Atlanta-based Mariner Health Care and SavaSeniorCare Administrative Services and their principals, Leonard Grunstein, Murray Forman and Rubin Schron, have agreed to pay the United States and several states $14 million to settle allegations that the defendants solicited kickback payments from Omnicare, the nation's largest pharmacy that specializes in dispensing drugs to nursing home patients, in exchange for agreements by Mariner and Sava to continue using Omnicare's pharmacy services for 15 years, according to a news release by the Department of Justice.
In a complaint filed in March 2009 and unsealed in Nov. 2009, the United States alleged that Omnicare, Mariner, Sava, Mr. Grunstein, Mr. Forman and Mr. Schron conspired to arrange for Omnicare to pay Mariner and Sava $50 million in exchange for the right to continue providing pharmacy services to the nursing homes, which together constituted one of Omnicare's largest customers. The parties allegedly attempted to disguise the $50 million kickback as a payment to acquire a small Mariner business unit that had only two employees and was worth far less than $50 million.
According to the complaint, Omnicare paid $40 million of this amount prior to actually acquiring the Mariner business unit. At the same time, Omnicare obtained new 15-year pharmacy contracts from Mariner and from Sava, a new nursing home chain that Mr. Grunstein and Mr. Forman created from the Mariner chain. The complaint alleged that Mr. Grunstein and Mr. Forman illegally tied the new pharmacy contracts to Omnicare's agreement to purchase the small Mariner business unit, and that the total $50 million purchase price for the business unit actually was a kickback by Omnicare to keep the future business of Mariner and Sava.
The government's complaint further alleged that, in 2006, after the government issued subpoenas concerning the transaction, the individual defendants created backdated documents in a further attempt to hide the kickback.
Approximately $7.84 million of the settlement proceeds will go to the United States, while $6.16 million has been allocated to certain state Medicaid programs. As part of the settlement, Mariner has also entered into a corporate integrity agreement with the Office of Inspector General of the Department of Health and Human Services.
Read the Department of Justice's release on the Mariner Health and SavaSeniorCare settlement.
In a complaint filed in March 2009 and unsealed in Nov. 2009, the United States alleged that Omnicare, Mariner, Sava, Mr. Grunstein, Mr. Forman and Mr. Schron conspired to arrange for Omnicare to pay Mariner and Sava $50 million in exchange for the right to continue providing pharmacy services to the nursing homes, which together constituted one of Omnicare's largest customers. The parties allegedly attempted to disguise the $50 million kickback as a payment to acquire a small Mariner business unit that had only two employees and was worth far less than $50 million.
According to the complaint, Omnicare paid $40 million of this amount prior to actually acquiring the Mariner business unit. At the same time, Omnicare obtained new 15-year pharmacy contracts from Mariner and from Sava, a new nursing home chain that Mr. Grunstein and Mr. Forman created from the Mariner chain. The complaint alleged that Mr. Grunstein and Mr. Forman illegally tied the new pharmacy contracts to Omnicare's agreement to purchase the small Mariner business unit, and that the total $50 million purchase price for the business unit actually was a kickback by Omnicare to keep the future business of Mariner and Sava.
The government's complaint further alleged that, in 2006, after the government issued subpoenas concerning the transaction, the individual defendants created backdated documents in a further attempt to hide the kickback.
Approximately $7.84 million of the settlement proceeds will go to the United States, while $6.16 million has been allocated to certain state Medicaid programs. As part of the settlement, Mariner has also entered into a corporate integrity agreement with the Office of Inspector General of the Department of Health and Human Services.
Read the Department of Justice's release on the Mariner Health and SavaSeniorCare settlement.