CVS Caremark Issues Statement on Settlement Concerning Retail Pharmacy Reimbursements for Certain Medicaid Patients

WOONSOCKET, R.I., April 15, 2011 /PRNewswire/ -- CVS Caremark announced today that it has reached a settlement agreement with the U.S. Department of Justice, the Office of Inspector General of the Department of Health and Human Services, and a number of state Attorneys General to resolve a civil complaint concerning how its CVS/pharmacy retail pharmacies submitted reimbursement claims in certain states for prescriptions filled for "dual eligible" patients who have coverage under both Medicaid and a third party insurance plan.  Pursuant to the agreement, the Company has expressly denied engaging in any wrongful conduct and has settled the matter to avoid the expense and uncertainty of protracted litigation. 

CVS/pharmacy did not intentionally overcharge any state Medicaid program.  The Company regularly receives reimbursement from Medicaid and believes it is in compliance with each state's billing requirements for dual eligible patients.  Dual eligible patients with third party insurance coverage comprise a small percentage of the Medicaid patient population and this matter involves only certain state Medicaid programs.   The settlement involves the CVS/pharmacy retail business only and does not involve CVS Caremark's PBM or Medicare Part D businesses.

The settlement calls for payment by the Company of an aggregate amount of $17.5 million to be allocated among the federal government and ten participating states, which include Alabama, California, Florida, Indiana, Massachusetts, Michigan, Minnesota, New Hampshire, Nevada and Rhode Island.  This payment amount has been fully accrued for in prior fiscal periods and is not material.

CVS Caremark is committed to ensuring its business operations are in compliance with the law and adhere to the highest ethical standards.  The Company continues to work with the government to reconcile the complicated billing processes for dual eligible patients, which vary based on each state's Medicaid program, to ensure compliance with all reimbursement regulations.

About CVS Caremark

CVS Caremark (NYSE: CVS) is the largest pharmacy care provider in the United States with integrated offerings across the entire spectrum of pharmacy care. We are uniquely positioned to engage plan members in behaviors that improve their health and to lower overall health care costs for health plans, plan sponsors and their members. CVS Caremark is a market leader in mail order pharmacy, retail pharmacy, specialty pharmacy, and retail clinics, and is a leading provider of Medicare Part D Prescription Drug Plans. As one of the country's largest pharmacy benefits managers (PBMs), we provide access to a network of approximately 65,000 pharmacies, including more than 7,100 CVS/pharmacy(R) stores that provide unparalleled service and capabilities. Our clinical offerings include our signature Pharmacy Advisor(TM) program as well as innovative generic step therapy and genetic benefit management programs that promote more cost effective and healthier behaviors and improve health care outcomes. General information about CVS Caremark is available through the Company's Web site at http://info.cvscaremark.com/.

SOURCE CVS Caremark