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KC-Based Subsidiary Of DST Settles Medicare Fraud Allegations

A subsidiary of Kansas City, Mo.-based software company DST Systems Inc. will pay more than $2 million to settle charges that it fraudulently billed Medicare.

Argus Health Systems Inc. has agreed to pay $2,029,210 to the Office of Inspector General (OIG) for the U.S. Department of Health and Human Services to resolve the case, which involved reimbursement for Medicare Part D drugs.

Medicare Part D subsidizes the costs of prescription drugs and prescription drug insurance premiums for Medicare beneficiaries.

According to the OIG, Argus, a pharmacy benefits manager based in Kansas City, Mo., billed Medicare for sales taxes from Louisiana pharmacies from July 1, 2006 through Dec. 31, 2009, even though Medicare Part D drugs were not taxable in Louisiana at the time.

The Centers for Medicare & Medicaid Services, which administers Medicare, then used those claims to calculate Medicare payments to Part D sponsors with whom Argus contracted, the OIG said.

Argus, a wholly owned subsidiary of publicly traded DST, provides health care information management services to pharmacy benefit managers, managed care companies, insurers and others. It was founded in 1983 and processes more than 500 million prescription drug claims annually, according to published reports.

Company officials did not immediately return phone calls seeking comment.

Dan Margolies has been a reporter for the Kansas City Business Journal, The Kansas City Star, and KCUR Public Radio. He retired as a reporter in December 2022 after a 37-year journalism career.
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