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CMS Lifts Sanction on CVS Drug Plan

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The festive season is bringing good tidings for CVS Caremark Corporation (CVS - Free Report) , with the Centers for Medicare and Medicaid Services (CMS) lifting sanctions imposed against the former’s SilverScript drug plan aimed at senior citizens. The company can now resume enrolling members for SilverScript effective Jan 1, 2014.

On Jan 15, 2013, CMS had imposed an immediate sanction on SilverScript Part D Prescription Drug Plan, forbidding CVS to market or sell any new drug plans. However, the enrollment suspension applied only to the company's Medicare drug plans and did not include other CVS Caremark plans or coverage.

The ban was imposed following the federal healthcare agency’s receipt of complaints regarding enrollment, claims processing and customer call-center operations.

The widespread data system failure resulted in thousands of senior citizens being unable to get their medications on time. The ban was a serious threat for the company as it meant that no new enrollments could take place, though existing SilverScript members could continue with their prescriptions getting filled at CVS retail drug stores.

In the suspension letter, CMS has asked CVS Caremark to undertake remedial actions to address the issues without delay.  Subsequently, CVS Caremark put its best foot forward, making honest attempts to look into the enrollment processing issues to provide customers with improved service and support.

Last week, owing to CVS Caremark’s correctional efforts, the company received the permission to start marketing and enrollment in the SilverScript Medicare Part D Prescription Drug Plan (PDP).

CVS Caremark currently has a Zacks Rank #3 (Hold). Better-ranked stocks in the sector include McKesson Corporation (MCK - Free Report) carrying a Zacks Rank #1(Strong Buy), Align Technology Inc. (ALGN - Free Report) and Herbalife Ltd. (HLF - Free Report) each carrying a Zacks Rank #2 (Buy).

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