Florida Joins $36.7 Million Settlement With CVS Over Improper Billing

Nationwide settlement addresses dosage switching of generic antacid

March 18, 2008 -- TALLAHASSEE, FL - Florida Attorney General Bill McCollum announced today that the Florida Medicaid program will receive more than $186,000 from a $36.7 million multistate settlement with CVS and Caremark Corporation. The settlement with the United States, 23 states and the District of Columbia resolves allegations that CVS violated various state and federal statutes and regulations by switching dosage forms of an antacid medication commonly prescribed for Medicaid patients. Florida’s civil case was handled by the Attorney General’s Complex Civil Enforcement Bureau (CCEB) which is part of the Medicaid Fraud Control Unit.

“The State of Florida will ensure that Medicaid services are not undermined by the greed of others,” said Attorney General McCollum. “The Attorney General's office will not tolerate actions perpetrated against our Medicaid program and its recipients.”

The settlement follows a joint federal and state investigation into allegations that CVS switched Medicaid recipients’ dosages of ranitidine, a generic form of Zantac which is a commonly prescribed anti-ulcer medication. The investigation showed that these switches caused Medicaid programs nationwide to reimburse CVS substantially more than otherwise necessary. Additionally, the switching of the dosages from April 1999 through 2006 violated various federal and state statutes and regulations.

The substitutions allegedly violated Florida’s pharmacy laws which require that drugs must be validly prescribed and that the same dosage form and strength is necessary for valid substitution and/or drug equivalency. CVS was also alleged to have violated Florida’s state Medicaid requirements for pharmaceutical cost-savings and pharmaceutical medical necessity by filling prescriptions with the switched dosage form.

In addition to paying the $36.7 million to the state and federal governments, CVS has agreed to the terms of a Corporate Integrity Agreement (CIA) with the Office of Inspector General of the United States Department of Health and Human Services. The agreement will include provisions to ensure CVS does not switch dosage forms of medications if the result would increase the cost to third-party payers, including Medicaid.

The settlement was the result of negotiations jointly conducted by the United States Attorney’s Office for the Northern District of Illinois and the National Association of Medicaid Fraud Control Units. CVS currently operates retail pharmacies in 38 states.

Source: Florida Attorney General

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