CVS Omnicare Ordered to Pay $949M in Medicare Fraud Verdict

A federal judge ordered CVS Health’s Omnicare unit to pay $948.8 million in penalties and damages after a whistleblower lawsuit accused the company of submitting over 3.3 million false claims to Medicare, Medicaid, and the military’s Tricare program between 2010 and 2018. The lawsuit, initially filed in 2015 by former Omnicare pharmacist Uri Bassan, alleged the company dispensed drugs to patients in long-term care and assisted living facilities without valid prescriptions. The Department of Justice joined the case in 2019, and a jury ruled in favor of the government, awarding $135.6 million in damages, which was tripled under the False Claims Act and combined with a $542 million penalty. CVS, which acquired Omnicare in 2015, denies the allegations and plans to appeal the ruling, arguing the fine is unconstitutional. Omnicare’s dispensing practices were described by CVS as technical record-keeping issues allowed by law in some states and accepted by federal regulators, with no evidence of patient harm presented. Despite the legal setback, CVS Health maintains a favorable outlook from analysts, with many recommending the stock as an outperformer.