UNITED STATES DISTRICT COURT
`EASTERN DISTRICT OF TENNESSEE
`AT KNOXVILLE
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`Civil Action No.
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`UNITED STATES OF AMERICA and
`STATE OF TENNESSEE,
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`Plaintiffs,
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`v.
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`WALGREEN COMPANY,
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`Defendant.
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`COMPLAINT OF THE UNITED STATES OF AMERICA
`AND THE STATE OF TENNESSEE
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`This civil action is brought in the name of the United States of America and the
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`1.
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`State of Tennessee (collectively the Plaintiffs), by and through Francis M. Hamilton III, Acting
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`United States Attorney for the Eastern District of Tennessee, and Herbert H. Slatery III, Attorney
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`General and Reporter for the State of Tennessee (State), against Defendant Walgreen Company
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`(Defendant) pursuant to the False Claims Act (FCA), 31 U.S.C. §§ 3729, et seq., and the Tennessee
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`Medicaid False Claims Act (TMFCA), Tenn. Code Ann. §§ 71-5-181, et seq., and common law
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`theories of payment by mistake and unjust enrichment.
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`2.
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`This action arises from Defendant’s submission, or having caused the submission,
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`of false or fraudulent claims for payment to the Tennessee State Medicaid Program (TennCare)
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`for prescription medications. This action also arises from Defendant’s use of false statements, or
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`having caused the submission of false statements, to TennCare insofar as Defendant knew or
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`should have known that the patients’ prior authorization forms and medical records falsely
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`characterized the medical condition of patients in order to obtain TennCare payments that
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`Defendant would not otherwise have received. Finally, this action arises from Defendant’s failure
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`to return the TennCare payments that it improperly received, even after Defendant was made aware
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`that it had billed TennCare and received payment for prescription medications dispensed to
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`individuals who did not meet the clinical criteria for TennCare coverage.
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`3.
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`Defendant operates a specialty pharmacy located in the Holston Valley Medical
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`Center at 130 West Ravine Road in Kingsport, Tennessee (Walgreens #13980, hereafter referred
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`to as the Kingsport Pharmacy), through which these prescription medications were provided.
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`4.
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`Beginning in October 2014 through December 2016, the United States and the State
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`suffered millions of dollars in damages when TennCare paid Defendant for false or fraudulent
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`claims for prescriptions filled at the Kingsport Pharmacy. Defendant was unjustly enriched as a
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`result of the fraudulent scheme, and its knowing retention of those monetary benefits is inequitable
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`under these circumstances.
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`Jurisdiction and Venue
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`5.
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`This Court has jurisdiction under 31 U.S.C. § 3732(a) and (b), and 28 U.S.C. §§
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`1331 and 1345, and 1367(a).
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`6.
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`This Court may exercise personal jurisdiction over Defendant under 31 U.S.C.
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`§3732(a) because Defendant transacts business in this District, and because Defendant submitted
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`claims for payment to the United States and the State of Tennessee for prescriptions filled in this
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`District and it received payments from the United States and the State of Tennessee for those
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`prescriptions.
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`7.
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`Venue is proper in this District under 31 U.S.C. § 3732 and 28 U.S.C. § 1391(b)
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`and (c) because Defendant transacts business in this District and the events giving rise to the causes
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`of action in this complaint occurred in this District.
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`Parties
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`8.
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`Plaintiff United States brings this action on behalf of the Department of Health and
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`Human Services (HHS), which includes the Centers for Medicare and Medicaid Services (CMS).
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`9.
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`Plaintiff State of Tennessee brings this action on behalf of its Medicaid program
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`known as TennCare.
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`10.
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`Defendant Walgreen Company is an Illinois corporation with its headquarters in
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`Deerfield, Illinois. Defendant owns a national chain of pharmacies commonly known as
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`Walgreens. During all times relevant to this Complaint, Defendant owned and operated the
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`Kingsport Pharmacy and provided pharmacy services to TennCare enrollees.
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`The Federal False Claims Act
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`11.
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`The FCA provides, in pertinent part, that a person who:
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`(A) knowingly presents, or causes to be presented, a false or fraudulent claim for
`payment or approval;
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`(B) knowingly makes, uses, or causes to be made or used, a false record or statement
`material to a false or fraudulent claim; [. . .] or
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`(G) . . . knowingly and improperly avoids or decreases an obligation to pay or transmit
`money or property to the Government,
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`is liable to the United States Government [for statutory damages and such penalties as are
`allowed by law].
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`31 U.S.C. §§ 3729(a)(1)(A)-(B), (G) (2010).
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`12.
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`The FCA further provides:
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`the terms “knowing” and “knowingly” –
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`(A) mean that a person, with respect to information –
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`(i)
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`has actual knowledge of the information;
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`(ii)
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`(iii)
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`acts in deliberate ignorance of the truth or falsity of the
`information; or
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`acts in reckless disregard of the truth or falsity of the information,
`and
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`(B) require no proof of specific intent to defraud[.]
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`31 U.S.C. § 3729(b)(1).
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`13.
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`The FCA provides that a person is liable to the United States Government for three
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`times the amount of damages that the Government sustains because of the act of that person, plus
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`a civil penalty of (a) $5,500 to $11,000 per violation occurring between 1999 and July 31, 2016;
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`and (b) $10,781 to $21,563 per violation occurring between August 1, 2016 and February 3, 2017.
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`31 U.S.C. § 3729(a)(1); 28 C.F.R. §§ 85.3 & 85.5.
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`The Tennessee Medicaid False Claims Act
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`14.
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`The TMFCA provides, in pertinent part, that a person who:
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`(A) Knowingly presents, or causes to be presented, a false or fraudulent claim for
`payment or approval under the medicaid program;
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`(B) Knowingly makes, uses, or causes to be made or used, a false record or
`statement material to a false or fraudulent claim under the medicaid program; [. . .]
`or
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`(D) Knowingly and improperly avoids, or decreases an obligation to pay or transmit
`money or property to the state, relative to the medicaid program;
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`is liable to the state for [statutory damages and such penalties as are allowed by
`law].
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`Tenn. Code Ann. § 71-5-182(a)(1)(A)-(B), (D).
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`15.
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`The TMFCA defines “knowing” and “knowingly” to mean that a person,
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`with respect to information:
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`Has actual knowledge of the information;
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`(1)
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`(2)
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`(3)
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`Acts in deliberate ignorance of the truth or falsity of the information; or
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`Acts in reckless disregard of the truth or falsity of the information, and
`no proof of specific intent to defraud is required.
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`Tenn. Code Ann. § 71-5-182(b).
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`16.
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`The TMFCA provides that a person is liable to the State for three times the amount
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`of damages that the State sustains because of the act of that person, plus a civil penalty of not less
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`than $5,000 and not more than $25,000. Tenn. Code Ann. § 71-5-182(a)(1).
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`The TennCare/Medicaid Program
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`17.
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`The federal Medicaid program was enacted under Title XIX of the Social Security
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`Act of 1965, 42 U.S.C. §§ 1396 to 1396w-5, and provides funding for medical and health-related
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`services for certain individuals and families with low incomes and limited or no financial
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`resources.
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`18.
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`The Medicaid program is administered as a joint federal-state program. 42 U.S.C.
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`§ 1396b. If a state elects to participate in the program, the costs of Medicaid are shared between
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`that state and the federal government. 42 U.S.C. § 1396a(a)(2). In order to receive federal funding,
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`a participating state must comply with requirements imposed by the Social Security Act and
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`regulations promulgated thereunder.
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`19.
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`The State of Tennessee participates in the Medicaid program pursuant to Tenn.
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`Code Ann. §§ 71-5-101 to -199. The federal government, through CMS, provides approximately
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`65% of the funds used by TennCare to provide medical assistance to persons enrolled in the
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`Medicaid program, with the balance of the funds coming from the State of Tennessee.
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`20.
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`In return for the receipt of federal funds, the State of Tennessee is required to
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`administer TennCare in conformity with a state plan that satisfies the requirements of the Social
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`Security Act and accompanying regulations. 42 U.S.C. §§ 1396-1396w-5; Tenn. Code Ann. § 71-
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`5-102. TennCare operates as a special demonstration project authorized by the Secretary of the
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`United States Department of Health and Human Services under the waiver authority conferred by
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`42 U.S.C. § 1315. The Tennessee Department of Finance and Administration supervises
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`TennCare’s administration of medical assistance for eligible recipients. Tenn. Code Ann. § 71-5-
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`124. The Department of Finance and Administration is authorized to promulgate rules and
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`regulations to effectuate the purposes of TennCare. Tenn. Code Ann. § 71-5-134.
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`21.
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`At all times relevant to the allegations in this Complaint, TennCare contracted with
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`Magellan Medicaid Administration (Magellan), to oversee the financial, clinical and managerial
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`aspects of the TennCare pharmacy program as the Pharmacy Benefits Manager (PBM).
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`22. Magellan’s duties
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`included
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`the processing and payment of claims for
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`reimbursement for pharmacy services. TennCare Rule 1200-13-13-.04(1)(b)(25).
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`23.
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`In turn, Defendant contracted with Magellan to provide prescription filling
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`activities under the TennCare program. See Walgreen Participating Pharmacy Agreement, attached
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`as Exhibit A.
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`TennCare Reimbursement Requirements
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`24.
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`Under Tennessee law, “TennCare is authorized to implement, either independently
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`or in combination with a state preferred drug list (PDL), . . . prior authorization and step therapy
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`requirements.” Tenn. Code Ann. § 71-5-197(b).
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`25.
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`TennCare requires providers of pharmacy services – including Defendant – to
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`comply with the clinical criteria for the TennCare PDL and with the TennCare Pharmacy Manual.
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`Exhibit A, at ¶ 2.2.
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`26.
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`The PDL is reviewed by the TennCare Pharmacy Advisory Committee. It contains
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`a list of covered prescription drugs, listed by therapeutic category and by preferred or non-
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`preferred status. The PDL is required to be updated at least quarterly. Id. at ¶ 1.19.
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`27.
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`For each prescription medication, the PDL lists the requirements that must be met
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`for the cost of the drug to be covered by TennCare. Some prescription drugs also require prior
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`authorization before they are covered by TennCare, and for such drugs the PDL contains links to
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`prior authorization forms and applicable clinical criteria.
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`28.
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`In order to be reimbursed for a claim for a drug that requires prior authorization per
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`the PDL, the pharmacy services provider must ensure that the prior authorization requirements are
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`met. Id. at ¶ 3.2.
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`29.
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`TennCare, through its PBM, will not pay benefits for claims submitted without
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`prior authorization where one is required or where prior authorization has been denied.
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`30.
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`At all relevant times, TennCare through its PBM Magellan routinely denied
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`payment to pharmacy providers who submitted a claim for a prescription on the PDL when the
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`prescriber had not obtained a required prior authorization.
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`TennCare Coverage for Hepatitis C Medications
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`31.
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`Hepatitis C is a viral infection that attacks the liver and causes degrees of fibrosis
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`that vary among the infected populations. It is spread by contact with contaminated blood, for
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`example, from sharing needles or from unsterile tattoo equipment. Most people have no symptoms.
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`Those who do develop symptoms may have fatigue, nausea, loss of appetite, and the yellowing of
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`the eyes and skin.
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`32.
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`At all relevant times, certain medications that were available for treatment of
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`Hepatitis C from 2014 to 2016 required prior authorization by the PBM Magellan before such
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`medications could be provided to TennCare enrollees. These medications are commonly known
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`as direct acting antivirals (DAAs), and they include Viekira Pak® (National Drug Code [NDC]
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`00074-3093-28), Harvoni® (NDC 61958-1801-01), Sovaldi® (NDC 61958-1501-01), and
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`Daklinza® (NDC 0003-0215-01). At all relevant times, these drugs cost anywhere from $60,000 to more
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`than $90,000 for one 12-week course per Hepatitis C patient.
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`33.
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`At all relevant times, the clinical criteria for the PDL (“PDL criteria”) required that
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`a patient’s medical condition meet certain clinical metrics in order to receive a prior authorization
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`for one of these four prescription drugs. One requirement was that a patient must have a certain
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`level of disease severity based on the amount of fibrosis of the liver. The patient’s fibrosis level
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`could be measured by one of four scoring systems for chronic liver disease:
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`(i)
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`(ii)
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`Metavir score;
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`Fibrotest (FibroSure) score;
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`(iii) Ultrasound based on transient elastography (Fibroscan) score; or
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`(iv)
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`Fibrosis-4 index (FIB-4).
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`34. Metavir scores are reported on laboratory results derived from a liver biopsy and
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`use the values F0 through F4 to note the patient’s fibrosis stage. F0 is the Metavir score that
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`corresponds to the least amount of fibrosis of the liver, indicating no fibrosis. A Metavir score of
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`F4 equates to cirrhosis.
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`35.
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` Fibrotest/Fibrosure scores can be derived from a blood test or radiologic test, and
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`are reported in laboratory results as a decimal figure between 0.00 and 1.00. Fibrotest/Fibrosure
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`scores can also be correlated to fibrosis stages F0 to F4.
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`36.
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`At all relevant times, for prior authorization requests made based on a patient’s
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`disease severity, the PDL criteria for Viekira Pak®, Harvoni®, Sovaldi®, and Daklinza® required
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`that a patient have at least one of the following in order for TennCare to pay for these prescription
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`medications:
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`(i)
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`(ii)
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`Metavir score of at least F3 (advanced fibrosis); or
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`(cid:41)(cid:76)(cid:69)(cid:85)(cid:82)(cid:87)(cid:72)(cid:86)(cid:87)(cid:3)(cid:11)(cid:41)(cid:76)(cid:69)(cid:85)(cid:82)(cid:54)(cid:88)(cid:85)(cid:72)(cid:12)(cid:3)(cid:86)(cid:70)(cid:82)(cid:85)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:149)(cid:3)(cid:19)(cid:17)(cid:24)(cid:28)(cid:30) or
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`(iii) (cid:56)(cid:79)(cid:87)(cid:85)(cid:68)(cid:86)(cid:82)(cid:88)(cid:81)(cid:71)(cid:3)(cid:69)(cid:68)(cid:86)(cid:72)(cid:71)(cid:3)(cid:82)(cid:81)(cid:3)(cid:87)(cid:85)(cid:68)(cid:81)(cid:86)(cid:76)(cid:72)(cid:81)(cid:87)(cid:3)(cid:72)(cid:79)(cid:68)(cid:86)(cid:87)(cid:82)(cid:74)(cid:85)(cid:68)(cid:83)(cid:75)(cid:92)(cid:3)(cid:11)(cid:41)(cid:76)(cid:69)(cid:85)(cid:82)(cid:86)(cid:70)(cid:68)(cid:81)(cid:12)(cid:3)(cid:86)(cid:70)(cid:82)(cid:85)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:149)(cid:3)(cid:28)(cid:17)(cid:24)(cid:3)(cid:78)(cid:51)(cid:68)(cid:30)(cid:3)(cid:82)(cid:85)
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`(iv)
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`Fibrosis-4 index (FIB-4) > 3.25.
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`37.
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`At all relevant times, the PDL criteria for these four prescription medications also
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`required confirmation that the patient was not “actively participating in illicit substance abuse or
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`alcohol abuse,” and that if the patient had “a prior history of substance or alcohol abuse, then
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`patient has been free of substance and alcohol abuse for previous 6 months.” This requirement
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`included submission of supporting documentation such as a recent drug screen.
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`The process to seek prior authorization for these medications in order to receive
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`38.
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`reimbursement by TennCare is, and was at all relevant times, as follows:
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`a. The prescriber determines that a medication on the PDL is necessary to treat a
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`patient’s condition.
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`b. The prescriber answers a series of questions about the patient by checking “yes” or
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`“no” on the prior authorization form for that particular medication.
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`c. The prescriber signs the prior authorization form and submits the form to Magellan,
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`the TennCare PBM, along with the patient’s supporting medical records.
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`d. The PBM evaluates the prior authorization form and supporting medical records to
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`determine if the patient satisfies the coverage eligibility requirements for the
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`prescribed medication.
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`e. If the PBM approves the prior authorization request, the pharmacy may then
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`dispense the medication and file a claim for reimbursement.
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`f. TennCare then reimburses the pharmacy for the prescribed medication cost through
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`the PBM.
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`The False Claims Conduct
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`39.
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`Defendant Walgreen employed Amber Reilly in its Specialty Pharmacy located in
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`the Holston Valley Medical Center in Kingsport, Tennessee.
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`40. Ms. Reilly began working for Defendant on or about September 5, 2009 as a
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`pharmacy intern, then as a pharmacist, and was later promoted to the position of “Registered Store
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`Manager, On Site Pharmacy” for the Kingsport Pharmacy on or about March 2, 2013. As the
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`Registered Store Manager of the Kingsport Pharmacy, Ms. Reilly was a salaried employee of
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`Defendant and was evaluated on a number of factors, including increasing profitable pharmacy
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`sales and her ability to “build more relationships with prescribers/health care professionals to
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`increase pharmacy sales[. . .].”
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`41.
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`In her capacity as Registered Store Manager, Ms. Reilly began visiting physician
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`offices in the region to promote Defendant’s pharmacy services and persuade physicians to refer
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`patients with Hepatitis C to Defendant’s Kingsport Pharmacy. These sales visits to local
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`physicians were referred to as “Details” in Defendant’s corporate culture.
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`42.
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`During at least one visit, Ms. Reilly stated to providers that she had success in
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`getting prior authorizations for Hepatitis C medications approved when other pharmacies could
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`not. Other pharmacies could not get approval because many of the patients did not meet the PDL
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`criteria.
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`43.
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`Based on Ms. Reilly’s representations that Defendant’s Kingsport Pharmacy could
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`obtain approvals for TennCare enrollees with Hepatitis C when other pharmacies could not,
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`physicians and other healthcare providers began sending prescriptions for these TennCare
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`enrollees to Defendant’s Kingsport Pharmacy, along with prior authorization forms and supporting
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`laboratory reports and medical records.
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`44.
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`Upon receiving these medical records and prior authorization forms at the
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`Kingsport Pharmacy, Ms. Reilly, acting in her capacity as Defendant’s pharmacist and Registered
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`Store Manager and to the financial benefit of Defendant, fraudulently and materially falsified,
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`altered, or recreated the TennCare enrollees’ prior authorization forms, medical records, and/or
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`drug test results in order to indicate that the patient was eligible to receive TennCare coverage
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`pursuant to the PDL criteria.
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`45. Ms. Reilly also directed at least one other employee of Defendant to falsify, alter,
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`or recreate TennCare enrollee’s prior authorization forms, medical records, and/or drug test results
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`in order to indicate that the patient was eligible to receive TennCare coverage pursuant to the PDL
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`criteria.
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`46. Ms. Reilly’s conduct took place from October 2014 through June 2016. Defendant,
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`through Reilly, knowingly submitted, and caused to be submitted, materially false information to
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`TennCare for a total of 65 TennCare enrollees who did not meet the PDL criteria for
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`reimbursement. The 65 enrollees consist of enrollees whose initial prior authorization request was
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`denied for failure to meet one or more clinical criteria and other enrollees who did not otherwise
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`meet the clinical criteria for coverage and would have been denied had Ms. Reilly not submitted a
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`falsified prior authorization request and medical records on their behalf. As a result of the
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`submission of false information by Defendant, Magellan authorized Defendant to fill Hepatitis C
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`prescriptions for these 65 TennCare enrollees and paid millions of dollars to Defendant.
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`47. Ms. Reilly first began to falsify medical records in order to fraudulently obtain prior
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`authorization after an encounter with a patient whose prior authorization request had been denied.
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`In that instance, the prior authorization was filed by the patient’s physician. The PBM denied
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`coverage for failure to meet clinical requirements. Ms. Reilly then altered the medical records,
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`falsified the relevant criteria, and refiled the prior authorization, which was subsequently approved.
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`48.
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`Defendant submitted materially false medical lab reports for nearly all of the 65
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`TennCare enrollees. Ms. Reilly, acting in her capacity as Defendant’s Registered Store Manager
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`and to the financial benefit of Defendant, altered—and/or directed another employee to alter—the
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`Metavir score of at least 55 TennCare enrollees who had an actual score below F3. The Metavir
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`scores for these enrollees were changed to F3 or F4.
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`49. Ms. Reilly, acting in her capacity as Defendant’s Registered Store Manager and to
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`the financial benefit of Defendant, altered—and/or directed another employee to alter—the
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`Fibrotest/Fibrosure score of at least 52 TennCare enrollees who had an actual score below 0.59.
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`The Fibrotest/Fibrosure scores for these enrollees were charged to 0.59 or above.
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`50. Ms. Reilly, acting in her capacity as Defendant’s Registered Store Manager and to
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`the financial benefit of Defendant, altered—and/or directed another employee to alter—both the
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`Metavir score and the Fibrotest/Fibrosure score for 48 of 65 patients.
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`51.
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`Additionally, Defendant submitted false drug lab results for at least 12 TennCare
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`enrollees. Defendant’s store manager altered—and/or directed another employee to alter—the
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`drug test for substance or alcohol abuse to falsely report that the patient had tested negative when the actual
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`drug screen reported that the patient had tested positive.
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`52.
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`Defendant also submitted materially false information for at least seven TennCare
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`enrollees to obtain approval specifically for Harvoni®, the most expensive of the four prescription
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`medications. In these cases, Ms. Reilly, acting in her capacity as Defendant’s Registered Store
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`Manager and to the financial benefit of Defendant, falsely stated on the Harvoni prior authorization
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`form that other less expensive drugs had been tried by the patient and failed to treat the patient’s
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`infection.
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`53.
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`After altering the prior authorization forms, Ms. Reilly or someone acting at the
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`direction of Ms. Reilly, would sign the provider’s name without the provider’s knowledge or
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`consent and submit the form to Magellan. Had Magellan known that the prior authorization was
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`falsified by the pharmacy services provider, that the pharmacy services provider falsified one or
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`more clinical criteria for eligibility, and that the prescriber did not approve the falsified prior
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`authorization request, Magellan would not have approved the prior authorization.
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`54.
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`But for Ms. Reilly’s material misrepresentations that these 65 TennCare enrollees
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`satisfied the PDL criteria, TennCare would not have paid millions of dollars to Defendant for the
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`Hepatitis C prescription medications.
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`Patient A1
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`55.
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`By way of example, Defendant—in one
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`such
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`instance—altered
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`the
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`Fibrotest/Fibrosure score on a prior authorization form for Patient A after an initial prior
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`authorization request was denied TennCare coverage for a Sovaldi® prescription. Defendant
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`falsified Patient A’s Fibrotest score and Metavir score, altered Patient A’s prior authorization form
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`1 Patient identities will be provided to Defendant under separate cover.
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`to falsely indicate clinical qualification, and forged Patient A’s prescriber’s signature on the records
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`submitted for appeal.
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`56.
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`Patient A’s original prior authorization request was dated December 15, 2015. The
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`form consists of both biographical information (such as name and date of birth), health and
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`medication history, and clinical eligibility criteria for the Hepatitis C drug. Question 20 in
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`particular seeks information on clinical criteria and asks the prescriber to “check” yes or no
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`whether “the patient has any of” of four liver damage indicators. The prescriber can check whether
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`the patient has “Liver biopsy showing Metavir (cid:86)(cid:70)(cid:82)(cid:85)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:41)(cid:22)(cid:18)(cid:41)(cid:23)(cid:180)(cid:30)(cid:3)(cid:179)(cid:41)(cid:76)(cid:69)(cid:85)(cid:82)(cid:87)(cid:72)(cid:86)(cid:87)(cid:3)(cid:11)(cid:41)(cid:76)(cid:69)(cid:85)(cid:82)(cid:54)(cid:88)(cid:85)(cid:72)(cid:12)(cid:3)(cid:86)(cid:70)(cid:82)(cid:85)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:149)(cid:3)
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`(cid:19)(cid:17)(cid:24)(cid:28)(cid:180)(cid:30)(cid:3)(cid:179)(cid:56)(cid:79)(cid:87)(cid:85)(cid:68)(cid:86)(cid:82)(cid:88)(cid:81)(cid:71)(cid:3)(cid:69)(cid:68)(cid:86)(cid:72)(cid:71)(cid:3)(cid:87)(cid:85)(cid:68)(cid:81)(cid:86)(cid:76)(cid:72)(cid:81)(cid:87)(cid:3)(cid:72)(cid:79)(cid:68)(cid:86)(cid:87)(cid:82)(cid:74)(cid:85)(cid:68)(cid:83)(cid:75)(cid:92)(cid:3)(cid:11)(cid:41)(cid:76)(cid:69)(cid:85)(cid:82)(cid:86)(cid:70)(cid:68)(cid:81)(cid:12)(cid:3)(cid:86)(cid:70)(cid:82)(cid:85)(cid:72)(cid:3)(cid:149)(cid:3)(cid:28)(cid:17)(cid:24)(cid:3)kPa”; and “Fibrosis-4
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`Index (FIB-4) > 3.25.” On the original prior authorization request that the prescriber submitted for
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`Patient A, Question 20 was left unchecked, and none of the four listed conditions were checked.
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`That was an omission that indicated that Patient A did not meet the clinical criteria for eligibility
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`based on disease severity.
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`57.
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`Question 26 also seeks information regarding clinical eligibility criteria. It simply
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`asks, “Does the patient have cirrhosis?” The prescriber checked “No.”
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`58.
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`Patient A’s original prior authorization request form included a lab report from
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`Quest Diagnostic. The report indicated that Patient A received a Liver Fibrosis,
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`Case 2:21-cv-00080 Document 1 Filed 05/10/21 Page 14 of 30 PageID #: 14
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`Fibrotest/Fibrosure score of 0.25, which classified Patient A with a Fibrosis score of F0-F1. A
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`minimum Fibrotest/Fibrosure score of 0.59 or a Fibrosis score of F3 is a clinical requirement for
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`eligibility.
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`59.
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`Based on Patient A’s scores, the patient’s healthcare provider advised Patient A
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`that he “will pprobably [sic] be denied due to fibrosis score (F0-F1).” But the provider
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`nevertheless signed a prior authorization request that accurately stated Patient A’s clinical status
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`under the eligibility criteria for Sovaldi®.
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`60.
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`On December 18, 2015, Magellan issued a Notice of Prior Authorization
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`Determination denying Patient A’s request for coverage of Sovaldi®, explaining that “The patient
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`does not meet the criteria for approval of this medication. . . . Please note TennCare Criteria
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`requires Fibrosis Stage of F3 or F4.”
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`61.
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`On or about December 22, 2015, Patient A’s healthcare provider spoke with
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`Defendant regarding obtaining a Sovaldi® prescription for Patient A. An entry was made in
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`Patient A’s medical records stating, “. . . Walgreens called and stated insurance needs more
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`information to approve the Sovaldi. She said she would take care of it as long as we faxed labs to
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`her.”
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`62. Ms. Reilly received Patient A’s prior authorization records from the provider. Ms.
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`Reilly subsequently altered the prior authorization form, falsified the Quest Diagnostic lab report,
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`forged the provider’s signature, and submitted the falsified documents to Magellan.
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`63.
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`On a second prior authorization form that is dated December 29, 2015, Ms. Reilly
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`checked “Yes” on Question 20 (whereas the original was left unchecked) and also falsely checked
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`that Patient A had a “Fibrotest (Fibro(cid:54)(cid:88)(cid:85)(cid:72)(cid:12)(cid:3)(cid:86)(cid:70)(cid:82)(cid:85)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:149)(cid:3)(cid:19)(cid:17)(cid:24)(cid:28).” On Question 26 (where the provider
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`originally checked “No” to indicate that the patient did not have cirrhosis), Ms. Reilly falsely
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`checked “Yes” that Patient A did in fact have cirrhosis.
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`
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`Case 2:21-cv-00080 Document 1 Filed 05/10/21 Page 15 of 30 PageID #: 15
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`64. Ms. Reilly then signed the provider’s name to the falsified second prior
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`authorization request without the provider’s knowledge or consent to the falsification, while
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`creating the false impression that the request reflected the clinical assessment and judgment of the
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`provider. Reilly then submitted, or caused to be submitted, the second prior authorization request
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`to Magellan, along with supporting lab reports that were falsified to represent that Patient A’s had
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`a NASH fibrosis score of 0.78, and a NASH fibrosis stage of F4.
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`65.
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`Based on the fraudulently altered documents, Patient A was approved for Sovaldi®,
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`and TennCare paid Defendant a total of $84,663 for the prescription medication cost.
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`Patient B
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`66.
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`As another example, the original lab reports for Patient B indicated she had a NASH
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`Fibrosis Score of .04, which corresponds to a fibrosis stage of F0. Based on this score, Patient B
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`did not meet the clinical criteria for benefits coverage for Harvoni®.
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`
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`67.
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`However, Ms. Reilly, acting in her capacity as pharmacist and Registered Store
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`Manager, altered lab reports for Patient B to show that Patient B had a NASH Fibrosis Score of
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`0.58, and a fibrosis stage of F3. Reilly then completed and submitted a prior authorization form
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`to TennCare’s PBM, Magellan, representing that Patient B had fibrosis in the liver corresponding
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`to a Metavir fibrosis score of at least 3. The prior authorization for Patient B was subsequently
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`
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`Case 2:21-cv-00080 Document 1 Filed 05/10/21 Page 16 of 30 PageID #: 16
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`approved, and Defendant received payments totaling $60,474 from TennCare for her prescription
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`medication.
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`
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`Patient C
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`68.
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`In yet another example, Ms. Reilly submitted a second prior authorization form
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`with forged signature, fabricated explanation, and altered medical records and lab results to qualify
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`Patient C for coverage. In this instance, the original liver biopsy report for Patient C, submitted
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`with a prior authorization form dated December 22, 2015, indicated that the Patient had a liver
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`fibrosis stage between 2 and 3.
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`
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`Magellan denied the December 22, 2015 prior authorization request for failure to meet clinical criteria. A
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`Metavir fibrosis score of F3 or F4 was required to qualify for coverage.
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`69.
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`Subsequently, on or about April 5, 2016, a new prior authorization form was
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`submitted for Patient C. Defendant’s store manager, however, altered the accompanying liver
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`biopsy report to make the fibrosis level appear as F3, which would be qualifying.
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`
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`Case 2:21-cv-00080 Document 1 Filed 05/10/21 Page 17 of 30 PageID #: 17
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`70.
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`On or about April 7, 2016, Magellan issued a Notice of Prior Authorization
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`Determination denying Patient C’s request for prior authorization because he “does not meet the
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`criteria for approval of this medication.” The Notice further explained that Patient C’s “Original
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`unalterated Liver biopsy lab result from Highlands Pathology Consultants” placed Pati