Seven health insurers with companies spread across the nation have been cited in the lawsuit CVS Health Corp., alleging the Woonsocket, an RI-based retail giant schematized with pharmaceutical benefit managers to oversee health plans for generic drugs.
The federal class of insurance lawsuit, filed in Rhode Island district court, represents just one lawsuit accusing CVS of fraudulently paying the real cost of medications, leaving insured customers paying more for drugs than those without them. insurance.
In the case of Rhode Island, insurers — including Carefirst of Maryland, Group Hospitalization and Medical Services, CareFirst BlueChoice, Blue Cross and Blue Shield of South Carolina, BlueChoice HealthPlan of South Carolina, Group Hospitalization and Medical Services, Blue Cross and Louisiana’s Blue Shield and Louisiana-based HMOs are looking to recover what they say they have paid more for “several million transactions” over a decade.
“CVS tried to get her cake and eat it too,” the lawsuit said. “It has tried to find a way to offer long-term discounts to retain critical pharmacy customers, including customers who pay the number, and also avoid the unprofitable result of reporting discounted prices as the usual and usual price.” .
According to the lawsuit, CVS unveiled its Health Savings Pass program in November 2008, which offers a one-time discount for 400 of the most prescribed generic drugs to customers willing to pay a membership fee of just $ 9.99. with therapies for conditions ranging from arthritis to allergies to diabetes. CVS unveiled the initiative as a way to compete with other big-box retailers that were entering the pharmacy business at the time, including Walmart, Target, Costco and even more.
But unlike its competitors, CVS was unable to report the prices of drugs paid through this program to the insurers with whom it had contracted, violating industry and contractual rules that required them to report the “habitual and unfamiliar” rate of their therapies, the cause said.
CVS hiding the cost of its medications is not an accident, it said the cause – the retailer told its vendors not to disclose drug prices through these programs, and consulted its benefit director at Caremark Pharmacy for “[h]should compete on price without disclosing third party contracts. “Because CVS referred only to the rate it contracted with insurers, rather than the cash discount it offers individuals, insurers say they were required to pay a higher rate.
“CVS has now pocketed billions of dollars in meager earnings due to this illegal scheme – including millions of claimants,” the complaint says.
In 2016, “several government agencies” began investigating CVS ’health savings program, the cause said. Fearing that regulators would replace the service with the value-added savings card program, and hired ScriptSave to manage the initiative, the process said. the service works essentially the same way – and does so to this day.
“This is fraud. And CVS has been able to perpetuate and hide this fraud for years,” the complaint says.
Insurers are seeking reimbursement for twice the amount they say they were overcharged by CVS, 12% damages, along with attorney’s fees and costs and damages. This could amount to billions of dollars in penalties – in 2010, for example, the lawsuit alleges that more than 67 million CVS scripts were billed at fraudulently higher rates for a total cost of $ 547 million.
If Rhode Island is not found to be the right place to try the business, insurers claim that CVS practices have violated consumer protection laws in Maryland and Virginia, and violate unfair commercial practice regulations. South Carolina. They say class action could be heard in those places.
CVS, for its part, disputes the insurers ’allegations, saying the prices of the drugs charged through its Health Savings Passes and Savings Charter Products were not the same. available “habitual and habitual” taxes and, therefore, society is not guilty of fraud.
“We have not overruled the plans for the prescribed medicines, and we will vigorously defend against these unfounded allegations, which are completely without merit,” a spokesman wrote in an email.
The Rhode Island case represents only one of at least five other related lawsuits filed against CVS.
Capital BlueCross, Highmark, HealthNow, Horizon Healthcare Services and Blue Cross Blue Shield affiliates in Alabama, Florida, Minnesota, North Carolina, North Dakota and Kansas City have also been quoted to CVS ’for their drug prices.
The dealer is also doing a similar class action by the Local Sheet Welfare and Benefit Fund 20 of Sheet Metal Workers and the Indiana Carpenters Welfare Fund.