Ashley Perry Oct. 10, 2014, 11:49am

CareMed Pharmaceutical Services agreed to pay $846,224 in restitution to Medicaid as part of a settlement with the state of New York, Attorney General Eric T. Schneiderman announced on Thursday.

The New York-based retail specialty pharmacy, also known as Sorkin's Ltd Rx, was accused of making false statements to the New York State Medicaid Program to secure prior authorizations for specialty medications, and allegedly restocked and resold medications paid for by Medicaid, but never received by the patient. 

“Sorkin’s used dishonest and unscrupulous practices that resulted in hundreds of thousands of dollars in wasteful spending,” Schneiderman said. “This settlement sends the clear message that companies that seek to defraud critical programs like Medicaid will be held accountable.”

New York will receive $465,423 of the restitution to Medicaid, which is funded by the federal government and the state.

As part of the settlement agreement, Sorkin’s admitted to several dubious activities between Jan. 1, 2009, and Dec. 31, 2012. Sorkin's contacted insurance companies to obtain prior authorization for coverage of specialty drugs prescribed for Medicaid recipients and some Sorkin's representatives falsely stated they were calling from the physician's office.

Sorkin's representatives used clinical information based on their understanding of prior authorization criteria rather than accurate clinical documentation. Medicaid funds were not adequately reimbursed when medications were not obtained by the patients, and the products were restocked and resold, which resulted in double payment to Sorkin's.

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