Monday, May 30, 2005

Whistleblower lawsuit claims Caremark Rx defrauded Medicaid

The federal government and four states have joined a whistleblower lawsuit alleging that Caremark Rx, a pharmacy benefits manager, unlawfully avoided repaying Medicaid for drugs it should have covered itself.

The four states who have joined the suit are Texas, Tennessee, Florida and Arkansas.

Under the False Claims Act, the government may recover up to three times the amount it was defrauded. In this case the government claims the single damages amounted to hundreds of millions of dollars annually.

The Street.com reported on developments on May 27, 2005