CVS Caremark Corp. will pay more than $886,000 to the TennCare Bureau to settle allegations of improper billing, the state attorney general’s office announced Tuesday.
The payment is part of an almost $37 million settlement with the federal government, 23 states and the District of Columbia after an investigation that began in 2001.
“This was a hard-fought case that was resolved as a result of good cooperation from federal agencies and state agencies including the Tennessee Bureau of Investigation’s Medicaid Fraud Control Unit and TennCare Bureau,” Tennessee Attorney General Robert Cooper said in a statement. “We are pleased with the outcome.”
Authorities claimed that the CVS pharmacy chain switched dosage forms of an antacid medicine, ranitidine, from tablets to capsules in an effort to increase reimbursements from Medicaid. Ranitidine, the generic version of Zantac, contains the same active ingredients in both its tablet and capsule forms, but the two versions of the drug technically are considered different drugs, according to The Associated Press.
The change allowed CVS to charge state Medicaid programs more than four times as much for each pill in capsule form, the AP reported.
CVS, which has 6,200 stores, denied any wrongdoing in a Tuesday statement announcing the settlement.
“The company agreed to settle the matter in order to defray the distraction, burden and expense of continuing litigation,” the statement said.
Kristin Helm, spokeswoman for the TBI, said the agency’s Medicaid fraud control unit investigates cases of provider fraud, involving providers such as doctors, hospitals or pharmacies that bill a TennCare managed care organization for medical services provided to an enrollee.
Fraudulent providers have lied to obtain an improper payment for their services or lied about the services rendered, the unit’s Web site states.
CVS officials have said that for years the company purchased the capsule form of ranitidine because it was cheaper than tablets. Some state Medicaid programs have at times reimbursed pharmacies at a higher rate for the capsules than for the tablets, the statement said.
“The government alleged that the practice of dispensing capsules instead of tablets was motivated by a desire to increase Medicaid reimbursement. (CVS) has expressly denied this allegation,” the statement said.
CVS officials also have signed an agreement with the U.S. Department of Health and Human Services’ Office of the Inspector General to ensure that CVS does not switch dosage forms if the result would increase the costs to third-party payers, including Medicaid. The agreement also subjects the company’s billing practices to regular federal oversight.
The Woonsocket, R.I.-based company also agreed to pay $800,000 for investigative costs and other fees.
Health care reporter Emily Bregel has worked at the Chattanooga Times Free Press since July 2006. She previously covered banking and wrote for the Life section. Emily, a native of Baltimore, Md., earned a bachelor’s degree in American Studies from Columbia University. She received a first-place award for feature writing from the East Tennessee Society of Professional Journalists’ Golden Press Card Contest for a 2009 article about a boy with a congenital heart defect. She ...
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