CVS' Caremark To Pay $6 Mln To Settle Medicaid Reimbursement Allegations

(RTTNews) - Caremark LLC, a unit of drugstore chain CVS Health Corp (CVS), will pay $6 million to settle allegations that it knowingly failed to reimburse Medicaid for prescription drug costs, the U.S. Justice Department said Friday.

"It is vitally important that cash-strapped Medicaid programs receive reimbursement for the costs they incur that should properly have been paid for by other insurers," said Acting Assistant Attorney General Joyce Branda for the Justice Department's Civil Division.

Under the law, the private insurer, rather than the government, must assume the costs of health care for dual eligibles. If Medicaid erroneously pays for the prescription claim of a dual eligible, Medicaid is entitled to seek reimbursement from the private insurer or its PBM.

According to the DoJ statement, Caremark knowingly failed to reimburse Medicaid for prescription drug costs paid on behalf of Medicaid beneficiaries who also were eligible for drug benefits under Caremark-administered private health plan.

The allegations arose from a lawsuit filed by Donald Well, a former Caremark employee, under the whistleblower provisions of the False Claims Act. Well will receive $1.02 million plus interest.

CVS is currently trading at $80.33, up $0.49 or 0.61%, on the NYSE.