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In re Caremark International Inc.
Citation:698 A. 2d 959 (Del. Ch. 1996).
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- The Brief Prologue provides necessary case brief introductory information and includes:
- Topic: Identifies the topic of law and where this case fits within your course outline.
- Parties: Identifies the cast of characters involved in the case.
- Procedural Posture & History: Shares the case history with how lower courts have ruled on the matter.
- Case Key Terms, Acts, Doctrines, etc.: A case specific Legal Term Dictionary.
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- The Case Brief is the complete case summarized and authored in the traditional Law School I.R.A.C. format. The Pro case brief includes:
- Brief Facts: A Synopsis of the Facts of the case.
- Rule of Law: Identifies the Legal Principle the Court used in deciding the case.
- Facts: What are the factual circumstances that gave rise to the civil or criminal case? What is the relationship of the Parties that are involved in the case. Review the Facts of this case here:
Caremark was created in 1992. Caremark and its predecessor entered into various agreements with hospitals, physicians, and healthcare providers. It also entered into distribution agreements with drug manufacturers. Beginning as early as 1989, Caremark’s predecessor issued an internal document (“Guide to Contractual Relationships”) stating that it was Caremark and its predecessor’s policy that no payments be made in exchange for or to induce patient referrals. A prohibition on quid pro quo behavior, however, was not clear in the guidelines.
In August 1991, an investigation into Caremark’s predecessor was launched. ARPL concerns were raised after referring physicians were also monitoring physicians that received payment of fees from Caremark pursuant to Quality Service Agreements. As a result of the investigation, in October 1991 the company ceased paying management fees to Medicare and Medicaid patients. Thereafter, Caremark’s board took several additional steps to comply with ARPL, including: publishing a revised Guide (April 1992); requiring regional officers to approve all contracts (September 1992); an internal compliance audit conducted by a third party; adoption of new compliance policies and creation of employee ethics handbook despite the positive audit (April 1993); and dissemination of the new ethics handbook as well as a confidential ethics hotline (July 1993).
On August 4, 1994, a Minnesota grand jury issued a 47 page indictment charging Caremark, two of its officers, a sales employee of Genetech, Inc., and a Minneapolis physician with violating ARPL. On September 21, 1994, an Ohio grand jury issued an indictment against a physician for defrauding Medicare and for receiving $134,600 in payments from Caremark for referrals.
- Issue(s): Lists the Questions of Law that are raised by the Facts of the case.
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- Reasoning and Analysis: Identifies the chain of argument(s) which led the judges to rule as they did.
- The Brief Prologue closes the case brief with important forward-looking discussion and includes:
- Policy: Identifies the Policy if any that has been established by the case.
- Court Direction: Shares where the Court went from here for this case.