News/Events

Says, ‘Small town pharmacies are experiencing financial hardship at the hands of the PBMs’

LITTLE ROCK – Arkansas Attorney General Leslie Rutledge applauds the U.S. Solicitor General for recommending the U.S. Supreme Court hear Arkansas’s case concerning the federal Employee Retirement Income Security Act (ERISA), in which Rutledge seeks to ensure communities do not lose access to frontline healthcare.

“I am pleased the U.S. Solicitor General recommends this case be heard by the U.S. Supreme Court,” Attorney General Rutledge said. “Small town pharmacies are experiencing financial hardship at the hands of the pharmacy benefit managers (PBMs) requiring they operate at a loss or go out of business. I will always protect Arkansans and small businesses from unfair practices and ensure there is prescription drug pricing transparency.”

In 2015, the Arkansas General Assembly enacted Act 900 granting authority to regulate previously unregulated PBMs who verify benefits and manage financial transaction among pharmacies, healthcare payors and patients. Previous to this action, PBMs were found to provide negative reimbursement- reimbursement of pharmacies at less than a pharmacy’s cost to acquire a drug.

Rutledge’s petition to the U.S. Supreme Court comes after a three-judge panel of the 8th Circuit Court of Appeals issued a decision affirming an order by U.S. District Judge Brian Miller that ruled Act 900 was preempted by ERISA.

Wednesday, the U.S. Solicitor General agreed with Arkansas’s argument that the 8th Circuit should not have struck down PBM regulations and that the issues should be heard by the Supreme Court.

The U.S. Supreme Court will next conference to determine whether to formally hear the case in accordance with the U.S. Solicitor General’s recommendation.

Arkansas recovers more than $100,000

LITTLE ROCK – Attorney General Leslie Rutledge announced today that Arkansas, as part of a national settlement, has resolved allegations that Avalign Technologies, Inc. and its subsidiary Instrumed International, Inc. (“Defendants”) violated the Federal and State False Claims Acts. The companies were buying and selling medical devices that were not approved or cleared by the FDA. These unapproved devices were then used by medical providers in medical procedures, and the providers submitted claims for reimbursement to Medicaid. As a result, the Defendants paid the participating states and federal government $9.5 million, of which Arkansas received $76,393.54.

“These companies not only cost government Medicaid programs money, but put patients’ lives at risk,” said Attorney General Rutledge. “The FDA plays a critical role in keeping us safe and ensures, through its approval process, that Medicaid funds are spent appropriately and effectively for the betterment of all Americans and Arkansans.”

The United States, Arkansas and other participating states had previously reached a settlement with CareFusion in which CareFusion agreed to pay a total of $3.3 million to the United States and participating states. The company admitted to selling devices that Instrumed wrongly claimed qualified for the pre-amendment exception to FDA regulations. Arkansas received $26,536.70 in the CareFusion settlement.

Arkansas’s recovery through the national multi-state settlements announced today is $102,930.24.

The suit was filed in the US District Court in the Southern District of New York. A National Association of Medicaid Fraud Control Units (NAMFCU) Team conducted the settlement negotiations with the Defendants on behalf of the states.

Arkansas joins the lawsuits along with Alabama, Arizona, California, Colorado, Connecticut, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin and Wyoming.

Ordered to pay back $64k stolen from Medicaid through illegal claims

LITTLE ROCK – Arkansas Attorney General Leslie Rutledge today announced the conviction of a Benton business owner who fraudulently billed Medicaid more than $64,000 for speech therapy services at a daycare for children who did not attend the daycare and/or did not need speech therapy.

“It is a shame that a person who is licensed to help others is instead manipulating the Medicaid system, and using children’s identities to do it,” said Attorney General Rutledge. “This case proves those attempting to defraud Arkansans will be held accountable.”

Jennifer Rogers, 44, owns Arkansas Therapy Source, LLC. She was convicted of one count of Medicaid Fraud, a Class A Felony, and one count of Theft by Deception, a Class B Felony.

The Office of the Medicaid Inspector General referred the case to the Arkansas Attorney General’s Medicaid Fraud Control Unit (MFCU) after a desk audit of Arkansas Therapy Source, LLC identified potential fraud. The evidence included a physician’s signature that had been cut out and taped to a blank referral form, as well as a lack of progress notes to support services billed to Medicaid. The investigation revealed all of Rogers’ Medicaid billing was from February 2017 to March 2018.

Investigators uncovered 41 instances where speech services were billed to Medicaid. In many cases, Rogers was not living in Arkansas during the time of the billed services. To date, Rogers has made no billing or treatment records available. Rogers was arrested in September 2018 and pleaded guilty Monday. She was ordered to pay $64,000 in restitution and to pay a fine of $51,000 as well as court costs. She also received 5 years of probation.

The Sixth Judicial District Prosecuting Attorney, Larry Jegley, swore in Assistant Attorney General Sean Strode as a Special Deputy Prosecuting Attorney in this case.

Medicaid fraud occurs when Medicaid providers use the program to obtain money for which they are not entitled. To report suspected fraud, contact the Arkansas Attorney General’s Office at (800) 482-8982 or visit ArkansasAG.gov.