RxAmerica, a CVS Caremark subsidiary, has landed itself a spot in the spotlight for all the wrong reasons. The company has agreed to pay the US government $5.25 million to settle allegations of submitting false pricing information for Medicare Part D plans.
According to the Justice Department, RxAmerica, which provides prescription drug benefits to Medicare beneficiaries, submitted false data on generic prescription drug prices for the Plan Finder tool, a web-based tool designed to help Medicare Part D beneficiaries choose a plan that minimizes their out-of-pocket costs.
The alleged scheme took place between January 1, 2007, and December 31, 2008, during which time RxAmerica certified to the Centers for Medicare and Medicaid Services (CMS) that it would submit accurate pricing data for Plan Finder.
However, the government alleged that RxAmerica made false submissions regarding prices for certain generic prescription drugs used for Plan Finder, resulting in higher payments for claims from Medicare Part D plans.
The Justice Department’s Civil Division Acting Assistant Attorney General, Stuart F. Delery, stated, “The Department of Justice is committed to protecting the Medicare drug prescription program against all types of misconduct. As today’s settlement demonstrates, we will ensure that Medicare Part D sponsors submit accurate drug pricing information to ensure the integrity of the Medicare Part D program and to protect the beneficiaries who participate in the program.”
RxAmerica’s alleged actions were also condemned by Loretta Lynch, U.S. Attorney for the Eastern District of New York, who stated, “The health care choices facing Americans are complicated enough without patients being misinformed and forced to select a Part D plan based on false data. Those navigating our Medicare system deserve accurate information so they can make informed choices and obtain the benefits to which they are entitled.”
The settlement resolves allegations made in two separate complaints against RxAmerica filed under the False Claims Act’s qui tam or whistleblower provisions, which permit a private individual to file suit for false claims to the United States and share in a portion of the recovery.
RxAmerica’s actions are a stark reminder of the importance of transparency and accountability in the healthcare industry. The company’s alleged scheme not only put Medicare beneficiaries at risk but also wasted taxpayer dollars.
The Justice Department’s commitment to protecting the Medicare program from fraud and abuse is commendable, and this settlement serves as a warning to other companies that may be tempted to engage in similar misconduct.
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