WOONSOCKET, R.I. — CVS Caremark announced on Friday that it has agreed to pay $17.5 million, to be allocated among the federal government and 10 participating states, to resolve a civil complaint concerning how its CVS/pharmacy retail pharmacies submitted reimbursement claims in certain states for prescriptions filled for "dual eligible" patients who have coverage under both Medicaid and a third-party insurance plan.
The settlement agreement is with the U.S. Department of Justice, the Office of Inspector General of the Department of Health and Human Services, and state attorneys general from 10 states — Alabama, California, Florida, Indiana, Massachusetts, Michigan, Minnesota, New Hampshire, Nevada and Rhode Island. This payment amount has been fully accrued for in prior fiscal periods and is not material.
Pursuant to the agreement, the company denied engaging in any wrongful conduct, and indicated that it has settled the matter to avoid the expense and uncertainty of protracted litigation.
CVS/pharmacy stated that it did not intentionally overcharge any state Medicaid program. The company regularly receives reimbursement from Medicaid and believes it is in compliance with each state's billing requirements for dual eligible patients. Dual eligible patients with third-party insurance coverage comprise a small percentage of the Medicaid patient population, and this matter involves only certain state Medicaid programs. The settlement involves the CVS/pharmacy retail business only and does not involve CVS Caremark's pharmacy benefit manager or Medicare Part D businesses, the company noted. CVS Caremark stressed its commitment to ensuring its business operations are in compliance with the law and that they adhere to the highest ethical standards.
The company stated that it continues to work with the government to reconcile the billing processes for dual eligible patients, which vary based on each state's Medicaid program, to ensure compliance with all reimbursement regulations.