Two Blue Cross Systems File Suit Against TAP Pharmaceuticals Alleging Medicare Overpayments
Empire Healthchoice Inc., New York state's Blue Cross system, filed suit against TAP Pharmaceutical Products Inc. on Jan. 3 to recover alleged overpayments in a "complex Medicare fraud scheme," the Boston Herald reports. The suit claims that TAP, a joint venture between Abbott Laboratories and Takeda Chemical Industries Ltd., overcharged the insurers for the prostate cancer drug Lupron (Powell, Boston Herald, 1/4). Last October, TAP settled an $875 million Medicare and Medicaid fraud case, the largest criminal fine ever levied by the government for health care fraud. As part of the settlement, TAP pleaded guilty to conspiracy to violate the Prescription Drug Marketing Act and settled civil cases with the federal government, all 50 states and the District of Columbia. Prosecutors alleged that TAP had artificially inflated Lupron's average wholesale price -- the price reported to the government by drug makers and used to set Medicare and Medicaid reimbursement rates -- in order to increase sales and profits. They said that TAP sold Lupron to physicians for about $100 to $150 less than the AWP per one-month dose and encouraged them to bill the government and other insurers for the remainder. TAP also allegedly offered doctors as much as $70,000 in free drug samples and told them to bill payers as if they had purchased them, a violation of federal law (
Kaiser Daily Health Policy Report, 10/4/01). Last year's settlement with the government did not include alleged overpayments made by Empire Healthchoice or "other third-party payers" through Medicare and Medicare managed care programs. Empire is seeking to recover inflated copayments and deductibles it says it paid to TAP through Medicare and damages resulting from the overpayments (Boston Herald, 1/4).
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