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