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Feds Side With Whistleblower In Caremark Case

Pharmacy Benefits Company Allegedly Chiseled Medicaid

June 1, 2005
The U.S. Justice Department is intervening in a whistleblower suit against Caremark, Inc., a pharmacy benefits manager, alleging that the company chiseled Medicaid out of reimbursements it was entitled to.

Caremark, based in Nashville, administers pharmacy benefit services for over 1,000 private health plans across the country. The firm is responsible for the administration of prescription-related benefits for those clients that offer prescription benefits to employees and/or other covered individuals.

The lawsuit, filed in the United States District Court in San Antonio, Texas under the whistleblower provisions of the Federal False Claims Act, as well as several state False Claims Act statutes, alleges that Caremark knowingly avoided or decreased its obligation to reimburse Medicaid and other federal health insurance programs in dual coverage situations.

The suit was filed by Janaki Ramadoss, a former employee of Caremark who worked as a quality assurance representative in the company's paper claims processing department.

Some individuals who receive prescription benefits under private health plans administered by Caremark may also have dual coverage under Medicaid or other federal health insurance program. In such circumstances, coverage under Medicaid or other federal health insurance program is deemed secondary to coverage under the private health plan, unless otherwise provided by federal law.

A federal health insurance program that pays a prescription claim for a beneficiary it subsequently learns has dual coverage under a private health plan administered by Caremark may seek reimbursement from Caremark those prescription costs.

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