In an effort to settle a longtime civil lawsuit brought by a former employee, Omnicare (NYSE:OCR) has agreed to make a payment of $120 million, plus attorney's fees, to the U.S. and Medicaid Participating States, lawyers for the complainant announced today. Omnicare alluded to the settlement payment in today's Form 8-K SEC filing, and the payment was included in its fiscal Q3 2013 earnings results.
The settlement payment does not include "any admission of wrongdoing or liability," according to Omnicare.
The lawsuit in question involved former Omnicare employee Donald Gale, and was one of many civil suits brought against Omnicare alleging multiple instances of Medicare and Medicaid fraud and violating U.S. anti-kickback laws.
One of the more egregious alleged violations against Omnicare was that it submitted multiple, fraudulent drug reimbursement claims to Medicare and Medicaid from 2004 to 2006, which arose as a result of a $50 million payment made to a nursing home chain, in exchange for referrals for patients' drug purchases. The referrals were part of a 15-year contract Omnicare made with the nursing facility operators, the suit claimed. That would be a violation of federal kick-back laws, according to the attorneys who tried the case.
The Associated Press reports the federal government stands to get about $84 million of the settlement, with the former Omnicare pharmacist who filed the whistleblower case in federal court in Ohio set to get up to $36 million.
Omnicare said in a statement Wednesday that the company agreed to settle "to avoid continued litigation and focus on its mission of helping to ensure the health of seniors and other patient populations in a cost-effective manner."
-- Material from The Associated Press was used in this report.
Fool contributor Tim Brugger has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.