CVS Settles Medicaid Fraud Case

By Margaret Lyons in News on Mar 18, 2008 11:04PM

CVS owes America $36.7 million.

CVS Caremark Corp. agreed today to pay that amount to settle Medicaid prescription drug fraud allegations. The company switched Medicaid patients from the tablet version of Ranitidine, a generic Zantac, to the capsule version. It's not medically different, but it's a lot more expensive. According to the FBI, "during the period Dec. 15, 2000, through April 1, 2001, Caremark charged Illinois Medicaid $79.80 for 60 Ranitidine capsules instead of $17.10 for the tablets, leading to a price difference of $62.70 on a single prescription." Illinois will be getting $241,110.32 in the settlement.

According to CVS's statement, though, they didn't do anything wrong. "The government alleged that the practice of dispensing capsules instead of tablets was motivated by a desire to increase Medicaid reimbursement. The Company has expressly denied this allegation." [FBI press release, CVS press release]