U.S. enters $5.25 Million False Claims Act Settlement with CVS Subsidiary, RxAmerica for False Pricing relating to its Medicare Part D Plan

On October 15, 2012, the United States government announced a False Claims Act settlement with RxAmerica, LLC to resolve allegations that it made false submissions to the Centers for Medicare & Medicaid Services (CMS) regarding the prices it charged for drugs under its Medicare Part D plan.

In one of the first False Claims Act settlements involving Medicare’s Prescription Drug Program, more commonly referred to as Medicare Part D, the government alleged that between January 1, 2007 and December 31, 2008, RxAmerica, LLC, a wholly owned subsidiary of CVS Caremark Corporation, made false submissions to CMS regarding prices for certain generic prescription drugs CMS used for its  Plan Finder program.  CMS offers Plan Finder, a web-based tool,  to Medicare Part D beneficiaries in order to determine the estimated prescriptions drug prices for each Medicare Part D plan. The beneficiaries make their choice to join a particular Part D prescription plan based on this pricing information.  The data CMS uses for its Plan Finder is submitted by each Part D plan sponsor.  Each sponsor, including RxAmerica,  certified to CMS that it would submit accurate pricing data for Plan Finder.

The government alleged that despite RxAmerica’s certification to CMS regarding the submission of accurate pricing to Plan Finder, it actually submitted one set of prices to CMS to use with the program and submitted another set of prices for payment from Medicare Part D.  Some prices were significantly higher than the prices that RxAmerica had originally reported to Plan Finder.  RxAmerica was charged with advertising false prices to Medicare Part D enrollees.

The settlement resolves two separately filed qui tam actions.  The first complaint, U.S. ex rel. Doe v. RxAmerica was filed in the United States District Court of the Eastern District in November 2008.  The second complaint, U.S. ex rel. Hauser v. CVS Caremark Corp., and RxAmerica was filed in the United States District Court for the Western District of North Carolina in June 2009.  The two cases were consolidated in the Eastern District of New York in November 2011.

Posted in False Claims, Federal False Claims Act, Government Intervention, Healthcare Fraud, Other Kinds of Fraud, Qui Tam, SettlementsNo Comments


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