Caremark Settles False Claims Act Allegations

On Friday, the U.S. Department of Justice announced that Caremark, LLC will pay $6 million to settle allegations under the False Claims Act.  The U.S. government alleged that Caremark knowingly failed to reimburse Medicaid for prescription drug costs who also were eligible for coverage under Caremark private health plans.

The government alleged that Caremark’s RxCLAIM computer platform allegedly failed to pay the full amount due on certain claims because it improperly deducted certain co-payment or deductible amounts when calculating payments.  Allegedly, Caremark’s actions caused Medicaid to incur prescription drug costs for dual eligibles that should have been paid for by the Caremark-administered private health plans rather than Medicaid.

The case arose after a qui tam suit was filed by a former employee, who will receive $1.02 million plus interest as part of the settlement.  The press release from the Department of Justice noted that this was part of the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative and that more than $22.4 billion has been recovered thru this initiative using the False Claims Act since 2009.

The federal false claims act provides for civil monetary penalties when a false statement or record is knowingly provided to the US government to obtain payment or avoid payment.  Importantly, the law defines knowingly to include actual knowledge as well as deliberate ignorance or reckless disregard for the truth or falsity of the information.


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