Corporate Compliance

U.S. government joins suit against Caremark Rx

Compliance Monitor, June 1, 2005

The federal government has joined a lawsuit against Caremark Rx in an effort to recoup funds it believes the pharmacy benefits manager owes the Medicaid program, according to a May 27 report on TheStreet.com.

The government is joining a whistleblower suit that already included Texas, Tennessee, Florida, and Arkansas, TheStreet.com reported. The feds claim that Caremark "engaged in an unlawful scheme over many years," billing Medicaid for drugs it should have covered itself. The U.S. and the four states are seeking repayment of an undisclosed amount of money.

"We intend to send Caremark a past-due bill for its conduct," said Texas Attorney General Greg Abbott on TheStreet.com. "This company schemed to avoid responsibility for its healthcare obligations to members who were paying premiums. Instead, it opted to let the Medicaid program--and Texas taxpayers--cover expenditures it should have covered on behalf of those already insured under its plan."

According to TheStreet, pharmacy benefit managers' failure to repay Medicaid for drugs they should have covered has been a growing problem for years, now totaling hundreds of millions of dollars annually. The False Claims Act allows the government to seek retribution from Caremark that equals three times the company's portion of the bills.

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