Attorney Generals News Release

June 19, 1995

Missouri to receive $1.2 million in Medicaid fraud agreement

Jefferson City, Mo. — A national health care provider will pay more than $1.2 million to Missouri as part of an agreement over claims of kickbacks and overpricing, Attorney General Jay Nixon announced today.

The money is being recovered from Caremark Inc. of Northbrook, Ill., by the Attorney General's Medicaid Fraud Control Unit Unit as part of an agreement in principle of more than $44.5 million with all 50 states and the District of Columbia. The agreement is expected to be finalized within 30 days.

The states and the federal Department of Justice had alleged that Caremark had made kickbacks to physicians and other providers as incentives for referrals and over-utilization of its services. The settlement also covers allegations that Caremark overpriced some services in billing the Medicaid programs of several states, including Missouri.

Caremark provides home IV therapy and drugs, services and therapy for hemophilia and oncology patients, and the distribution of a human growth hormone. The company also provides pharmaceuticals and durable medical equipment in connection with its business.

“This type of fraud drives up the cost of health care for everyone,” Nixon said. “Exposing and punishing Medicaid fraud by health care providers are important steps to real reform of the Medicaid system.

“The Medicaid Fraud Control Unit was established within the Attorney General's Office last year to investigate these fraudulent and unscrupulous activities that cost Missouri taxpayers millions each year,” Nixon said. “This unit has repaid Missouri taxpayers many times over with this settlement and a $3 million settlement last June.”

Nixon said Missouri's share was determined by the amount of money the state Department of Social Services had paid Caremark through the Medicaid program. The federal government has negotiated separately a settlement of more than $116 million with Caremark.

The settlement with Caremark is the second recovery of more than $1 million for the Attorney General's Medicaid Fraud Control Unit. Last June, National Medical Enterprises Inc. of Santa Monica, Calif., agreed to a $41.5 million settlement with Missouri, 26 other states and the federal government for alleged Medicaid fraud in their psychiatric and substance abuse hospitals. Missouri's total share of the settlement was $7.3 million, with $3 million going to the state and the federal government receiving the remainder.

The settlement with Caremark covers corporate liability and does not prevent further investigation into related matters. The agreement also does not exclude Caremark from receiving Medicaid payments for providing legitimate reimbursable services.

Inquiries from consumers should be directed to consumer@ago.mo.gov or 1-800-392-8222 (from within Missouri) or 573-751-3321 (outside Missouri).

All media inquiries should be directed to Press Secretary John Fougere.

E-mail      Phone: 573-751-8844         Fax: 573-751-5818