LEGAL NEWSLINE

WASHINGTON (Legal Newsline) - RxAmerica LLC has agreed to a civil settlement and will pay the government $5.25 million in one of the first False Claims Act actions over Medicare's Prescription Drug Program known as Part D, the Justice Department announced Monday.

The settlement will resolve allegations that it made false submissions to the Centers for Medicare and Medicaid Services. RxAmerica is a wholly owned subsidiary of CVS Caremark Corporation that provides prescription drug benefits to Medicare beneficiaries pursuant to a prescription drug plan.

For Medicare participants to obtain the Part D prescription drug coverage, they must join a Medicare-approved plan, often referred to as a Part D plan. Medicare Part D plans can vary in the drugs that are covered, the reimbursable amount for those drugs, and the deductibles and co-pays required of participants to pay.

CMS offered a web-based tool called Plan Finder to assist participants choose a Part D plan that minimized their out-of-pocket costs. This site allowed Medicare Part D beneficiaries to determine prescription drug prices for each Medicare Part D plan that the beneficiary considered for enrollment. From the Plan Finder, CMS then obtained the pricing from data submitted to CMS by each Part D plan sponsor.

During Jan. 1, 2007 to Dec. 31, 2008, RxAmerica allegedly made false submissions to CMS regarding certain generic prescription drugs prices used for Plan Finder despite certifying to CMS that it would submit accurate pricing data for Plan Finder.

In turn, the government alleged that RxAmerica received Medicare Part D payments for claims of the covered drugs at prices that in some cases were significantly higher than the pricing data that was submitted to CMS for participant use on Plan Finder submitted by RxAmerica.

"The Department of Justice is committed to protecting the Medicare drug prescription program against all types of misconduct," said Stuart F. Delery, Acting Assistant Attorney General for the Justice Department's Civil Division. "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."

This will settle allegations made in two complaints against RxAmerica filed under the False Claims Act. The first, U.S. ex rel. Doe v. RxAmerica was filed in the United States District Court of the Eastern District of New York in November 2008. The second complaint, U.S. ex rel. Hauser vs. CVS Caremark Corp. and RxAmerica, was filed in United States Disctict Cort for the Western District of North Carolina in June 2009. Both cases were consolidated in the Eastern District of New York in November 2011.