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June 23, 2022

Around the nation: Lawsuit alleges PBM's 'refill pill mill' defrauded government

Daily Briefing

    A False Claims Act lawsuit filed against Express Scripts alleged that the pharmacy benefit manager (PBM) defrauded the federal government and vendors out of billions of dollars, in today's bite-sized hospital and health industry news from the District of Columbia, Missouri, and Tennessee.

    • District of Columbia: To keep insurers accountable for their commitments to health equity, government entities are considering making the National Committee for Quality Assurance's (NCQA) Health Equity Accreditation mandatory for Medicaid and marketplace plans, which would require insurers who administer the plans to comply with new standards intended to eliminate disparities in the communities they serve. Notably, some states have already moved to implement the requirement. However, some insurers have spoken out against a federal mandate for marketplace issuers, citing expensive operational changes, guidance that is too broad, and unproven effectiveness. Meanwhile, consumer advocacy groups and public entities have said the mandatory accreditation process is necessary to make changes to practices that result in inequity in the health care industry. "The NCQA standards are ambitious, and I think we need some ambition here," said Christine Monahan, assistant research professor and faculty member at the Center on Health Insurance Reforms at Georgetown University. "Health disparities are a real problem, and we need to be pushing insurers to take more action to solve them." (Hartnett, Modern Healthcare, 6/21)
    • Missouri: In a False Claims Act lawsuit filed against Express Scripts, a whistleblower alleged that the PBM defrauded the federal government and vendors out of billions of dollars by delivering unnecessary prescription drugs to military personnel. The lawsuit, which was filed in 2019 and unsealed on Friday, alleges that the PBM enrolled as many Tricare beneficiaries as possible in its automatic delivery program. In addition, the suit claimed that the company inflated drug costs for payers and patients in its "refill pill mill," which overcharged the military's health insurance plan for unnecessary prescriptions from October 2009 to March 2018. "Express Scripts hid its conduct from [the U.S. Defense Department] and Tricare, causing the United States to purchase additional pharmaceutical products to replenish its prescription drug supply. Consequently, the United States paid Express Scripts and other vendors billions of dollars in excessive dispensing fees and drug-replacement costs," the complaint claims. (Kacik, Modern Healthcare, 6/21)
    • Tennessee: HCA Healthcare on Thursday announced that it would not move forward with the acquisition of five Steward Health Care System hospitals in Utah after the Federal Trade Commission (FTC) on June 2 filed a lawsuit to block the transaction. The acquisition would have decreased the number of health systems that offer acute services from three to two in certain markets, Modern Healthcare reports. According to FTC, the acquisition would have ended Steward's ability to be a direct competitor while increasing HCA's bargaining power with insurers, which would have resulted in higher prices that would have been passed onto consumers through increased premiums, deductibles, and out-of-pocket costs. "This should be a lesson learned to hospital systems all over the country and their counsel: the FTC will not hesitate to take action in enforcing the antitrust laws to protect healthcare consumers who are faced with unlawful hospital consolidation," said Holly Vedova, director of the FTC's bureau of competition. (Kacik, Modern Healthcare, 6/17; Herman, STAT News, 6/17)

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