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Around the nation: CVS' Omnicare pharmacy to settle false claims case


CVS and its long-term care pharmacy Omnicare have reached a $440 million settlement agreement with the Department of Justice (DOJ) in a case involving false prescription drug claims, in today's bite-sized hospital and health industry news from Illinois, Rhode Island, and Texas.  

  • Illinois: The American Hospital Association (AHA) has named Laura Kaiser as its chair-elect designate, the top elected position in the organization. She will serve as chair-elect in 2027 before becoming AHA chair in 2028. Kaiser is currently president and CEO of SSM Health, positions she has held since 2017. Before joining SSM Health, Kaiser was EVP and COO of Intermountain Health and held several senior leadership positions at Ascension Health. "I look forward to the opportunity to serve, continuing to advocate for America's hospitals and health systems to advance solutions that work for everyone. The AHA's vision of a society of healthy communities, where every person has the potential to live a healthy life, is one I have pursued throughout my career," Kaiser said. "Our patients and communities demand and deserve our very best, and we must move with purposeful urgency to deliver it. That means protecting and strengthening the 24/7 care hospitals provide today, while reimagining how we build and support a healthier, resilient future for our patients and the communities we serve." (Gooch, Becker's Hospital Review, 7/13; AHA news release, 7/12)
  • Rhode Island: CVS and its long-term care pharmacy Omnicare have reached a $440 million settlement agreement with DOJ in a case involving false prescription drug claims. According to DOJ, Omnicare's pharmacies sent medications to people in residential facilities based on "stale, invalid prescriptions" and fraudulently billed Medicaid and Medicare for drugs dispensed without a valid prescription between 2010 and 2018. The case resulted in a federal judge ordering Omnicare to pay $948.8 million in penalties and damages after finding the company liable for filing fraudulent claims. However, Omnicare filed for Chapter 11 bankruptcy a few months later due to significant debt. In March, DOJ filed a claim in Omnicare's bankruptcy case over the false claims judgment. Earlier this month, DOJ, CVS, and Omnicare reached a deal for a $440 million settlement to resolve the false claims case. Currently, a hearing on the Omnicare settlement is scheduled for Aug. 12. If approved, CVS would be required to pay DOJ $130 million within two weeks of the deal being finalized, with the remaining $310 million due by March 2028. "The agreements are not an admission of liability or wrongdoing, and were agreed upon to avoid the time and expense of further litigation," a CVS spokesperson said. "We're pleased to put this matter behind us as part of a successful conclusion of the Omnicare Chapter 11 case." (Casolo, Becker's Hospital Review, 7/8; Olsen, Healthcare Dive, 7/10)
  • Texas: Memorial Hermann Health System is planning to wind down and ultimately end its commercial health plans after receiving regulatory approval for the decision. The closure will only impact the organization's commercial group products, not its Medicare Advantage plan. Coverage will remain in place for each employer group's applicable termination date. Groups that have plans scheduled for renewal before Dec. 1, 2026, will have the option to renew for an additional coverage year, which means some policies could remain active through late 2027. According to Memorial Hermann, the decision to shut down its commercial health plans was made due to sustained challenges in the health insurance industry. "It has become clear it will be difficult for the MH Commercial Health Plans to achieve the scale required to sustainably provide value for enrollees," the organization said. Other health systems have also recently narrowed their coverage businesses, including Presbyterian Healthcare Services and Providence. (Bender, Healthcare Finance News, 7/13)

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