CVS Settles Medicaid Fraud Whistleblower Case

Pharmacy Retailer CVS Settles Medicaid Fraud Whistleblower Case with US Government

A unit of pharmacy and healthcare retailer CVS Health Corp, Caremark LLC has agreed to settle whistleblower allegations that the company committed Medicaid fraud.

Caremark is a healthcare plan through CVS that manages a number of “dual eligible” individuals – patients who are eligible for both CVS’s Caremark program and Medicaid for their prescription benefits. According to federal law, CVS must reimburse Medicaid for the costs of health care for those dual eligible patients.

However, a whistleblower brought forth a claim that the company failed to reimburse Medicaid, thus committing Medicaid fraud. According to a CVS spokeswoman, the company denies any intentional wrongdoing in the Medicaid fraud case, but did admit that a computer algorithm used by Caremark failed to calculate the reimbursements on some claims.

The Medicaid fraud whistleblower case was settled for $6 million. CVS stated that it wished to avoid protracted litigation, and as part of the settlement deal, the company would deny wrongdoing.

This is not the first time CVS has faced Medicaid fraud whistleblower charges. In December last year, CVS agreed to pay the government and five states a total of $4.25 million, to settle whistleblower claims that the pharmaceutical retailer intentionally did not reimburse Medicaid for prescription drug costs.

What is a Whistleblower Lawsuit?

Qui Tam” are the first words of a Latin clause referring to the plaintiff as “one who sues as much for the state as for himself or herself.” These private citizens, known as “relators” or “whistleblowers,” relate information to the government and share in any money recovered.

It is a provision of the Federal Civil False Claims Act that allows a private citizen to file a suit, in the name of the U.S. Government, charging fraud by government contractors and other entities that receive or use government funds.

Common whistleblower actions include:

  • Health care fraud, including Medicare and Medicaid fraud,
  • defense contractor fraud, and
  • other kinds of fraud

Qui tam lawsuits have been, and continue to be, a very effective and successful tool in combating government procurement and program fraud. To bring a qui tam action under the statute, an individual must have personal knowledge and actual evidence of fraud. Successful qui tam claimants will be rewarded a portion of the money the government recovers.

Bolstered by amendments passed by Congress in 1986, the law has armed private citizens who have independent and direct knowledge of fraud, with a weapon to prosecute government contractors and others who are defrauding the Government.

The Strom Law Firm Protects Medicaid Fraud Whistleblowers in South Carolina

If you have first-hand knowledge of government fraud occurring at your place of employment or your doctor’s office, including Medicaid fraud, the attorneys at the Strom Law Firm can help protect your rights. In order to help the government provide the best possible services, Medicare and Medicaid fraud must be reported as soon as possible. The attorneys at the Strom Law Firm understand the complexity of qui tam and whistleblower suits, and we offer free, confidential consultations to discuss the facts of your case. Contact us today.803.252.4800


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