A St. Paul pharmacist will receive a $2.6 million settlement payment from CVS Pharmacy after she blew the whistle on Medicaid co-pay overpayments.

The retail pharmacy division of CVS Caremark Corp. agreed last week to pay $17.5 million to settle allegations that it routinely overbilled the government’s Medicaid prescription programs in 10 states, including Minnesota. CVS was allegedly inflating claims for the prescription co-pays that Medicaid picks up for those patients who are primarily covered by private health insurance.

Whistleblower Stephani LeFlore, who started as an overnight pharmacist in 2008, alerted authorities to the alleged overbilling after noticing billing discrepancies in CVS’ customized pharmacy computer system. She called the private health insurers covering the prescriptions to determine the actual co-pay Medicaid patients were supposed to pay. In one example, CVS submitted a claim for $26.75 for a co-pay that was supposed to be $25.

CVS will pay $17.5 million to settle the lawsuit; $7.9 million to the feds and $9.5 million to Alabama, California, Florida, Indiana, Massachusetts, Michigan, Minnesota, New Hampshire, Nevada and Rhode Island. The case was filed in 2008 under the federal False Claims Act.

Hat Tip:  MinnLawyer Blog