When nursing home operators get their hands caught in the Medicare cookie jar, they may be in for some heavy fines. Whistleblower laws allow citizens to sue companies on behalf of the government for fraudulent use of Federal funds and receive a portion of the lawsuit proceeds. This goes for the pharmaceutical companies that rake in millions of dollars in Medicare prescriptions through nursing homes as well. However, will these lawsuits stop these companies from stealing from the very source they are getting rich from?
Recent Chicago Whistleblower Lawsuit
A drug company and nursing home operator are in the midst of such a lawsuit right now in Chicago. Omnicare Inc., a large pharmaceutical company, and Chicago nursing home operators, Philip and Morris Esformes, are accused of forming a $16 million agreement that would secure Omnicares place as the supplier at the Esformes’s nursing homes. Paperwork filed in late August 2012 showed that Omnicare has agreed to settle on the matter, though the details have not been disclosed.
The whistleblower lawsuit stated that Omnicare bought a pharmaceutical company from the Esformes family in 2004 at $16 million above the actual price in exchange for the contract with the three-dozen nursing homes the family is involved with. The amount of revenue this would generate would most likely pay for the $16 million kickback in very little time. The Esformes family has not yet settled and claims it has done nothing wrong.
Stealing From Medicare
In an economy that has already cut Federally funded agencies like Medicare to the bone, having companies literally stealing the money that feeds our elderly is unconscionable. However, it seems to be happening everywhere you look in the news. The renowned Mayo Clinic recently settled a Whistleblower lawsuit for $1.26 million for billing the government for pathology procedures it never performed. A hospice care facility in Kansas just agreed to pay $6.1 million in June 2012 for a lawsuit stating that they were using Medicare funds to pay for hospice care that was not needed.
Whistleblower programs have the benefit of offering a substantial financial reward to those who are behind the scenes at these companies and can alert the government of the fraud that is being committed. They can save the government and programs like Medicare literally billions of dollars in stolen funds. These fraudulent companies not only have to hide their deceptions from the government but also the employees that are being asked to help them commit the fraud as well.
There are always going to be fat cat companies, especially in the nursing home industry, that think they can get away with stealing from government programs. However, many may decide the price is not worth the risk of being caught. Each Whistleblower case that ends in millions of dollars of fines, well above the revenue they gained, sends a warning to those who still think they can steal tax dollars intended for our elderly.