Ohio Attorney General Dave Yost says email shows OptumRx was overcharging the state – and knew it

According to this article https://community.aarp.org/t5/Medicare-Insurance/Avoid-Optum-RX-Worthless/m-p/2360940 OptumRx is the entity along with United Health that is endorsed by AARP .  One  has to wonder if the royalties that AARP gets from allowing United Health/OptumRx to use AARP’s name and AARP’s endorsement is more important than the actual good service that is provided to AARP members ?

Ohio Attorney General Dave Yost says email shows OptumRx was overcharging the state – and knew it

https://www.dispatch.com/story/news/healthcare/2020/12/27/ohio-dave-yost-says-pbm-optumrx-overcharges-shown-email-bureau-of-workers-compensation-suit/4028221001/

Ohio Attorney General Dave Yost’s office says it may have uncovered evidence in a court battle to show that a pharmacy benefit manager knowingly overcharged a state agency

Among hundreds of thousands of emails obtained from PBM OptumRX as part of the litigation was one that appears to acknowledge that the multibillion-dollar corporation was not following the terms of its contract with the Ohio Bureau of Workers’ Compensation.

Starting with its predecessor, a company called Catamaran that OptumRX acquired, the PBM administered prescription drugs for workers injured on the job. In all, OptumRX overcharged the bureau on more than 1.3 million claims for generic medications, the lawsuit says.

The contract, in effect from mid-2009 until the fall of 2018, called for the PBM to charge the lowest of four potential prices for generic drugs, including a measure from the Centers for Medicare and Medicaid known as the Federal Upper Limit, or FUL for short.

A key portion of an Ohio Bureau of Workers' Compensation contract with its pharmacy benefits manager is contained on Page 103 of a 110-page document. To establish the cost for generic drugs, the PBM is supposed to use the lowest of  four prices. But an email from the PBM indicates it was not considering one of those four: the Federal Upper Limit (FUL) as established by the Centers for Medicare and Medicaid.

But in a series of May 2015 emails marked as “confidential,” John Spankroy, director of public sector account management for Catamaran, said the Federal Upper Limit was never applied, despite the contract. 

He told Susan McCreight, senior director of public sector account management, “Per BWC contract we are supposed to be using pricing logic that includes lower of FUL for generics. None of the BWC price schedules has FUL as a cost source.” 

In a separate email, Spankroy told Bryce Owens, the Illinois-based PBM’s manager for pricing and analytics, “We do not see FUL included as a cost source option.”

Spankroy also acknowledged: “BWC is not aware of this (yet).”

This email from a top official at the pharmacy benefit manager Catamaran - later taken over by OptumRX -  says the PBM is not adhering to a contract with the Ohio Bureau of Workers' Compensation requiring use of a factor called the Federal Upper Limit to help determine the cost of generic prescriptions drugs to the state.

“The admission is highly relevant” to the central issue in the legal dispute: “whether OptumRX was required to follow the pricing terms included in the BWC contract,” said Yost’s legal team in a Dec. 16 court filing.

But Andrew Krejci, who is with Optum’s corporate communication office, says the  federal FUL requirement was never part of the PBM’s agreement with the state.

“The plain language of the contract demonstrates that the lesser-of reimbursement methodology, which was agreed upon and utilized by the parties over the course of their almost decade-long relationship, incorporated three reimbursement options and CMS FUL was never one of them,” OptumRx said in a court filing.

More: Drug middleman fires back in workers’ comp suit

Krejci said, “We are honored to have delivered access to more affordable prescription medications for the Ohio Bureau of Workers’ Compensation and Ohio taxpayers. We believe these allegations are without merit.”

The bureau dropped OptumRX more than two years ago after a consultant determined the PBM was vastly overcharging the state.

The same consultant later discovered that PBMs — including OptumRX — in Ohio’s Medicaid program, which pays for health care of the poor and disabled, were charging three to six times the standard rate, enabling them to take home nearly $250 million in a single year.

According to the lawsuit, which seeks unspecified damages, OptumRx overcharged the bureau on 57% of 2.3 million prescription claims from injured Ohio workers between January 2014 and September 2018.

The case is before Judge Michael Holbrook of Franklin County Common Pleas Court.

drowland@dispatch.com

@darreldrowland

3 Responses

  1. United Health is a scam. Bad faith. It’s disgusting

  2. I’ve yet to see any way that an actual Retired Person can communicate with AARP about anything that matters. AARP leadership decide what they want to promote and “members” have to like it, or else quit. The money for all that AARP advertising has to come from somewhere…and now we see where!

  3. I have found United Health to be disreputable. I will not use an insurance company that has anything to do with them. And the way AARP spams anyone approaching 50 (lol- like 30) with ads I have no use for them either.

    In other words. I am not surprised.

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