Cardinal Health Settles Whistleblower Lawsuit

By Matt O'Donnell

(LEGAFI) -- The Department of Justice announced last week that Ohio-based pharmaceutical distributor Cardinal Health, Inc. (CAH) will pay the government $8 million to resolve allegations by two whistleblowers that the company paid them kickbacks to buy its drugs.

Whistleblowers R. Daniel Saleaumua, a pharmacy owner, and consultant Kevin Rinne accused Cardinal Health of violating the federal Anti-Kickback Statute after the pharmaceutical wholesaler allegedly paid Saleaumua $440,000 for agreeing to buy its prescription drugs for his pharmacies. Under the False Claims Act, private citizens can sue on behalf of the United States and share in any recovery. Together, Saleaumua and Rinne will receive $760,000 as their share of the government’s recovery.

Financial kickbacks, like the ones alleged in the Cardinal Health whistleblower lawsuit, weaken Medicare and Medicaid by steering taxpayer dollars into provider pockets, rather than into sound patient care, said the DOJ.

“American taxpayers are the victims of illegal kickback schemes that result in Medicare and Medicaid paying millions of dollars more than they should for prescription drugs,” said Beth Phillips, U.S. Attorney for the Western District of Missouri. “Today’s $8 million settlement underscores our commitment to combating health care fraud and protecting taxpayers.”

The Cardinal Health whistleblower settlement is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover more than $5.5 billion since January 2009 in cases involving fraud against federal health care programs.

Anyone who believes their employer is engaging in Medicare or Medicaid fraud is urged to blow the whistle. Under qui tam provisions of the False Claims Act, employees are protected from retaliation.