CVS Caremark hit with $289M judgment following whistleblower claim
A lawsuit filed against CVS Health by a whistleblower has resulted in a $289 million judgment, which includes $285 million in actual damages and a $4.9 million civil penalty.
The healthcare giant’s pharmacy benefit manager (PBM) vertical, CVS Caremark, was found to have pressured insurance companies to upcode claims submitted to Medicare plans, leaving the federal government on the hook for inflated reimbursement costs.
The whistleblower, Sarah Behnke, was an employee at Aetna during some of the incidents, which resulted in her filing a complaint accusing the company of violating provisions of the False Claims Act.
The lawsuit was settled for $95M in late June, resolving claims of misconduct that date back to 2010. However, that amount was tripled—per rules within the False Claims Act—by a U.S. District Court in Pennsylvania.
In issuing a final judgment on Tuesday, Judge Mitchell Goldberg said evidence presented at trial showed Caremark committed the acts of fraud deliberately, and was “financially motivated” to do so.
However, the court only found the PBM liable for two years of overbilling, per terms of the settlement. The initial lawsuit was filed in 2014, meaning CVS did not own Aetna at the time the complaint was filed.
Erosion of public trust
Goldberg said the company’s actions damage the public perception of federal healthcare programs—mainly Medicare Advantage, and by proxy the Centers for Medicare & Medicaid Services (CMS).
“CMS relies on companies like Caremark to truthfully and accurately report Part D drug prices,” Goldberg added. “Caremark’s conduct broke CMS’s trust, and as a result, the public’s trust in CMS.”
He accused the company of demonstrable “fraud and concealment” in defending the $289 million penalty.
CVS Health denied any wrongdoing and said it intends to appeal the ruling.
Chad is an award-winning writer and editor with over 15 years of experience working in media. He has a decade-long professional background in healthcare, working as a writer and in public relations.