A Qui Tam is the “false claims act” or “king’s suit” against anyone stealing from the kind (state or federal government).
More details surface in nursing home case
David Jackson and Gary Marx, Tribune reporters
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.
Ken Ditkowsky
On Friday, December 11, 2020, 10:47:29 PM CST, Key Phillip-s <phillipskey@yahoo.com> wrote:
Omnicare provides drugs to my mother at the Sunrise facility in Issaquah, WA. I have in fact questioned a number of times the number and quantity of drugs my mother is given day after day. When we were visiting her earlier this year in WA we questioned what medications she was being given. Sheila was tracked down and verbally assaulted for inquiring what the drugs were that my mother was being given in the middle of day. After my father passed, my mother was denied the right to attend his funeral and instead of being provided grief counseling was loaded up even more on drugs. I formally objected and got the meds reduced.
It appears Omnicare was involved in the ongoing “drugging” of the grandmas in Sunrise facilities. I would like to pursue. It appears that Ohana has been paying Omnicare for a number of questionable drugs.
If you find anything more about Omnicare and additional information about their “activities” including specific assisted living facilities also involved please advise.
And if you can just send the actual Omnicare/CVS article I would appreciate it.
This is also pertinent in that it appears that this investigation was conducted by HHS while another part of HHS is defending their denial of our elderly the protections of the HIPPA laws. If you recall I had challenged HHS regarding Ohana and Northwest Geriactrics refusal to provide medical information despite mom signing HIPPA forms that provided my access to her medical information. If families are blocked from receiving medical information this type of fraud goes unchecked–we simply don’t know it is occurring. When we ask we are chastised for “interfering”
I would like to restate my objections to HHS and push the matter higher up the chain of command within HHS.
As we all know, gaining control of medical information allows these b…..ds to take over our families lives. Take the HIPPA tool away and I suspect much of the abuse would at least be more difficult.
Thank you for distributing this kind of information. We never know when information like this has value.
Key Phillips
On Friday, December 11, 2020, 08:55:13 PM MST, kenneth ditkowsky <kenditkowsky@yahoo.com> wrote:
Omnicare and the Esformes group have been accused before of Pharmaceutical Frauds. The Company is now owned by CVS Health – and it makes a ton of money. I ran across the following article quite by accident, to wit:
DEC 27, 2019
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MaryGSykes.com 
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