Best Price Fraud
Medicaid Best Price Fraud
A yes answer to any of the following is likely to involve a Best Price False Claims Act Violation.
a. Did the manufacturer pay Managed Care Organization’s (“MCOs”) kickbacks to have their drug product listed on the MCO’s formulary?
b. Did the manufacturer enter into arrangements with MCOs and/or their PBMs for educational and/or research grants? (Ostensible reasons for the grants can include educating the MCO’s participating providers and/or enrollees regarding medication compliance, chronic disease management, appropriate prescribing of pharmaceutical products, preventative health care measures, and conducting outcome studies on certain enrollee-populations of the MCO.)
c. Were discounts and/or rebates provided to hospitals and other institutional providers reflected off- invoice? Were they hidden from the transaction? Were they disguised as educational grants or some other phony purpose?
Note: In general, the drug benefit designs offered by MCOs to their individual enrollees and group accounts utilize a drug “formulary.” A formulary is a list of the MCOs preferred or recommended prescription drugs. The MCO’s drug formulary is typically developed by a committee of the MCO whose membership often includes licensed pharmacists and physicians. It should be noted that some MCOs outsource the management of the prescription drug benefit, or discrete portions thereof, to pharmacy benefits management companies (PBMs). The delegated activities may include, among other areas, formulary development, formulary compliance, physician drug education, and pharmaceutical manufacturer rebate/discount contracting.
Note: these practices are also relevant to the MCO’s liability with respect to the manner in which an MCO reports or passes through any rebate monies collected, including the adjusted community rate filings submitted to CMS.