The U.S. Department of Health and Human Services’ Inspector General is looking into claims that CVS Caremark (NYSE:CVS) refilled prescriptions and billed Medicare without first obtaining permission from customers, according to the Los Angeles Times.
Sources say the government is scrutinizing Medicare claims submitted by CVS to determine if the company refunded insurance payments for drugs that were refused or never collected by customers.
Word of the investigation follows previous media reports that CVS pharmacists in New Jersey and California were ordered to refill prescriptions without approval and submit claims to customers’ insurance providers.
CVS representatives said the company had not yet been informed of an investigation by the government. Federal officials refused to confirm or deny a probe of CVS practices.
In 2011, the Department of Justice sued CVS, alleging that the chain submitted exaggerated prescription drug bills to Medicaid in ten states. CVS settled with the government, paying $17.5 million, but denied that it had broken the law.
Shares of CVS Caremark fell about 1% in Friday afternoon trading.