Department of Justice Seal Department of Justice
TUESDAY, MAY 31, 2005
(202) 514-2007
TDD (202) 514-1888


WASHINGTON, D.C. - The United States has intervened in a whistleblower suit against Caremark, Inc., a pharmaceutical services company, the Justice Department announced today. Caremark administers pharmacy benefit services for over 1,000 private health plans across the country. The Nashville, Tennessee-based company is responsible for the administration of prescription-related benefits for those clients that offer prescription benefits to employees and/or other covered individuals.

The lawsuit, filed in the United States District Court in San Antonio, Texas under the qui tam or whistleblower provisions of the Federal False Claims Act, as well as several state False Claims Act statutes, alleges that Caremark knowingly avoided or decreased its obligation to reimburse Medicaid and other federal health insurance programs in dual coverage situations. The suit was filed by Janaki Ramadoss, a former employee of Caremark who worked as a quality assurance representative in the company’s paper claims processing department.

Some individuals who receive prescription benefits under private health plans administered by Caremark may also have dual coverage under Medicaid or other federal health insurance program. In such circumstances, coverage under Medicaid or other federal health insurance program is deemed secondary to coverage under the private health plan, unless otherwise provided by federal law. A federal health insurance program that pays a prescription claim for a beneficiary it subsequently learns has dual coverage under a private health plan administered by Caremark may seek reimbursement from Caremark those prescription costs.

The United States and the States of Texas, Florida, Tennessee, and Arkansas have joined the lawsuit and plan to serve their complaint on Caremark within 120 days.

The case is entitled United States and the State of Arkansas, et al., ex rel. Ramadoss v. Caremark Inc., et al., Case No. SA 99CA0914 HG (W.D. Tex.)