims Act, which lets whistleblowers sue on behalf of the federal government and share in recoveries, according to the report.
Former Omnicare pharmacist Uri Bassan of Albuquerque, N.M., filed the whistleblower lawsuit in 2015. The federal government joined the legal action in 2019.
Both accused Omnicare of improperly billing Medicare, Medicaid and Tricare prescriptions for patients in assisted-living facilities, group homes for people with special needs and other long-term care facilities.
According to the report, when the prescriptions expired or refills ran out, Omnicare allegedly assigned new prescription numbers without the needed paperwork and pharmacist approvals.
In her ruling, McMahon rejected CVS’ argument that a $949 million award violated the Eighth Amendment, which prohibits excessive fines.
“This was a very big fraud on the government, one that lasted over almost a decade, and one that Omnicare was aware of but avoided taking steps to correct,” McMahon wrote in her ruling, according to the report.
McMahon also found CVS jointly liable for $164.8 million of the penalties, after jurors found it failed to stop Omnicare from submitting 30% of the false claims after buying that company in 2015. CVS itself did not submit any claims.
In statement to Reuters Tuesday, CVS said it plans to appeal the ruling.
“This lawsuit centered on a highly technical prescription dispensing recordkeeping issue that was allowed by law in many states,” CVS said in its statement to Reuters. “There was no claim in this case that any patient paid for a medication they shouldn’t have or that any patient was harmed.”
