Omnicare LLC and its parent company CVS Health Corporation have reached a proposed $440 million settlement with the Department of Justice over serious Medicare and Medicaid fraud allegations.
The settlement resolves allegations that Omnicare dispensed prescription medications to residents of long-term care facilities without valid prescriptions, in violation of federal law.
The proposed figure represents a negotiated reduction from a nearly $949 million False Claims Act judgment that had previously been entered against the company.
Omnicare is seeking to resolve its liability at the reduced $440 million amount through ongoing bankruptcy proceedings, with a final hearing scheduled for August 12, 2026.
The case originated in 2015, when Uri Bassan, a pharmacist-in-charge at an Omnicare location in Albuquerque, New Mexico, filed a qui tam complaint under the False Claims Act.
Bassan alleged that Omnicare was submitting claims to Medicare and Medicaid for drugs dispensed to long-term care patients without the legally required prescriptions in place.
The Department of Justice and the U.S. Attorney’s Office for the Southern District of New York subsequently intervened in Bassan’s case, significantly strengthening the government’s legal position.
Government intervention in a False Claims Act case also locks in a statutory share of any recovery for the original relator who filed the complaint.
Because the government intervened, Bassan is entitled under the False Claims Act to between 15 and 25 percent of the amount ultimately recovered by the government.
The precise dollar figure of Bassan’s award has not yet been determined and remains pending the outcome of the bankruptcy court proceedings.
At the midpoint of that statutory range, Bassan’s share of a $440 million recovery could approach $88 million, making this one of the more significant individual relator awards in the long-term care pharmacy sector.
The underlying fraud theory centres on the principle that billing federal healthcare programs for drugs dispensed without valid prescriptions constitutes a false claim against the government.
This reflects longstanding regulatory requirements designed to ensure that Medicare and Medicaid pay only for medically authorised care provided to vulnerable patients in long-term care settings.
CVS Health Corporation, which trades on the New York Stock Exchange under the ticker CVS, acquired Omnicare in 2015, making it one of the largest pharmacy operators serving nursing homes and assisted living facilities across the United States.