The legal fallout from Caremark's previous business activities is continuing.
In one case, a federal judge in Minneapolis granted a motion for a new trial to David R. Brown, M.D., who was convicted last October of receiving $115,000 in kickbacks from Caremark to refer patients to the company's home infusion program.
Jurors in Brown's trial discussed Caremark's settlement with the federal government during their deliberations, and therefore denied Brown his right to an impartial jury, according to a Jan. 11 opinion by U.S. District Judge David S. Doty.
Three other defendants, employees of Caremark and Genentech, were acquitted before Brown was convicted. San Francisco-based Genentech produces the human growth hormone used in the infusion treatment.
A Caremark spokeswoman called the decision a significant and positive development.
Last June, Caremark agreed to pay $161 million to settle charges that it had defrauded the Medicare and Medicaid programs by making improper payments to physicians in return for referrals. Caremark is a subsidiary of Northbrook, Ill.-based Caremark International.
In a separate court action last month, Physician Care agreed to pay $951,000 in restitution to Blue Cross and Blue Shield of Michigan. It will plead no contest to one count of mail fraud and pay an additional fine of $100,000.
The plea agreement stemmed from Physician Care's activities as a partner of Caremark, according to documents filed in U.S. District Court in Detroit. The two companies formed an organization called Physician Health Resources, of which Caremark held the majority ownership interest.
PHR overbilled Blue Cross and Blue Shield of Michigan $4.3 million for pharmaceutical supplies in 1991 and 1992, according to court documents. Caremark's settlement last June exempted it from further government prosecution related to the overbilling but did not protect Physician Care.
Officials of the Michigan Blues declined to comment.
In a separate development, Caremark announced it filed a $150 million lawsuit against Coram Healthcare Corp. in a California court. The action comes two weeks after a federal judge in Chicago dismissed a previous case the company had filed against Coram. In both suits, Caremark claims Coram defrauded Caremark by concealing plans to merge with Lincare Holdings. Coram announced that deal, which later fell through, days after Caremark sold Coram its home infusion unit.