Corporate Compliance

CVS Caremark to pay $36.7M to settle fraud allegations

Compliance Monitor, March 26, 2008

CVS Caremark will pay $36.7 million to settle claims it increased Medicare reimbursement by improperly switching patients to the more-expensive form of Ranitidine, according to a Department of Justice (DOJ) press release.

Between 2000 and 2006, CVS Caremark allegedly dispensed Ranitidine capsules instead of tablets. The change netted CVS Caremark as much as $62 on a single prescription. Medicaid sets maximum reimbursement prices for the tablet form of the drug but not for capsules, which are more expensive but prescribed less frequently by physicians.

The practice came to light when a licensed pharmacist filed a whistleblower lawsuit in 2003. Twenty-three states and the District of Columbia will receive money as part of the settlement.

CVS Caremark also entered into a five-year corporate integrity agreement with the OIG.


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