CVS Subsidiary Found Guilty of Fraud

A little over a month ago, a federal jury found CVS Health long term care pharmacy, Omnicare, guilty on charges of fraud. A few of us have written about abuses by PBM’s, of which CVS is perhaps the largest one. The jury unanimously found that CVS Omnicare was authorizing prescriptions without doctors’ knowledge or authority and fraudulently billed Medicare, Medicaid, and Tricare over three million claims for a grand total of $135.6 million dollars. Under the federal claims act, the federal government is entitled to three times the damage for a grand total of $406,778,442. 

Allow me to explain this in simpler terms. In the long-term care world, this is unlike many of us who go to the pharmacy to pick up medications. A long-term care pharmacy is one who provides medications in bubble packs, salad packs, or baggies, and delivers to retirement homes, assisted living, board and cares, or skilled nursing facilities. As many of us know, when you go to the doctor, often times, you get a prescription. The doctor can choose to add refills, or offer none. The same goes for patients in these facilities. Some doctors can have standing orders for a years’ worth of refills, or they can offer no refills. What Omnicare did, is knowingly bypass the doctors and add refills to fraudulently bill claims and send medications to the patients. 

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Omnicare pharmacist Uri Bassan whistle blew and filed the law suit on behalf of the government and 29 states back in 2015. CVS Omnicare caters to some of the largest assisted living facilities in the country including residents associated with Brookdale Senior living, Atria Senior living, and Oakmont Senior Living. Keep in mind, being that Omnicare is directly associated with this PBM, it paid itself higher reimbursement than it would an independent pharmacy. The lawsuit alleged Omnicare forged prescriptions that affected patients in 1,766 facilities between 2010 and 2018. I can assure you, if this were any private entity or independent pharmacy, someone would end up in jail, along with a fine.

Also in the last month, Gov. Sarah Huckabee signed Arkansas Act 624 which banned PBM’s from operating pharmacies in the state. CVS claimed this would require them to close their 23 stores in the state by 1-1-26, and have now filed suit against the state claiming this law to be unconstitutional. Naturally, CVS will try to have you believe that closing their stores will harm patients, make drugs inaccessible, increase prescription drug costs, and force about 500 people to lose their jobs. Aside from CVS, there are 734 licensed pharmacy operators in Arkansas. With all this news coming out, it seems PBMs days may be limited, which would be a win for patients and independent pharmacies across the board. 

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Michel Albert Daher, Pharm. D, APh, is a community pharmacist who has owned and operated three pharmacies located in California and Oregon. He is currently an adjunct professor in the division of pharmacy practice at Marshall B. Ketchum University, located in Fullerton, CA.