CHARLOTTE, N.C.--()--The Rabon Law Firm, PLLC, and Jackson & McGee, LLP announced today that the U.S. Department of Justice (DOJ) has resolved claims brought against RxAmerica, LLC under the False Claims Act for misrepresentation of drug prices to Senior citizens participating in the Medicare Part D prescription drug benefit program, in a case brought by the firms.
“I was very upset. If it was happening to us, it was happening to others.”
The lawsuits alleged that RxAmerica misrepresented to seniors the cost of prescription drugs on the Centers for Medicare & Medicaid Services (“CMS”) website online tool called the Medicare Prescription Drug Plan Finder (“Plan Finder”). Senior citizens use the online Plan Finder tool to compare the pricing and benefits of different Medicare Part D plans. RxAmerica, a subsidiary of CVS Caremark, has agreed to pay $5,250,000 to resolve the charges of having misrepresented the costs and having submitted false claims to the government.
The Rabon Law Firm PLLC and Jackson & McGee LLP represented Plaintiffs Max and Jan Hauser in one of two lawsuits filed under the False Claims Act alleging that RxAmerica engaged in deceptive pricing in its Advantage Freedom Plan. The Hausers’ False Claims Act lawsuit was filed on behalf of the United States Government in 2009, after the Hausers reviewed their Explanation of Benefits (“EOB”) form, and realized that RxAmerica was charging higher prices for the prescription drugs than had been represented on the Plan Finder tool the Hausers used when they selected their Part D plan. Because the actual drug prices charged to the Medicare program were higher than had been shown by RxAmerica, the Hausers’ Part D benefits were consumed quicker, and Mr. Hauser was forced into the Medicare Part D “donut hole” and had to pay more money out of pocket. When thrown into the Medicare Part D donut hole, seniors have been forced to pay for their prescriptions out of pocket and some indigent seniors and disabled consumers have been forced to go without their much needed medications.
The Hauser lawsuit was consolidated with a similar lawsuit brought by another whistleblower in New York, which was further evidence that the pricing misrepresentations were not a fluke. Both the Hausers and the New York whistleblower were able independently to determine that RxAmerica was charging more money to the Part D Plan consumers than had been represented. Said Mrs. Hauser, “I was very upset. If it was happening to us, it was happening to others.” Mr. Hauser added that the pricing differential between what had been represented and what was shown on his EOB was “astronomical.”
Instead of doing nothing, the Hausers took action by bringing a whistleblower claim under the False Claims Act. Under this law, individual citizens with knowledge of wrongdoing being perpetrated on the taxpayers may bring an action on behalf of the government and share in the recovery. Incentives in the law that reward whistleblowers are an effective tool to battle unlawful conduct. Under the False Claims Act, whistleblowers receive between 15% and 30% of the monies the government recovers when these civil fraud cases are resolved by settlement or trial. The False Claims Act is a powerful weapon against fraud on the government, generating more than $15 in recoveries to the taxpayers for every $1 spent on health care fraud enforcement. For exposing the misrepresentations and false claims, the whistleblowers in these cases will share in a reward of nearly $1 million.
The Hausers were represented by Charlotte attorneys Chet Rabon, of the Rabon Law Firm, PLLC, and Gary Jackson of Jackson & McGee, LLP.
Whistleblowers like the Hausers are critical to the success of anti-fraud programs such as the False Claims Act. “The significant recoveries under the False Claims Act over last few years – now approaching $14 billion dollars since January 2009 – is solid proof that these anti-fraud laws work, and work well,” said Rabon. “The laws are designed to encourage citizens to step forward and pursue these cases through experienced and qualified qui tam attorneys. Ultimately, every single citizen of the United States pays the price when fraud against the government succeeds and, equally, every taxpayer is benefited when government funds obtained through fraud or other false claims activity are recovered to the people,” Rabon continued.
The RxAmerica settlement announced this week is one of the first False Claims Act settlements involving a Medicare Part D Plan, and marks the second successful qui tam case resolved this year by the Rabon Law Firm. The Hausers’ attorneys express thanks to Assistant U.S. Attorney Don Caldwell of the Western District of North Carolina where the case was originally filed, Assistant U.S. Attorneys Paul Kaufman and Gail A. Matthew of the Eastern District of New York, Assistant Director Patricia Hanower of the U.S. Department of Justice, and all the other attorneys, agents, investigators and federal personnel who helped in resolving this False Claims Act case.
Citation for the Hauser case:
U.S. ex rel. Hauser v. CVS Caremark Corp. and RxAmerica (originally filed in the United States District Court for the Western District of North Carolina under Case No. 3:09CV256 (W.D.N.C), and consolidated with U.S. ex rel. Doe v. RxAmerica, Case No. 08-CV-4742 (E.D.N.Y.)).
About the Rabon Law Firm, PLLC
The Rabon Law Firm is headed by attorney Chet Rabon, who has practiced law in Charlotte, NC, for more than 22 years. The Rabon Law Firm concentrates in whistleblower representation under the Federal False Claims Act, other financial fraud whistleblower laws, and companion state acts, and has numerous such cases currently under investigation and in litigation in multiple districts. In addition, the Rabon Law Firm is involved in several catastrophic personal injury and wrongful death cases, and other complex civil litigation.
About Jackson & McGee, LLP
Jackson & McGee, LLP focuses its practice on complex civil trials and litigation. Gary Jackson, with 32 years in practice, is immediate past President of the North Carolina Advocates for Justice (the State’s 4,000-member trial lawyer organization) and has been chosen as one of North Carolina’s “Super Lawyers” in the area of class actions/mass torts every year since the award’s inception in 2006.