Apparently, we now know what one of the criteria is not considered by JobsOhio: has the company been accused of millions of Medicaid fraud?
According to the Cincinnati Enquirer in 1998, OmniCare moved out of the Cincinnati area to move to northern Kentucky to the new RiverCenter II office complex being built in Covington, Kentucky right off the Ohio River:
In November, the Kentucky Economic Development Finance Authority approved a $4.1 million package of tax incentives to lure Omnicare from its current headquarters in Chemed Center to Northern Kentucky.
[Source: Cincinnati Enquirer, (May 3, 1997) “Omnicare moving to N.Ky.”
Fast forward to today:
But it’s a loss for Northern Kentucky as the Fortune 500 firm will move its good-paying jobs out of a riverfront high-rise in Covington to a downtown office tower less than a mile, but a whole state, away.
Enticing Omnicare to move is more than $8 million in tax breaks from Ohio and Cincinnati.
[Source: Cincinnati Enquirer, (Sept. 19, 2011) “Omnicare leaving Covington, moving to Cincinnati.”
Anyone seeing a disturbing pattern here? Anyone want to guess what the headline will be thirteen years from now?
$8 million in tax breaks, and that’s not all:
Convergys Corp. owns Atrium One, and bought it in 2004 with the help of $20 million in city grants. That allowed landlord Convergys to offer the space at bargain prices, he said.
“It became as close to free space as anything you can get,” McGraw he said.
You’ve got that right. Thanks to corporate welfare to the commercial landlord, Convergys Corp., which posted a $32 million profit in the second quarter this year (not revenues, profit), they’ve gotten so much government assistance that they are given Omnicare virtually free rent.
Still, it’s five hundred new jobs in Cincinnati, and that will help it’s tax base.
Omnicare will receive job creation tax credits from Ohio worth $6 million over seven years. It will receive an income tax break from Cincinnati worth $2.4 million over seven years.
Um, well, okay.
Well, this is a health care company, so there’s got to be a warm fuzzy upside, right?
Soon after Figueroa took over a struggling Omnicare in December, he made it known that he wanted to cut costs, consolidate operations and improve morale at a company that had been target of several investigations and lawsuits.
What kind of lawsuits? I mean, I’m a lawyer, so you can’t really be surprised that a company this big has been sued.
How bad could it be?
According to the Columbus Dispatch, they’ve had a little problem called Medicaid fraud:
The company agreed to pay the state of Michigan $52.5 million in 2006 on accusations of Medicaid fraud, the largest in state history. Specialized Pharmacy Services Inc., a subsidiary of Omnicare, also was involved; its president, Daniel Lohmeier, was charged with 148 felony counts, each punishable by up to four years in prison. He pleaded no contest to reduced charges.
Last year Omnicare agreed to pay $21.1 million to settle a whistleblower lawsuit, $11.6 million to Michigan and $9.5 million to Massachusetts. The states alleged Omnicare defrauded Medicaid programs by overcharging the agency for drugs.
Omnicare denied the allegations and isn’t acknowledging any liability.
The company also paid $385,000 to David Kammerer, who filed the initial lawsuit against Omnicare in August 2003, for his expenses and attorney’s fees.
That’s a ton of money for whistleblower claims that the company claims has no merit. If you have a certain criminal convictions, you can’t get government assistance for housing in Cincinnati, but this state line hopping company can get millions in tax breaks and incentives, practically free rent, even though it’s been spending millions to settle multiple claims of Medicaid fraud. And it gets that assistance from the State of Ohio, which administers Medicaid.
Congratulations, Governor Kasich.
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