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RxAmerica Agrees to Pay $5.25 Million to Settle False Claims Act Allegations

According to the Justice Department, RxAmerica LLC, a wholly owned subsidiary of CVS Caremark Corporation, has agreed to pay the federal government $5.25 million to resolve allegations that it violated the False Claims Act.

RxAmerica provides prescription drug benefits to Medicare beneficiaries in what is commonly referred to as a Part D plan. Medicare beneficiaries can choose one of many Part D plans available. The covered drugs, deductibles and patient co-pays vary from plan to plan. In order to assist Medicare beneficiaries in selecting a Part D plan, the Centers for Medicare and Medicaid Services (CMMS) provides a computerized tool called Plan Finder that contains the pricing information for each Part D plan available.

Two separate complaints filed under the qui tam provisions of the False Claims Act in New York in November 2008 and in North Carolina in June 2009, were consolidated in New York in November 2011. The two whistleblowers alleged that RxAmerica submitted falsified pricing data to CMMS for certain prescription drugs, even though it had certified to CMMS that the prices were accurate. The consolidated complaint alleged that the inaccurate pricing data was submitted during the period from January 1, 2007 to December 31, 2008.

According to the government, RxAmerica received Medicare Part D payments for certain drugs at prices that were significantly higher than the prices reported by RxAmerica for use on Plan Finder. The government claims RxAmerica’s submission of inaccurate prices to CMMS resulted in the dissemination of misleading information to Medicare beneficiaries and resulted in the selection of RxAmerica’s Part D plan based on false data.

The whistleblowers may be eligible to receive a percentage of the settlement amount as their reward under the qui tam provisions of the False Claims Act.