A national Medicaid fraud settlement was reached last month with CVS Pharmacy, Inc. that included Alabama. Under the settlement, CVS will pay $17.5 million to the federal government and ten states. The case was pending in the U.S. District Court for the Western District of Wisconsin. The settlement resolves the claim that CVS overcharged the Medicaid programs for prescription drugs.
It’s important that the state Attorneys General act as guardians of the taxpayers’ money, and protect them against inappropriate or excessive charges against government agencies. Alabama Attorney General Luther Strange said he was proud of the work performed by our state’s Medicaid Fraud Control Unit. Funds were recovered that are badly needed for vital services provided by the Alabama Medicaid Agency.
Alabama will receive $1,150,254.00 from the settlement which represents both federal and state dollars paid for prescriptions drugs for Alabama Medicaid beneficiaries. Alabama will keep $366,758.49 from the settlement as its share, with the remainder returning to the federal government to compensate for the portion it had overpaid.
CVS Pharmacy had billed the wrong amount to Medicaid for dual-eligible beneficiaries – Medicaid beneficiaries who also have third-party prescription coverage (other than Medicare). Pharmacies must bill the other insurer first, and submit a claim to Medicaid for only the amount of any remaining liability, typically the co-pay. The investigation found that CVS billed more than the allowed amount for certain dual-eligible claims, resulting in excessive reimbursement by the states.
Investigation of the case involved complex analysis of billing and payment information, cross-referenced to private insurance payments. The involved states assisted the U.S. Department of Justice, the U.S. Attorney’s Office in the Western District of Wisconsin, and the U.S. Department of Health and Human Services Office of Inspector General, in investigating and negotiating a settlement of the case. CVS Pharmacy operates more than 7,000 retail pharmacies across the United States.
As part of the settlement, an existing Corporate Integrity Agreement will be amended to require CVS to implement correct billing procedures and train employees. An independent review organization will regularly audit payments and issue reports on CVS’s compliance. CVS has started working with individual state Medicaid offices to make sure it bills correctly for dual-eligible beneficiaries. It should be noted that since 2004, the Attorney General’s Medicaid Fraud Control Unit has recovered more than $30 million on behalf of Alabama’s Medicaid program.
Source: Associated Press
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