For Immediate Release - April 19, 2011

AG Coakley Secures $9 Million in Settlement with CVS

BOSTON - CVS Pharmacy Inc. (CVS) has agreed to pay $9 million to the Commonwealth after an investigation revealed the company had overcharged the Massachusetts Medicaid Program (MassHealth) for prescription drugs, Attorney General Martha Coakley's Office announced today.

"The Massachusetts Medicaid Program provides critical health care services to thousands of Massachusetts residents," said AG Coakley. "Our office is focused on rooting out waste and abuse and recovering money on behalf of taxpayers to ensure that companies are not overcharging the Commonwealth for prescription drug costs."

The settlement is the result of a whistleblower lawsuit filed in federal court in Wisconsin on behalf of the United States, Massachusetts and nine other states. AG Coakley's Medicaid Fraud Division undertook an extensive investigation which focused on allegations that CVS failed to follow MassHealth's pharmacy "third-party liability" regulations 130 CMR 450.317. These regulations require, for any MassHealth recipients who also have an insurance plan that provides prescription drug coverage, that pharmacies bill MassHealth no more than the amount the recipient would have been obligated to pay had the insurance claims been submitted solely to the third-party insurer. CVS is a MassHealth provider.

The settlement agreement also requires CVS to comply with an amended Corporate Integrity Agreement with the Office of the Inspector General of the United States Department of Health and Human Services intended to prevent a recurrence of its conduct.

MassHealth provides funds for health care goods and services for eligible low-income individuals, including elder citizens, children and people with disabilities.

Since 2007, Attorney General Coakley's Office has recovered more than $205.2 million on behalf of the Commonwealth's Medicaid program.

The case was handled by Assistant Attorneys General Nancy Maroney and Steven Hoffman with the assistance of Investigator Anthony Megathlin, all of Attorney General Coakley's Medicaid Fraud Division, and with the assistance of the MassHealth Provider Compliance Unit.

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