While the summer lends itself to often-needed vacations, the U.S. District Court for the Eastern District of Pennsylvania has been hard at work. On June 25, Chief U.S. District Judge Mitchell Goldberg handed down a $95 million judgment against CVS Caremark Corp., CVS Health Corp.'s pharmacy benefits manager, for overbilling the government for Medicare Part D sponsored drugs.[1] The court's bench trial order culminated a decade of ongoing litigation.
In 2014, relator Sarah Behnke filed a qui tam action, U.S. ex rel. Sarah Behnke v. CVS Caremark Corp., alleging that Caremark, a pharmacy benefits manager, or PBM, violated the False Claims Act by causing Medicare Part D plan sponsors — health insurers that offer Medicare Part D coverage — with which it contracted to misrepresent to the government the amount they paid for prescription drugs on behalf of Medicare beneficiaries.
In other words, Caremark — through its contracted Medicare Part D plan sponsors — reported higher costs of drugs to the government than what it actually paid its contracted pharmacies as reimbursement for the Medicare Part D drugs they dispensed.
According to Judge Goldberg's 105-page opinion, the relator was the head Medicare Part D actuary for Aetna Life Insurance Co., which contracted with Caremark to become the insurer's PBM at the time she brought this lawsuit.
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