North Carolina Department of Justice
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Nursing home chain pays $14 million for taking kickbacks

Release date: 10/25/2011

Company took millions of dollars from drug maker, AG Cooper says

Raleigh:  A chain of nursing homes that allegedly took kickbacks from a drug company has agreed to pay North Carolina nearly $900,000 as part of a national settlement worth $14 million, Attorney General Roy Cooper announced Monday.
“We’re working to keep medical costs down and save taxpayers’ money by aggressively going after fraud by health care providers and drug companies,” said Cooper, who oversees a special state unit that fights health care fraud and patient abuse.
North Carolina joined the federal government and other states to reach an agreement with Mariner Health Care, Inc. to resolve allegations that the nursing home chain accepted kickbacks from pharmaceutical company Omnicare, Inc. Cooper alleges that Omnicare paid millions of dollars to Mariner, and in exchange the nursing home company directed its patients to Omnicare for their prescription drug purchases.   
Mariner will pay the states and the federal government $14 million in civil damages and penalties, including $897,808.03 to North Carolina for state and federal Medicaid efforts. Mariner will also face extra scrutiny by the Inspector General of the U.S. Department of Health and Human Services.
The Attorney General’s Medicaid Investigations Unit (MIU) and the state Division of Medical Assistance helped reach the settlement for North Carolina.
North Carolina’s MIU has recouped more than $400 million over the past decade and helped to convict more than 450 individuals on criminal charges including patient abuse and neglect as well as financial fraud.  
Other Medicaid fraud settlements won recently on behalf of North Carolina taxpayers:
  • Ameritox paid $250,067.89 to North Carolina to resolve allegations that the drug testing company paid money and/or provided other kickbacks to induce health care practitioners to refer their patients to Ameritox. The payment to North Carolina is part of a $16.3 million national agreement.

  • Novo Nordisk paid$259,897.42 to North Carolina to resolve allegations that the company improperly marketing the drug NovoSeven Coagulation Factor VIIa for uses not approved by the U.S. Food and Drug Administration (FDA). NovoSeven is FDA approved to treat specific bleeding disorders for persons with hemophilia. However, it was alleged that Novo Nordisk knowingly promoted the drug to control bleeding in a variety of other patients for whom the drug had not been approved.   Funds won by North Carolina are part of $7.5 million settlement paid to several states and the federal government.
  • UCB paid$788,651.05 to North Carolina to settle charges that it knowingly caused the filing of false Medicaid claims for unapproved uses of the drug Keppra. Keppra was approved by the FDA to treat epilepsy but an investigation revealed that UCB promoted the sale and use of Keppra for many uses not approved by the FDA, such as headaches, migraines, pain, mood disorders and anxiety. These unapproved uses were not eligible for reimbursement by state Medicaid programs. North Carolina’s settlement is part of $25.7 million paid to Federal and state health programs nationwide. 
In addition to recouping funds for health care, Medicaid fraud settlements include civil penalties paid to North Carolina public schools under to state law. The settlements with Mariner, Ameritox, Novo Nordisk, and UCB generated more than $376,000 for public schools.
The Attorney General’s MIU investigates fraud and abuse of Medicaid benefits by hospitals, doctors, pharmaceutical companies, medical equipment companies, mental health and personal care providers, ambulance services and others. The MIU also investigates patient abuse and neglect in nursing homes and other Medicaid-funded facilities. The unit includes attorneys, investigators and State Bureau of Investigation agents who work closely with United States Attorneys, District Attorneys, and other state and federal law enforcement agencies.

“Medicaid fraud wastes money, deprives deserving people of needed care, and inflates health costs for all of us,” Cooper said. “We’ll keep up our crackdown to protect patients and taxpayers.”

  Contact:  Noelle Talley, (919) 716-6413