Charges that Omnicare disguised nursing home kickbacks as charitable contributions can proceed, federal judge rules

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A whistleblower can keep pursuing his allegations that long-term care pharmacy Omnicare funneled payments to nursing home owners through so-called charitable donations, U.S. District Court Judge Robert M. Dow Jr. recently ruled. Dow dismissed other charges leveled in the suit.

Alan J. Litwiller, described in court papers as an Omnicare employee, filed the False Claims Act lawsuit in 2011. Among various charges, he said that a top Omnicare executive in Illinois directed the company's nonprofit arm — the Omnicare Foundation — to make “indirect payments” to owners of client nursing homes, disguised as charitable contributions.

Dow allowed this charge to stand, as well as allegations that Omnicare gave illegal discounts and refunds to long-term care providers. However, the judge dismissed other charges, saying that a separate suit filed by whistleblower Susan Ruscher already had accused the pharmacy of these infractions — namely, purposely failing to collect on certain bills to induce nursing homes to keep purchasing more “lucrative” medications. The judge invoked the “first-to-file” rule, which prohibits “secondary suits” that piggyback on existing whistleblower accusations.

Dow dismissed other charges related to improper discounts due to a “public disclosure bar.” The government had issued a public subpoena for documents related to the discounts in question prior to Litwiller's suit, disqualifying him from bringing these charges, Dow wrote.

In addition to seeking dismissal of Litwiller's claims, Omnicare has denied the allegations in the Ruscher case. Omnicare had not responded to a call from McKnight's as of press time.

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