Healthcare Business News

Feds step in on whistle-blower case against McKesson

Posted: October 6, 2008 - 5:00 pm ET

The Justice Department has intervened in a whistle-blower lawsuit against McKesson Corp. and nursing-home chain Golden Living alleging the companies engineered a kickback scheme and defrauded Medicare through a sham supplier of durable medical equipment. Both companies said that they had not seen the government’s complaint but said they would fight the allegations.

According to the complaint filed Oct. 3 in U.S. District Court in Oxford, Miss., McKesson’s subsidiary McKesson Medical-Surgical MediNet set up an arrangement that ensured its products would be used at facilities operated by Golden Living, then known as Beverly Enterprises. A DME supplier established as a Golden Living affiliate—Ceres Strategies Medical Services—was in fact managed by MediNet. The arrangement allowed Golden Living to keep millions of dollars in Medicare payments as kickbacks, the government alleges. The whistle-blower lawsuit that triggered the government’s inve stigation was filed under seal in 2004 by Thomas Jamison, identified in the government’s complaint as the owner of Mississippi Medical in Jackson.

McKesson spokesman James Larkin said that the company had not seen the government’s complaint. “However, as disclosed in our public filings since 2005, we have been cooperating in the investigation for several years,” he said in a written statement. “We continue to believe the case is without merit, and we will vigorously defend against it.” Golden Living spokesman Blair Jackson e-mailed a similar statement. “Indeed, the activities that were under investigation improved the quality of care for patients and reduced costs,” Jackson said. -- by Gregg Blesch

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