Caremark LLC (“Caremark”) agreed to pay $4.25 million to resolve a False Claims Act lawsuit alleging that it failed to reimburse Medicaid for prescription drug costs that should have been paid by private health insurance plans.  Caremark is a pharmacy benefit management company operated by CVS Caremark Corp.

 “Dual eligible” individuals are covered by Medicaid as well as private health insurance, but federal law requires that private insurers assume their health care costs.  Medicaid is entitled to reimbursement of any prescription claims it pays for dual eligibles.

Using a computer claims processing program, Caremark allegedly cancelled claims for reimbursement submitted by Medicaid for dual eligibles, thereby shifting prescription drug costs to the government.

This False Claims Act lawsuit was filed by a former Caremark quality assurance representative, who will receive $505,680 from the federal government’s share of the settlement proceeds.

For more information on this case, click here:  http://www.justice.gov/opa/pr/2013/December/13-civ-1267.html

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