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CareFusion pays Washington for Medicaid fraud allegations | Washington state Attorney General

Attorney General Bob Ferguson announced today that Washington has joined with other states and the federal government in a global settlement with CareFusion, a manufacturer of medical and surgical supplies and medical devices.

The settlement resolves civil allegations of unlawful marketing practices and the payment of kickbacks for promoting sales of CareFusion’s surgical preparation solution, Chloraprep.

“When businesses commit Medicaid fraud, it leaves less money to provide health care to vulnerable patients,” Ferguson said. “The Attorney General's Medicaid Fraud Control Unit will continue to pursue bad actors to recover funds.”

Washington to receive $229,440

Under the terms of the civil settlement, CareFusion will pay a total of $40.1 million to the states and the federal government. Washington’s total share of the settlement is $229,440 with nearly $109,448 returning directly to the state Medicaid program. Another $119,992 will be returned to the federal government for its share of Washington’s Medicaid program. The federal government matches state funds to support the Medicaid program in Washington.

Allegations against CareFusion

CareFusion, a corporation spun off from Cardinal Health in 2009, allegedly promoted and marketed Chloraprep for uses that were not approved by the Food and Drug Administration (FDA).

Once the FDA approves a surgical solution such as Chloraprep as safe and effective, its manufacturer cannot market or promote it for an ‘off-label’ use, meaning any use not specified in the FDA-approved product label.

Chloraprep was approved by the FDA for specific inpatient hospital procedures, including the preparation of a patient’s skin prior to surgery or injection. The FDA explicitly rejected its use for prepping the skin prior to inserting catheters into veins for administering medications, or cleaning the skin as part of closing wounds.

The lawsuit alleges that during the period between Sept. 1, 2009 and Aug. 31, 2011, CareFusion promoted Chloraprep for these improper uses, which went beyond the FDA approval. CareFusion also allegedly publicized unverified information about Chloraprep during the same time period.

The states further contend that in 2008 CareFusion’s predecessor corporation entered into agreements for which CareFusion assumed legal and financial responsibility. This included payment to an entity known as Health Care Concepts, Inc. (HCC). The payments were allegedly made in order to conceal kickbacks to the physician-owner of HCC, for promoting and influencing providers to use Chloraprep. This violates various federal and state anti-kickback laws.

CareFusion’s alleged unlawful conduct caused false and/or fraudulent claims to be submitted to government funded health care programs, including Medicaid.

A team from the National Association of Medicaid Fraud Control Units (NAMFCU) worked closely with the federal government on the investigation and conducted the settlement negotiations with CareFusion on behalf of the states.

Senior Counsel Carrie L. Bashaw managed the settlement for the Washington Medicaid Fraud Control Unit.

Fighting Medicaid fraud in Washington

The Attorney General's Medicaid Fraud Control Unit is responsible for the investigation and prosecution of healthcare provider fraud committed against the state’s Medicaid program. In addition, the unit coordinates the investigation and prosecution of abuse and neglect involving vulnerable adults residing in Medicaid-funded residential facilities with local law enforcement authorities through a statewide contact network.

  • Report suspected Medicaid fraud: 1-800-562-6906 or send an email to HotTips@hca.wa.gov.
  • You can also report provider fraud via the Attorney General’s Office Web site.

The Department of Social and Health Services Office of Fraud & Accountability investigates client fraud. You can report Medicaid Client Fraud via the Department’s Online Complaint Form, call the Welfare Fraud Hotline at 1-800-562-6906 or send the complaint to Welfare Fraud Hotline, P.O. Box 45817, Olympia, Washington 98504-5817.

 

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