Texas AG recovers $25M in Medicaid fraud case

Texas Attorney General Ken Paxton reached a $25 million settlement in a Medicaid fraud case Tuesday, hauling in $11.25 million for the state.

Under the Texas Medicaid Fraud Prevention Act, the state launched an enforcement action against New Jersey-based pharmaceutical product manufacturer Glenmark Generics for fraudulently reporting inflated drug prices to the Medicaid program since 2005.

In addition to the state’s $11.25 million payout, the settlement agreement requires Glenmark to pay the federal government an additional $11.25 million. The Texas Attorney General’s Office will receive $2.5 million in attorneys’ fees and court costs, boosting the total to $25 million.

“Identifying and preventing Medicaid fraud continues to be a top priority for the Office of the Attorney General,” said Paxton in a statement.

“Thanks to our Civil Medicaid Fraud Division’s conscientious stewardship of the taxpayer-funded Medicaid program, Texas will receive an $11.25 million reimbursement from a New Jersey-based pharmaceutical manufacturer. The Office of the Attorney General will continue cracking down on waste, fraud and abuse in the Medicaid program.”

According to a press release, since 2000, the Texas Attorney General’s Civil Medicaid Fraud team has investigated dozens of pharmaceutical manufacturers for reporting inflated drug prices to the Medicaid program.

In August 2012, the State launched an investigation against Glenmark for possible violations of the TMFPA. The State’s investigation found that since 2005, Glenmark violated Texas law when it illegally misreported prices to Medicaid in order to induce pharmacies and other providers to purchase Glenmark’s products over its competitors’ products.

As a result, Medicaid reimbursed pharmacies more than it should have for certain of Glenmark’s products, according to the press release.

Since 2002, the Civil Medicaid Fraud Division’s recoveries for the state have surpassed the $600 million mark – while total recoveries for the state and federal governments now exceed $1.5 billion.