I have dealt with Omnicare, and find them lacking in too many ways to count. Anyone else deal with them? Have you heard of this story? (Could have sworn there was a post at one time about it....) http://www.chicagobreakingnews.com/2...home-case.html


Court documents filed this week add new details to a whistle-blower lawsuit alleging that the giant pharmaceutical firm Omnicare Inc. paid kickbacks to one of Illinois' most prominent nursing home families.

The new filing, which contains 164 pages of internal company records and other documents, is intended to bolster pending civil allegations that Omnicare significantly inflated the purchase price it paid in 2004 for a pharmacy company purportedly controlled by Chicago nursing home operators Philip Esformes and his father, Morris Esformes.

Omnicare's $32 million purchase of that company, Total Pharmacy, included roughly $16 million that was a kickback to secure long-term pharmacy contracts with nearly three dozen nursing homes the Esformeses operated or influenced, the lawsuit alleges. Federal anti-kickback laws prohibit pharmacies from paying nursing home owners to induce them to buy that pharmacy's products with Medicaid or Medicare dollars.

The new documents include copies of handwritten notes from a March 2004 meeting at Morris Esformes' Lincolnwood headquarters between Omnicare CEO Joel Gemunder and Morris Esformes to discuss the sale of Total Pharmacy to Omnicare.

The lawsuit alleges that Gemunder offered to pay $15 million for Total Pharmacy if three-year contracts were in place with Esformes-controlled homes, $20 million if there were five-year contracts and $25 million if there were 10-year contracts. In the final sale, Omnicare paid the $25 million and let Total Pharmacy keep $7 million worth of accounts receivable, making the sale worth $32 million, according to the lawsuit.

The new court filing also includes other handwritten notes taken two days after the meeting that allegedly show Morris Esformes agreed to backdate nursing home pharmacy contracts "in order to avoid the appearance of impropriety," according to the lawsuit.

Philip and Morris Esformes, who are listed as part-owners of 28 nursing homes in Illinois and Florida, and allegedly had ties to others in Missouri, declined to comment but denied wrongdoing through their attorneys. They have not been charged with any crime in the sale of Total Pharmacy.

Omnicare -- which supplies medicine to roughly 1.4 million nursing home residents in facilities across the U.S. and enjoys an 85 percent share of this market -- also declined comment but has told the Tribune the allegations are without merit and that the company "intends to vigorously defend itself."

Daniel Purdom, an attorney for Total Pharmacy, said there was no wrongdoing in the sale. Purdom also denied that Morris Esformes was involved in the sale to Omnicare, saying Esformes had no ownership or control of Total Pharmacy.

The lawsuit was brought by two industry insiders: pharmacy executive Maureen Nehls, who served as vice president of pharmacy operations for Total Pharmacy, and former health care dealmaker Adam Resnick, a self-described addicted gambler who recently served a 25-month federal prison sentence for his role in a $10 million check-kiting scheme that led to the collapse of Universal Federal Savings Bank in Chicago's Pilsen community. Resnick was a consultant to Total Pharmacy at the time of the sale.

The Esformeses own some of the best-known and most troubled nursing homes in the Chicago area, including Presidential Pavilion in Chicago and south suburban Burnham Healthcare, and have been the subject of law enforcement investigations in Florida, Missouri and Illinois.

The Tribune in April reported that the Esformeses were embroiled in what prosecutors called a "horrific" patient-brokering scheme in which unsuspecting nursing home residents were shuttled to and from a local psychiatric hospital for unnecessary treatments. The Esformeses have denied wrongdoing in that case and were not charged.

Government authorities in Boston have won settlements in federal court based on Resnick's information about other deals involving Omnicare and separate East Coast nursing home chains.

The False Claims Act allows private citizens to file lawsuits against companies and individuals defrauding the government and recover funds on the government's behalf.

The Omnicare kickback allegations -- first filed under seal in 2007 -- became public in March, when Illinois Attorney General Lisa Madigan followed the U.S. Justice Department's lead and declined to intervene in the case after a three-year investigation.

The government's decision to decline to intervene in a False Claims Act does not mean the case has no merits, experts say, as government authorities often lack the resources to prosecute complex white-collar cases and can intervene at a later date.