A multi-state investigation into alleged double billing by a national pharmacy chain as ended with a multi-million dollar settlement.
CVS Pharmacy will reimburse California more than $1.76 million as part of a $17.5 million settlement with the U.S. Department of Justice and nine other states, including Alabama, Florida, Indiana, Massachusetts, Michigan, Minnesota, New Hampshire, Nevada and Rhode Island.
Starting in late 2002 and continuing through 2010, CVS submitted prescription drug claims to Medi-Cal for individuals who were covered by both Medi-Cal and a third-party insurance plan. The pharmacy should have first billed the primary insurer — and sought Medi-Cal reimbursement only for the remaining amount, typically the co-pay.
"CVS chose to short-change taxpayers and undermine our healthcare safety net with these actions," said California Attorney General Kamala Harris. "We are all better off now that this deception has been uncovered.”
The actions of the pharmacy chain came to light in 2008 when a pharmacist working in Minnesota in 2008, came forward with his observations.
A multi-state investigation, in which billing and payment information was analyzed and cross-referenced to private insurance payment, found that CVS billed more than the amount allowed for so-called dual-eligible claims.
Investigating the case and negotiating the settlement with CVS were the California Attorney General's Bureau of Medi-Cal Fraud and Elder Abuse, along with the U.S. Department of Justice, the U.S. Attorney's Office for the Western District of Wisconsin, the U.S. Department of Health and Human Services - Office of Inspector General, and the attorneys general of the other settling states.
As part of the agreement, CVS will train its employees in accurate billing procedures. CVS has started working with individual states to make sure it bills correctly for dual-eligible beneficiaries. Pharmacy payments will also be audited on a regular basis by an independent review organization.
The funds recovered for California will be paid to the Department of Health Care Services to reimburse the state's Medi-Cal program.