A federal judge has ordered CVS Health’s pharmacy benefit manager, Caremark, to pay nearly $290 million after a whistleblower accused the business of overcharging Medicare on prescription drugs more than a decade ago.
Sarah Behnke, a former Aetna actuary, alleged Caremark defrauded Medicare Part D by causing false drug cost reports to be submitted in 2013 and 2014.
Caremark was found liable in June, and Philadelphia federal Chief Judge Mitchell Goldberg ordered the company to pay $95 million in damages, deferring final rulings on penalties.
Goldberg, who was appointed by President George W. Bush, tripled the damages on Tuesday, finding Caremark Rx, CaremarkPCS Health and CVS Caremark Part D Services should pay a total of $289.9 million in damages and penalties, according to court documents.
Goldberg also imposed $4.87 million in civil penalties.
“We are pleased that the Behnke ruling in June was in our favor as to certain issues for CVS Pharmacy and CVS Health Corporation’s liability and disappointed the court found against Caremark on other issues. We plan to appeal,” CVS wrote in a statement to FOX Business.
In 2014, Caremark was accused of manipulating how drug costs were reported, prompting Aetna and SilverScript to submit false direct and indirect remuneration reports in 2013 and 2014, according to court records.
The scheme, which was allegedly designed to hide profits, led to Medicare Part D being overbilled by $95 million.
While Goldberg did not find “actual...
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