parts. Half will cover claims from physi- cians and patients who qualified to be parties to the case but do not have the documentation to show how much Aet- na owes them. It also covers attorneys’ fees and administrative costs. The sec- ond will pay claims from physicians and patients who have the documentation. The agreement, reached last Decem-
ber, calls for a settlement administrator to officially notify physicians of the set- tlement by Dec. 28. The notice will tell physicians what they need to do to file a claim. Claims must be submitted by March 28, 2014. The settlement applies to physicians who were out-of-network providers “at any time” from June 3, 2003, through Aug. 30, 2013, the date the judge preliminarily approved it, and whose claims Aetna did not pay in full. TMA, the American Medical Asso-
ciation, and the medical societies of California, Connecticut, Florida, Geor- gia, North Carolina, New Jersey, New York, Tennessee, and Washington sued Aetna in 2009 over its use of databases licensed from Ingenix, a UnitedHealth Group Inc. subsidiary. Ingenix underpaid physicians for out-of-network services, the lawsuit said.
It also challenged other ways Aetna determined out-of-network payment rates and accused Aetna of failing to disclose how it figured those rates. A pa- tient filed a similar suit in 2007. Aetna, United, and other insurers
agreed to stop using the Ingenix data- base in settlements with the New York State Attorney General in 2009. That settlement created FAIR Health, www
.fairhealth.org, to take over and improve the database and establish transparent, current, and reliable health care charge information.
solve civil Medicaid fraud claims, accord- ing to Texas Attorney General Greg Ab- bott. Also named in the settlement is co- defendant The Harvard Drug Group, LLC. Texas accused Michigan-based Ma- jor Pharmaceuticals of misreporting the price of various generic drugs to the Medicaid program. The action resulted in Medicaid being overcharged for cer- tain Major Pharmaceuticals products. Under state and federal law, drug manufacturers must file reports with Medicaid that disclose the prices they charge pharmacies, wholesalers, and dis- tributors for their products. When man- ufacturers improperly report inflated market prices for their drugs, Medicaid reimburses pharmacies at vastly inflated rates. The difference between the reim- bursement amount and the actual mar- ket price is referred to as the “spread.” The attorney general charged Major Pharmaceuticals with using its illegally created spreads to unlawfully induce pharmacies and other providers to pur- chase the company’s products. Ven-A-Care of the Florida Keys Inc., a pharmacy, first identified the defen- dants’ improper price reporting and sub- sequently filed a whistleblower lawsuit pursuant to the Texas Medicaid Fraud Prevention Act. Texas intervened in the case to re- cover fraudulent overpayments made by the Medicaid program to pharmacies based on the prices reported by Major Pharmaceuticals. The Medicaid Fraud Prevention Act entitles Ven-A-Care to a share of the overall recovery. n
Crystal Zuzek is an associate editor of Texas Medicine. You can reach her by telephone at (800) 880-1300, ext. 1385, or (512) 370-1385; by fax at (512) 370-1629; or by email at
crystal.zuzek@texmed.org.
Texas settles $5 million Medicaid fraud case
Texas and the federal government will equally share in a $5 million settlement with Major Pharmaceuticals Inc. to re-
December 2013 TEXAS MEDICINE 55
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