Caremark Settles False Medicaid Claims For $4.2M; Whistleblower to Get $5.5K
Caremark LLC (Caremark) has agreed to pay the government more than $4.2 million to settle allegations, under the False Claims Act, that they knowingly failed to reimburse Medicaid for prescription drug costs, the Justice Department announced earlier this week. Caremark is operated by CVS Caremark Corp., one of the largest pharmacy benefit management (PBM) company and retail pharmacies in the country.
Caremark served as the PBM for private health plans that insured a number of individuals receiving prescription drug benefits under both a Caremark-administered plan and Medicaid. When an individual is covered by both Medicaid and a private health plan, the individual is called a “dual eligible.” Under the law, the private insurer, rather than the government, must assume the costs of health care for dual eligibles. If Medicaid erroneously pays for the prescription claim of a dual eligible, Medicaid is entitled to seek reimbursement from the private insurer or its PBM, in this case Caremark.
According to the government, Caremark allegedly used a computer claims processing platform to cancel claims for reimbursement submitted by Medicaid for dual eligibles. The government alleged that Caremark’s actions caused Medicaid to incur prescription drug costs for dual eligibles that should have been paid for by the Caremark-administered private health plans rather than Medicaid.
The lawsuit was originally filed by Janaki Ramadoss, a former Caremark quality assurance representative, under the whistleblower provision of the False Claims Act. The False Claims Act allows private parties with knowledge of fraud against the government to sue on behalf of the government and share in the recovery. Ramadoss will receive $505,680 as his portion of the settlement.
The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments. We have years of experience representing whistleblower clients who uncover fraud of every kind perpetrated against our government including, health care fraud, contract fraud, and tax fraud. Read more about our expertise in False Claims Act cases and how you can take action.