Oklahoma wins reimbursement in Medicaid fraud case

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Oklahoma recoups $3.8 million in Medicaid fraud money recovered from federal prescription drug price investigation, as several states begin to take a closer look at how managed care administrators charge for pharmaceuticals. (Photo by National Cancer Institute via Unsplash)

Oklahoma recoups $3.8 million in Medicaid fraud money recovered from federal prescription drug price investigation, as several states begin to take a closer look at how managed care administrators charge for pharmaceuticals.

Attorney General John O’Connor announced Tuesday that Oklahoma has joined the other 49 states; Washington D.C.; Porto Rico; and the federal government in a $233.7 million settlement with Mallinckrodt ARD LLC, formerly known as Questcor Pharmaceuticals.

The company was found to have inflated prescription drug prices from 2013 to 2020 by circumventing Medicaid rules designed to curb steep price increases. If a manufacturer increases the price of a drug faster than the rate of inflation, Medicaid rules require the company to pay Medicaid a rebate for the amount of the increase that exceeds the rate of inflation.

Mallinckrodt avoided paying the rebate by treating his drug HP Acthar Gel as a new drug recently approved by the United States Food and Drug Administration, despite being first introduced in 1952. As a new drug , the price could not be compared with the previous one. years to show how much and how quickly the price of the drug had increased.

The settlement resolves allegations that Mallinckrodt knowingly underpaid Medicaid rebates.

“My office will always investigate those who defraud our state’s health care and Medicaid system,” O’Connor said. “I applaud our Medicaid Fraud Enforcement Unit for consistently prosecuting those who attempt to endanger the health and well-being of Oklahomans.”

This case came to light following a lawsuit originally brought by a whistleblower in the US District Court for the District of Massachusetts. A team from the National Association of Medicaid Fraud Control Units, which included representatives from the state attorneys general offices of California, Florida, Massachusetts, Michigan, Nevada, New York, Texas and Wisconsin, conducted settlement negotiations on behalf of the States. Oklahoma Assistant Attorney General Christopher Robinson coordinated the settlement on Oklahoma’s behalf.

Earlier in June, O’Connor’s office announced a $363,000 settlement with a former Oklahoma-based company, Tri State Medical Supplies, to resolve allegations that the company inflated prices and fees. shipping durable medical equipment.

Oklahoma is one of at least 13 states that have launched investigations into how Medicaid dollars are handled in the past four years. Many of these cases involve drug reimbursement, particularly where health insurers serving Medicaid members contract with drug benefit managers, companies that administer prescription drug benefits on behalf of insurers. -sickness.

In March 2022, the Oklahoma Department of Insurance agreed to a $4.8 million settlement with PBM CVS Caremark for violation of Oklahoma’s Pharmacy Patient’s Right to Choice Act, alleging that the company had improperly collected transaction fees from pharmacies for Medicare Part D and ERISA plan claims.

However, the settlement is pending while the courts assess whether certain provisions of Oklahoma’s federal Patient’s Right to Pharmacy Choice Act are preempted by federal law. Lobby group Pharmaceutical Care Management Association challenged the law in September 2020; the case is currently pending in the Western District of Oklahoma.

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