Attorney general announces Medicaid fraud settlement with CVS Pharmacy

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By The Staff

Attorney General Jack Conway announced last week that Kentucky will receive a $1.36 million settlement from CVS Caremark Corp. for defrauding the state Medicaid program.

CVS overcharged the Kentucky Medicaid program by systematically switching Medicaid recipients whose physicians had prescribed ranitidine, the generic form of the popular antacid drug Zantac, tablets to the higher-priced capsule form of the drug.

The illegal substitution of the capsule for the tablet resulted in higher payments by the Kentucky Medicaid program with no corresponding medical benefit to the Medicaid patient. These illegal switches were made without contacting the physicians who prescribed the drug.

"The tactics employed by this pharmacy overcharged consumers and taxpayers for these medications," General Conway said. "I appreciate the fact that CVS has admitted its mistake, has agreed to future federal oversight and will reimburse Kentucky taxpayers for the overcharges."

CVS is the largest retail pharmacy chain in the nation and operates 68 retail pharmacies in Kentucky, which furnish pharmacy services to Kentucky Medicaid recipients.

In addition to the payment of cash settlement, CVS entered into a Corporate Integrity Agreement with the Office of the Inspector General of the United States Department of Health and Human Services to 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.

This settlement is part of a $36.7 million settlement with the United States, Kentucky, 22 other states and the District of Columbia.

The Attorney General's Tip Line for reporting allegations of Medicaid fraud is (877) 228-7384.