The Department of Justice announced Wednesday that Omnicare Inc., the nation’s largest nursing home pharmacy company, has agreed to pay $124 million to settle whistleblower allegations of healthcare fraud. The whistleblower lawsuit alleged that the company engaged in a kickback scheme with skilled-nursing facilities all across the country.

The lawsuit accused the Ohio-based company of allegedly offering improper financial incentives, known as kickbacks, to skilled nursing facilities in exchange for their continued selection of Omnicare as the main drug supplier for their elderly Medicare and Medicaid patients.

The settlement resolves allegations that Omnicare submitted false claims by entering into below-cost contracts to supply prescription medication and other pharmaceutical drugs to skilled nursing facilities and their resident patients to induce the facilities to select Omnicare as their pharmacy provider. The facilities were participating providers under agreements with Medicare and Medicaid. In addition to the facilities’ own claims for reimbursement from Medicare for short-term rehabilitation treatment rendered to patients, Omnicare submitted additional claims for reimbursement to Medicare and Medicaid for drugs Omnicare supplied.

The case originated in 2010, when a former Omnicare pharmacy manager, Donald Gale, filed a qui tam whistleblower case against the company. Under the qui tam provision of the False Claims Act, whistleblowers, also known as “relators”, can bring a case on behalf of the federal government, and if the case is successful, can share in any monetary recovery that results from the proceedings. Gale alleged that Omnicare improperly discounted some Medicare drugs for skilled nursing facility clients, and in exchange the nursing facilities continued to refer more lucrative business to Omnicare.

For his part in bringing this case to the attention of the government, Gale will receive more than $17 million as his whistleblower reward from the settlement. $8.24 million will go to the various states which jointly funded the Medicare and Medicaid programs that were affected by Omnicare’s misconduct, while the remaining amount will be paid back to the federal government.

If you have information showing that a healthcare provider has committed fraud on a government healthcare program, such as Medicare, then you may be able to bring your own qui tam lawsuit under the False Claims Act. Through a qui tam lawsuit, you would help the government recover taxpayer money that has been paid as a result of fraudulent claims.