CVS' Caremark unit settles U.S. false claims allegations

[September 27, 2014]  By Jonathan Stempel

(Reuters) - Caremark LLC, a unit of CVS Health Corp, will pay $6 million to settle U.S. allegations that it knowingly failed to reimburse Medicaid for prescription drug costs paid on behalf of patients who were also covered by private health plans it administered.

The settlement announced on Friday by the U.S. Department of Justice resolves claims that Caremark, a pharmacy benefits management company, violated the federal False Claims Act by improperly processing claims of such "dual eligible" patients.

Donald Well, a former Caremark employee who brought the case to the government's attention, will receive $1.02 million plus interest under the law's whistleblower provisions.

CVS spokeswoman Christine Cramer said the Woonsocket, Rhode Island-based company settled to avoid protracted litigation, and denied wrongdoing. She also said the accord does not involve its pharmacy or Medicare Part D businesses.

Caremark is a pharmacy benefits manager for private health plans that insured some patients who also had Medicaid coverage. Medicaid can seek reimbursement from private insurers or their pharmacy benefits managers if it pays prescription drug claims of such patients in error.

The government said a Caremark computer platform improperly deducted co-payments or other sums when calculating payments on some claims. It said this caused Medicaid to cover prescription drug costs for dual eligible patients that should have been borne by Caremark-administered private health plans.

(eporting by Jonathan Stempel in New York; Editing by Chizu Nomiyama. Editing by Andre Grenon)

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