Caremark, LLC, a pharmacy benefit management (PBM) company operated by CVS Caremark Corporation, recently agreed to pay the federal government $6 million to settle a whistleblower lawsuit brought under the federal False Claims Act. The whistleblower lawsuit alleged that Caremark engaged in Pharmaceutical Fraud by knowingly failing to reimburse Medicaid for the cost of prescription medications which Medicaid paid on behalf of Medicaid beneficiaries who were “dual eligible.”
Dual eligible patients are patients who are covered by both Medicaid and a private health care plan. The law requires that private insurance, not the government, pay costs of dual eligible patients’ health care costs. If Medicaid incorrectly pays for the cost of prescription medication of a dual eligible patient, Medicaid may seek reimbursement from the private insurer or its PBM.
The qui tam complaint alleges that Caremark knowingly charged Medicaid for prescription medication for Medicaid patients who were also eligible for Caremark-administered private health plans. Moreover, the government alleged that Caremark’s actions caused Medicaid to pay prescription medication costs for dual eligible patients that should have been paid for by Caremark-administered private health plans.
The pharmaceutical whistleblower in this case, Donald Well, a former Caremark employee, filed a whistleblower lawsuit under the qui tam provisions of the federal False Claims Act. The federal government subsequently intervened and Mr. Well received a whistleblower award of $1.02 million plus interest.
The case was handled by the U.S. Attorney’s Office for the Western District of Texas, the Department of Justice’s Civil Division, and the Department of Health and Human Services Office of the Inspector General.
The case is captioned United States ex rel. Well v. CVS Caremark, Inc., Civil Action No. SA:11-CV-00747 (W.D. Tex.). The claims settled by this agreement are allegations only; there has been no determination of liability.
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Ross M. Wolfe and the Weiser Law Firm litigate whistleblower lawsuits on a contingent fee basis, so whistleblowers do not pay attorneys’ fees or court costs unless there is a recovery.