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New crackdown targets Medicaid-unapproved drug reimbursements

Several pharmaceutical companies intentionally misrepresented the degree to which certain drugs and other items were reimbursable under Medicaid, according to the attorney general of another state. The drugs and medical devices were marketed to the state and health care providers as covered outpatient drugs despite being unapproved by the U.S. Food and Drug Administration, the AG alleges, and these fraudulent marketing practices resulted in big gains in market share for the companies.

As we have discussed in the past, both the federal government and state Medicaid agencies across the nation are cracking down on Medicare and Medicaid fraud, overpayment schemes, and other issues such as reimbursements for unapproved treatments. Companies found to have violated Medicaid rules may be held civilly liable or criminally charged, in certain circumstances.

According to the attorney general in Mississippi, the state involved in this particular crackdown, several companies were involved in claiming unapproved treatments were reimbursable under Medicaid:

  • Barr Laboratories
  • Barr Pharmaceuticals
  • Copley Pharmaceutical
  • Goldline Laboratories
  • Teva Pharmaceuticals USA
  • Teva Women's Health

Because the marketplace is so complex, the state agency relies upon companies' representations about which drugs' national drug codes are FDA-approved and reimbursable by Medicaid. Therefore, when improper claims were submitted, they were often paid. This resulted in a greater market share for the companies engaging in the allegedly unlawful marketing and submission behavior.

This violated the companies' duty to deal fairly with state agencies, and Mississippi wants them to return all payments for un-reimbursable treatments -- and also to disgorge their ill-gotten profits.

When health care providers, pharmaceutical companies, medical device manufacturers and others work with Medicaid, miscommunication can arise. As the Mississippi AG notes, the marketplace is complex and opaque, and not all miscommunication rises to the level of wanton and willful misinformation. If your organization needs help with a Medicaid issue, don't take the situation lightly.

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