CVS sued for suspected fraudulent Rx reimbursements

CVS Pharmacy is once again in hot water regarding its handling and dispensing of controlled substances-this time being sued by an insurer and 18 states that claim the pharmacy chain collected hundreds of millions for invalid prescriptions that were diverted to the black market.

According to a report by Courthouse News Service, insurer Fox Rx, the United States, Chicago, New York City, Washington, D.C., and 18 states filed suit in federal court in New York alleging CVS violated the False Claims Act when submitting some claims to Medicare for controlled substances such as codeine and oxycodone.

Prescriptions for controlled substances require a registration number issued by the Drug Enforcement Administration (DEA). However, the lawsuit claims that one out of every five of the claims submitted by CVS between January 2008 and 2010 did not have a number.

"CVS Pharmacy's failure to include DEA numbers was not mere error - it was a profitable business practice," Fox Rx stated in the lawsuit.  "As a result of its practices, CVS allowed federal and state funds to fund the purchase of dangerous drugs for black market sale and abuse."

Michael DeAngelis, a CVS spokesperson, issued the following statement: “CVS/pharmacy is committed to the highest standards of ethics and business practices, including complying with all federal and state laws governing the dispensing of prescriptions. We have not been served with the lawsuit being described and we are not familiar with its allegations.”

The lawsuit was filed under seal last September, but was unsealed in March, according to the report. It seeks treble damages for hundreds of millions of dollars lost by the federal government and up to $11,000 for each prescription issued without a DEA number.

California, Florida, Georgia, Hawaii, Illinois, Indiana, Louisiana, Massachusetts, Michigan, Montana, Nevada, New Jersey, New York, North Carolina, Tennessee, Texas, Virginia, and Wisconsin all have joined the suit. 

This lawsuit is one of a series of problems CVS has encountered with controlled substances. In March, a report in the Los Angeles Times said CVS Caremark is facing as much as $29 million in fines associated with 37,000 prescription painkillers that are missing from four of its California stores.        

In response to the DEA crackdown on pharmacies and suppliers, CVS last year took the unusual step of banning so-called pill-mill doctors it believed were overprescribing controlled substances.