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Atlanta nursing home chains pay $14 million to settle fraud allegations

By Phillips & Cohen LLP

The Justice Department announced that Atlanta-based Mariner Health Care Inc. and SavaSeniorCare Administrative Services LLC will pay the U.S. and several states $14 million to settle fraud allegations brought under the False Claims Act.

The suit, originally brought by whistleblower Adam Resnick, alleged that the defendants solicited kickback payments from Omnicare, the nation?s largest pharmacy specializing in dispensing drugs to nursing home patients. In exchange for a payment of $50 million, Mariner and Sava agreed to continue using Omnicare?s pharmacy services for 15 years.

The parties allegedly tried to cover up the kickback by disguising it as a payment to acquire a small Mariner business unit that had only two employees and was worth far less than $50 million.

Mary Louis Cohen and Tim McCormack of Phillips & Cohen LLP represented Mr.Resnick.

Full post as published by False Claims Act - Qui Tam on March 01, 2010 (boomark / email).