Omnicare - billing the dead costs them $52.5 million

Poor Omnicare.

They will pay about $52.5 million to settle a civil case related to Medicaid fraud allegations in Michigan.

It is the largest Medicaid fraud settlement in state history, Attorney General Mike Cox said.
Specialized Pharmacy Services Inc. is a subsidiary of Omnicare, a Covington, Ky.-based company that provides pharmacy services to long-term care facilities.

Omnicare has operations in 47 states. In August, the company said in a filing with the Securities and Exchange Commission that it would set aside $54 million to deal with issues related to the Michigan probe.

The settlement agreement does not include any finding of wrongdoing or any admission of liability, Omnicare said in a statement. The company said it agreed to voluntarily settle the matter "in order to avoid expensive and time-consuming litigation" and to focus on its health care mission.

Cox and Janet Olszewski, director of the Michigan Department of Community Health, said the settlement was a victory for state taxpayers.

"This settlement sends a message," Cox said. "If you attempt fraud here in the state of Michigan ... the fact you are Fortune 500 company will not protect you."

Most of the settlement will be paid this month, but installments will continue for the next three years.

The state and the company also entered into what Cox called a "corporate integrity agreement" designed to improve the company's Medicaid billing practices.

Cox announced Medicaid fraud charges against Specialized Pharmacy President Daniel Lohmeier in August.

Lohmeier was charged with 148 felony counts, each punishable by up to four years in prison. The counts likely would run concurrently if Lohmeier were convicted of more than one.

The criminal charges still stand, Cox said.

Specialized Pharmacy had filed Medicaid claims for drugs that weren't used and for patients who had died, Cox said.

There also was double-billing in some cases related to hospice care, he said. The investigation began in 2003 and covered a period from 1999 through 2005.

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