Attorney General Gansler Announces Settlement with
National Retail Pharmacy
CVS/Caremark to Pay More Than $800,000 to Maryland’s
BALTIMORE, MD (March
18, 2008) – Attorney General Douglas
F. Gansler today announced a $36.7 million federal and multistate
settlement with CVS/Caremark Corporation to resolve allegations
of improper billing. The payment, of which Maryland’s Medicaid
Program will receive $830,490, resolves claims that CVS violated
state and federal statutes and regulations by switching dosage
forms of ranitidine, an antacid medication commonly prescribed
for Medicaid patients. The settlement was reached with the United
States, 23 states and the District of Columbia. CVS/Caremark, which
currently operates retail pharmacies in 38 states, furnishes pharmacy
services to Medicaid recipients in Maryland.
As the result of a joint federal-state investigation, it was discovered
that from April 1999 through 2006, CVS filled prescriptions for
numerous Medicaid recipients by aggressively switching dosage forms
of ranitidine (the generic form of Zantac, a commonly prescribed
anti-ulcer medication), violating federal and state statutes and
regulations. The substitution of the ranitidine capsules for tablets
resulted in higher payments under the automated Medicaid reimbursement
system, with no corresponding medical benefit to the individuals
receiving the prescriptions.
In addition to the
payment of cash settlements to the state and federal governments,
CVS/Caremark has agreed to the terms of a
Corporate Integrity Agreement (CIA) with the Office of the Inspector
General of the United States Department of Health and Human Services.
The CIA will include provisions that will ensure that CVS does
not switch dosage forms of medications if the result would increase
the costs to third-party payers, including Medicaid, and will subject
the company’s billing practices to ongoing federal scrutiny.
The settlement was
the result of negotiations jointly conducted by the United States
Attorney’s Office for the Northern District
of Illinois and the National Association of Medicaid Fraud Control
Units, of which the Maryland Medicaid Fraud Control Unit of the
Attorney General’s Office is a member.