Office of the Attorney General
Attorney General Stumbo Announces Settlement from Omnicare, Inc. for Defrauding Kentucky Medicaid Program

Press Release Date:  Wednesday, December 06, 2006  
Contact Information:  Vicki Glass, 502-696-5643 Office  

Attorney General Greg Stumbo announced today that Covington, Kentucky nursing home pharmacy giant Omnicare, Inc. will repay $1,068,287.07 to the Kentucky Medicaid Program as part of a total recovery of $49.5 million to Kentucky and the 42 other states participating in the settlement.

“This is a significant recovery for our Medicaid program,” Attorney General Stumbo said. “As a result of this settlement, Omnicare has been forced to pay damages equal to double the amount that the Kentucky Medicaid program expended.”

Omnicare is headquartered in Covington and is a Fortune 500 company that provides professional pharmacy services to nursing homes and assisted living communities in 47 states, the District of Columbia and Canada.  Using a creative “Therapeutic Interchange Program,” Omnicare tried to avoid drug pricing limits imposed by the federal government by illegally and aggressively switching its Medicaid patients from the form or dosage of a drug that had been prescribed by their doctors to a more expensive form or dosage of the same drug.

For example, when the federal government limited the maximum price that Omnicare could bill Medicaid for the tablet form of ranitidine (generic Zantac), Omnicare simply switched all of its patients from the tablet to the more expensive capsule form of the same drug.  The “switching” was done without any doctors orders changing the original prescriptions or any documentation in the medical records of a medical necessity for the switch.

Patients were also switched from 10 mg and 20 mg of fluoxetine (generic Prozac) capsules to the equivalent tablet and from 15 mg of buspirone (generic Buspar) to 7.5 mg dosages.

“This company put profits above patients,” Stumbo said.  “They switched all of these elderly patients from the drug that had been prescribed by their treating physicians without talking to the doctors or informing the patients.  To make sure this doesn’t happen again, my Medicaid Fraud and Abuse Control Division and the other states involved in the settlement insisted that Omnicare enter into a Corporate Integrity Agreement which prohibits them from switching dosage or strength forms of any medication if the result would be an increase in cost to the Kentucky Medicaid program.”

The Attorney General’s Tip Line for reporting allegations of Medicaid fraud is 1-877-ABUSE-TIP (228-7384.)