CVS’ PBM settles Medicaid reimbursement fraud charges

CVS Health’s pharmacy benefits management company will pay $6 million to settle federal charges it failed to reimburse Medicaid for prescription costs also covered by private plans, according to the U.S. Department of Justice.

The government had accused Caremark of improperly processing claims of "dual-eligible" patients. Such were patients whose prescriptions costs were paid to Caremark by both private insurers and Medicaid. Caremark was accused of not reimbursing Medicaid for its overpayments.

Caremark pays to settle Medicaid fraud in 5 states

A former Caremark employee, Donald Well, told the government about the dual payments and will receive $1.02 million plus interest as a whistleblower.

Christine Cramer, CVS spokesperson, said the company denies wrongdoing and settled to avoid protracted litigation. She said the allegations did not involve CVS’ pharmacy or Medicare Part D businesses.

According to the Justice Department, Caremark improperly deducted co-payments or other money when calculating payments on some claims. That caused Medicaid to cover prescription drug costs for dual-eligible patients that should have been paid by private health plans.