At Berger and Montague, we pride ourselves on effective, thorough representation of individual whistleblowers eager to expose fraudulent misconduct against the government. As you may have gathered from previous posts, the U.S. government does not always intervene in every whistleblower case. However, we remain dedicated to our clients and continue to persevere on behalf of our private whistleblowers. Accordingly, we are proud to announce our involvement in the largest whistleblower settlement to date which did not involve the government’s intervention. For our client, pharmacist Donald Gale, we secured a $120 million settlement, of which he is set to receive a percentage of up to 30 percent.
Facts of Gale v. Omnicare
In our trek to bring justice to light, we helped uncover attempts by Cincinnati-based pharmacy services company Omnicare, a company sitting atop the Forbes 400 list. The Company according to the Complaint, offered unlawful kickbacks and participated in an illegal “swapping” scam against Medicare.
In his complaint, qui tam plaintiff Gale alleged a swapping scheme involving Omnicare’s decision to provide nursing home facilities heavily-discounted prescription medications for their inpatients receiving Medicare Part A benefits. Under the provisions of Medicare Part A, nursing homes are provided a flat fee to the facility to cover all prescription drug costs, leaving the facility with the responsibility to find the most economic price.
Under the swapping scheme, Ominicare offered facilities a daily pricing plan for Medicare Part A drugs. The per diem price plan, it is alleged, fell substantially below the fair market value of the drugs, which made Omnicare the prime candidate for fiscally-aware facilities eager to keep Medicare Part A prescription costs to a minimum. In return for Omnicare offering its slashed per diem rates, it induced facilities to refer, or “swap,” their other patients to Omnicare for prescription services, most of who were either self-pay patients or participated in Medicare Part D prescription drug benefits. These patients were then billed the full price for prescription drugs, medical equipment and other pharmacy services.
Under regulations imposed by the Health and Human Services Office of Inspector General, this type of swapping is considered a kickback for nursing home facilities and is prohibited by the False Claims Act’s Anti-Kickback statute.
Plaintiff Gale was employed as a pharmacist and general manager for an Omnicare facility in Ohio from 1993 until 2010. In January, 2010, his whistleblower case was filed under seal until the U.S. Attorney’s Office for the Northern District of Ohio opted not to intervene. At that point, our law firm, as well as other well-respected law firms around the nation, worked together to achieve a $120 million settlement, on the eve of the trial.
The settlement and case resolution is considered pending until the Department of Justice and U.S. District Judge James Gwin signs off on the agreement.
The Whistleblower Plaintiff is the Pivotal Part of the Process
Without Mr. Gale’s willingness to come forward with allegations of violations, Omnicare would most likely continue to bill Medicare for prescription medications. This case also proves that sizable, fair and equitable settlements are possible, even without government intervention. If you have knowledge of possible fraud or kickback schemes with regard to federally-subsidized prescription drugs, contact Berger & Montague today.