Specialty Pharmacy Settles False Claims Act Case for $10 Million and Admits that Representatives Made False Statements to Insurance Companies When Seeking Prior Authorization of Coverage for Costly Drugs

Medicare Part D plans that provide prescription drug coverage require health care providers to obtain “prior authorization,” which means that the plan will cover the cost of the drug only if certain criteria are met. The prior authorization process can be a time-consuming headache for busy medical offices, oftentimes requiring physician and staff involvement in paperwork re-submissions and multiple communications with Medicare Part D plans.

One specialty pharmacy crossed the line when some of its representatives allegedly made false statements to insurance companies when seeking prior authorization of coverage of various costly drugs.

As set forth in the settlement agreement, CareMed Pharmaceutical Services “admitted” that when contacting insurance companies to obtain prior authorization of coverage, some representatives of the company falsely stated that they were calling from the prescribing physicians’ offices and, in some instances, responded to questions seeking the patient’s clinical information based on their understanding of the prior authorization criteria for the particular drug, instead of obtaining the patient’s actual clinical information. CareMed also admitted in the settlement agreement that it had failed to adequately oversee and train staff responsible for the prior authorization process.

Of particular note, the government’s complaint-in-intervention alleges that CareMed took steps to conceal its alleged misconduct by, among other things, installing a caller ID blocking system that prevented its name and location from appearing when outgoing calls were made to insurance companies. The complaint-in-intervention followed a qui tam complaint filed in May 2012 by Panna Nahar, who was employed by CareMed from July 2008 until February 2011 as a “Clinical Care Coordinator.” Her qui tam lawsuit against CareMed settled for $10 million, and she is eligible for whistleblower reward of 15-25% of $10 million.

More information for whistleblowers is located at the Nolan Auerbach & White website.

 

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