Medicare Beneficiary Whistleblowers To Share in $5.5M Pharmacy Fraud Settlement Involving CVS Caremark Subsidiary RxAmerica

A $5.25 million pharmacy fraud settlement has been reached between the US Department of Justice and RxAmerica stemming from two whistleblower lawsuits filed under the False Claims Act. The CVS Caremark Subsidiary is accused of misrepresenting the prices of drugs to senior citizens that were part of the Medicare Part D Prescription drug benefit program. One of the complaints was filed by Max and Jan Hauser. The other one was submitted on behalf of Robert Fischer. All of these whistleblower plaintiffs are Medicare beneficiaries.

Per the Qui Tam lawsuits, RxAmerica did not accurately represent prescription drug prices on the Medicare Prescription Drug Plan Finder, which is an online tool of the Centers for Medicare & Medicaid Services. The tool is used to compare different Medicare Part D plans’ prices and benefits.

The Hausers, both 71, filed their Medicare fraud case after looking at their Explanation of Benefits form and discovering that RxAmerica was overcharging for prescription drugs that could be found on the Plan Finder tool, which caused the couples Part D benefits to be used up faster. This compelled Max Hauser to have to go into the Medicare Part D “donut hole,” and he had to pay for medications from his own pocket. He has said that the drug price discrepancies were “astronomical.”

The Hausers expressed dismay at what overpricing cost them and they were concerned that others were also similarly impacted. Their North Carolina whistleblower complaint was consolidated with the lawsuit of Fischer, who made similar allegations.

Getting categorized in the Medicare Part D donut hole forces seniors to pay for prescriptions using their own funds. Unfortunately, as a result, some end up having to forego needed medications to avoid these costs.

According to the US, from 1-1-07 to 12-31-08 RxAmerica turned in false submissions to CMS about the costs of specific generic prescription meds found in the Plan Finder, even though it had certified that it was providing accurate price information. Because of this, RxAmerica allegedly received Part D payments for claims for these drugs that were at higher prices than the rates that were given to CMS. The government charged RX America with false advertising of drug prices to enrollees of Medicare Part D.

The three whistleblowers will be entitled to a percentage of the $5.25 million settlement. Per the False Claims Act, individual citizens that know about wrongdoing committed against taxpayers and file a Qui Tam action on the government’s behalf are entitled to 15-30% of what is recovered during trial or in settlement.


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