AG Zoeller: CVS to pay $400K to resolve illegal billings to Medicaid


Greg Zoeller

Attorney General’s Office investigation results in new pharmacy policy

INDIANAPOLIS – Indiana Attorney General Greg Zoeller’s office has recovered $400,000 for the state’s Medicaid program in a settlement with CVS Stores that resolves allegations CVS pharmacies submitted illegal billings for prescriptions to Medicaid for reimbursement.

Under the out-of-court settlement, Hook-SupeRx, also known as CVS Stores, agreed to pay the state $400,000 and agreed to inform its pharmacists and pharmacy technicians of their obligations required under the Medicaid’s Restricted Card Program or RCP.

“Prescription drug abuse by addicted patients is an epidemic problem in our state so it’s important that pharmacies comply with existing laws for responsible dispensing and billing. Those who submit false billings to the Medicaid program and are paid more than they are due will ultimately be required to repay the State of Indiana,” Zoeller said.

Through the Restricted Card Program, Medicaid patients whose drug usage indicates abuse are given limited access to prescriptions and only certain physicians are permitted to prescribe medications for them. Under the RCP, pharmacies typically will not receive reimbursement from Medicaid if a designated physician has not ordered the prescription for an RCP patient.

The Attorney General’s Medicaid Fraud Control Unit investigated allegations that certain CVS pharmacy stores circumvented the Restricted Card Program by filling prescriptions not written by RCP-designated physicians and submitting claims to Medicaid that falsely identified the prescribing doctors as being designated so that Medicaid would pay for the drugs. Claims submitted by various CVS pharmacies in Indiana were reviewed by MFCU for possible civil violations of the False Claim Act and other state laws. The settlement agreement encompasses claims CVS submitted from January 2001 to the present.

The $400,000 settlement announced this week resolves the allegations without CVS admitting liability and allows the state to recoup its ineligible reimbursement costs and investigation costs. CVS must institute a written policy program for its store pharmacists and pharmacy technicians to become compliant with the Restricted Card Program, now called the Right Choices Program.

Zoeller chairs the state’s Prescription Drug Abuse Task Force that has reviewed various issues regarding drug-seeking patients obtaining addictive prescription drugs to abuse or re-sell. Legislation recommended by the task force to create tighter oversight of pain-management clinics that prescribe drugs, Senate Bill 246, is currently pending before the Indiana General Assembly.

The Attorney General’s Medicaid Fraud Control Unit (MFCU) investigates ineligible claims submitted to the Medicaid program for reimbursement and takes legal action to recover funds. The public can report suspected Medicaid fraud or patient abuse or neglect by calling MFCU toll-free at 1-800-382-1039.