Whistleblower Sarah Benke recently testified in a False Claims Act bench trial that Caremark, which is a pharmacy benefits manager (PBM) for Aetna Life Insurance Co., overbilled Medicare Part D for sponsored prescription drugs. She estimated that the CVS-owned PBM caused $240 to $330 million in damages by billing Medicare for reimbursement amounts that were higher than it paid pharmacies for the covered drugs.
Caremark argued that the pharmacies can keep the difference when it overpays pharmacies for certain drugs subject to its generic effective date (GER). However, Benke said those cases were rare, stating that Caremark always used the budgeted GER or a number close to it. Caremark also claimed that it had not done anything wrong, as shown by the failure of the federal government to file an enforcement action when the whistleblower claims came to light.
Furthermore, Caremark argued that their employees acted in good faith, believing they were doing the right thing. The PBM claims no evidence shows that it knowingly submitted false billing claims, as Part D drug prices are often higher than commercial insurance plan drug prices.
Benke initially filed her suit in 2014 after working as a Part D head actuary for Aetna, which contracted with Caremark as its PBM. She claimed that Caremark charged Part D significantly more than what similar Part D sponsors charged for the same medicines. The case is U.S. ex rel. Sarah Behnke v. CVS Caremark Corp. et al., case number 2:14-cv-00824, U.S. District Court for the Eastern District of Pennsylvania.
Last summer, Caremark asked the judge to certify an interlocutory appeal of a ruling over the interpretation of whistleblower regulations. The judge declined the request, stating that the appeal process would further delay the years-long litigation involving technical subjects and voluminous pleadings and exhibits.
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