The new owners of Longs Drugs are paying $975,000 to settle a lawsuit accusing that chain of unlawfully firing an employee who alleged that the company fraudulently billed several state Medicaid programs.
The settlement by CVS Caremark Co., which acquired Longs in October 2008, resolves claims made by Haroon Aziz, a former pharmacy technician.
Aziz alleged that he was fired by Longs in March 2008 after confronting managers about fraudulent practices. The 2010 suit alleged that Longs committed the fraud before the acquisition by CVS.
It claimed that Longs stores in California, Colorado, Hawaii, Nevada, Oregon and Washington knowingly billed Medicaid for amounts already covered by insurance companies. If a pharmacy accepts payment in full from a patient’s insurance, it cannot bill state Medicaid programs.
Aziz worked at Longs from 2000 to 2008. Before he was discharged from the Walnut Creek store, he claimed that he had multiple discussions with upper management about the excessive billing, but was told to focus on his job and was never given an explanation. He also alleged that he looked over the false billings with several upper-management employees, but that no one seemed interested in the problem or made attempts to correct it.
“Mr. Aziz was courageous in blowing the whistle, stopping the fraud alleged in the complaint, and fighting to have the state and federal governments repaid,” his attorney, Michael Hirst, said in a statement. “To ensure the integrity of our public programs, we need people to stand for what they know is right, and object to what they know is wrong. It’s gratifying when they are rewarded with that”
CVS made two attempts to dismiss the case, but neither of those motions were granted.
“Per this settlement agreement, the company does not admit any wrongdoing,” CVS spokesman Michael DeAngelis said in a written statement. “The allegations were previously reviewed by the U.S. Department of Justice and the states of California, Hawaii and Nevada and all declined to intervene.”
Before the settlement, the U.S. government could have been entitled to up to $11,000 for each fraudulent claim knowingly made by Longs. California, Hawaii and Nevada could have been entitled to up to $10,000 for each fraudulent claim.
“Although neither the federal government nor the state of California had sufficient resources to
devote to the case, Mr. Aziz believed it was important to recover funds that were wrongfully paid by the government because of Longs’ billings,” Hirst said. “We pursued the case without the government, and on Mr. Aziz’s and the government’s behalf.”
CVS is currently the largest provider of prescriptions and health care in the nation.