Nursing homes settle with Justice Department amid accusations of kickbacks

The owner of three nursing homes in Colorado Springs has reached a $14 million settlement with the U.S. Department of Justice.

SavaSeniorCare, which owns Cedarwood Health Care Center, Colonial Columns Nursing Center and Terrace Gardens Healthcare Center, reached the settlement after it had been accused of soliciting kickback payments from Omnicare, the nation’s largest pharmacy that specializes in dispensing drugs to nursing home patients.

SavaSeniorCare and Mariner Health Care Inc., as well as their principals Leonard Grunstein, Murray Forman and Rubin Schron, agreed to pay the money after the complaint was filed last March.

The complaint accuses the four of conspiring to arrange for Omnicare to pay Mariner and Sava $50 million in exchange for the right to continue providing pharmacy services to the nursing homes.

The complaint also says the group attempted to conceal the money as a payment used to acquire a small Mariner business unit that only had two employees, and that Omnicare paid $40 million before acquiring the Mariner business unit and obtaining new 15-year contracts from Mariner and Sava.

The complaint also says that Grunstein and Forman illegally tied the new contracts to the purchase of the business unit.

The United States will receive $7.84 million from the settlement, while $6.16 million has been allocated to state Medicaid programs.

One Response to Nursing homes settle with Justice Department amid accusations of kickbacks

  1. Drug pushers to the entrapped elderly.

    Janet
    March 3, 2010 at 1:07 pm