Whistleblower Law Blog

RxAmerica Settles False Claims Act Lawsuit for Misrepresenting Costs of Prescription Drugs to Senior Citizens

RxAmerica, a subsidiary of CVS Caremark, entered a civil settlement agreement with the federal government and agreed to pay $5.25 million to resolve allegations that the company misrepresented prescription drug costs to seniors and submitted false claims to the Centers for Medicare & Medicaid Services (CMS).

According to the lawsuit filed in 2009 by Max and Jan Hauser, between January 1, 2007 and December 31, 2008, RxAmerica misrepresented the cost of some generic prescription drugs on Medicare’s online “Plan Finder,” an online system used by senior citizens to compare the cost and benefits of different Medicare Part D plans. On the Plan Finder, RxAmerica listed one price for prescription medication but in some cases billed CMS a significantly higher price than the pricing data listed on Plan Finder. As a result of this billing practice, the Hausers and other senior citizens inadvertently used up their Part D benefits faster than expected and were forced into a “doughnut hole” where they had to start paying out-of-pocket for medication.

Stuart F. Delery, Acting Assistant Attorney General for the Justice Department’s Civil Division, said:

“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.”

The Employment Law Group® law firm’s whistleblower attorneys have helped many clients file suit against employers that fraudulently bill the U.S. government, and have established favorable precedents under the retaliation provision of the False Claims Act.

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