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AG Kilmartin Recovers $172,513 for State's Medicaid Budget from Settlement with Omnicare

Attorney General Peter F. Kilmartin today announced that Rhode Island will receive $172,513 for the State's Medicaid budget from a $16.48 million federal and state settlement with Ohio-based Omnicare Inc.

The agreement settle allegations that Omnicare Inc., the nation's largest provider of pharmaceuticals and pharmacy services to nursing homes, allegedly offered improper financial incentives to skilled nursing facilities in return for their continued selection of Omnicare to supply drugs to Medicaid recipients.

The settlement resolves further allegations that Omnicare entered into below-cost contracts to supply prescription medication and other pharmaceutical drugs to skilled nursing facilities and their resident patients to induce the facilities to select Omnicare as their pharmacy provider for nursing home residents covered by Rhode Island's Medicaid program. The government alleges that this conduct violated the Federal Anti-Kickback Statute and resulted in the submission of false claims to the Rhode Island Medicaid program. As part of the settlement, Rhode Island will receive $172,513 in restitution and other recoveries.

"Companies that engage in illegal behavior to line their pockets at the expense of patients and taxpayers will not be tolerated. As Medicaid is one of the largest items in our state budget, every dollar of fraud and abuse we can recover adds to the financial health of a vital safety net program," said Attorney General Kilmartin.

The Anti-Kickback Statute prohibits offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid and other federally funded programs. The Anti-Kickback Statute is intended to ensure that the selection of health care providers and suppliers is not compromised by improper financial incentives and is instead based on the best interests of the patient.

The settlement resulted from a whistleblower lawsuit originally filed in the United States District Court for the District of New Jersey. A National Association of Medicaid Fraud Control Units team participated in the settlement negotiations with Omnicare on behalf of the states.

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