Medicare Compliance & Reimbursement

PBM giant faces False Claims Act charges.  It was bad enough for pharmacy benefits manager Medco Health Solutions when the Department of Justice intervened in two whistleblower suits charging the company with defrauding the Federal Employees Health Benefits Program, TRICARE and Medicare. But now one set of whistleblowers is pressing forward with claims that the Franklin Lakes, NJ company also defrauded Medicaid in six states and Washington, DC. The feds joined the two whistleblower lawsuits in June; one had been filed by New Jersey physician Dr. Joseph Piacentile, the other by two long-time Medco employees, George Bradford Hunt and Walter Gauger. In the DOJ's complaint, filed Sept. 29, the government accuses the company of, among other things: canceling and destroying prescriptions to avoid penalties for delays; "shorting" patients - mailing less then the full amount of a prescription - but billing for the full amount; failing to perform mandatory pharmacist services; trumping up records of contacts with physicians; shipping and billing for prescriptions that were never ordered; and changing prescriptions without patients' knowledge or consent. The complaint also accuses the company of collecting kickbacks from drugmakers to favor their products. Merck-Medco Managed Care LLC and a number of affiliated companies are also named in the suit. Meanwhile, Hunt and Gauger Oct. 3 filed an amended complaint that fleshes out their case against Medco with respect to Medicaid claims - allegations the DOJ decided not to run with. The complaint includes a number of state-law counts involving Florida, Tennessee, Illinois, Nevada, Massachusetts, Virginia and Washington, DC. In response to the DOJ's complaint, Merck said the allegations "lack merit." "If required, we are prepared to provide a vigorous defense to these allegations and we expect to prevail," says Medco Health General Counsel David Machlowitz. Lesson Learned: Expect close federal scrutiny wherever state and federal governments are paying for pharmaceutical products.