Insurance Industry Unlawful Prescription Drug Co-Payment Clawback Scheme – Class Action Investigation
Chimicles Schwartz Kriner & Donaldson-Smith LLP (“CSK&D”) is investigating reports of an alleged scheme whereby insurance companies may charge insureds a “co-payment” for a prescription drug that far exceeds the actual cost of the drug to the insurance company. Specifically, it has been alleged that health insurance companies may contract with network pharmacies to charge consumers amounts for prescription drugs that far exceed the actual cost of the drugs, and the insurance company collects or will “clawback” the amount in excess of the cost from the pharmacy.
The alleged scheme proceeds as follows: When the insured purchases a prescription drug from a network pharmacy, the pharmacy collects a “co-payment”. For certain prescription drugs, the “co-payment” may exceed the price agreed to be paid by the insurance company to the pharmacy for the prescription drug. Therefore, the co-payment collected at the point of purchase is an overcharge that the insurance company is not entitled to under the terms of the insurance policies with consumers. The difference between the co-payment and the cost of the drug is referred to as a “spread” which the insurance company then claws back from the pharmacy pursuant to the contractual agreements between the insurance company and the pharmacy.
Under the terms of the insurance policies, insurance companies are not entitled to this spread and are unjustly profiting off this alleged scheme to the detriment of the insureds. It has been alleged that this clawback scheme is a term of the contracts between the insurance companies and the pharmacies, and that the pharmacies are contractually prohibited from disclosing this scheme to consumers. It is also reported that pharmacies – as part of their contracts with insurance companies – are under a “gag order” to not disclose any information when consumers inquire at the pharmacy whether it would be cheaper to purchase prescriptions outside of their insurance plans. Thus, a consumer’s “co-payment” may not really be a co-payment at all, as insurance companies may not be genuinely sharing any of the cost of prescription drugs with their insureds. As a result of this alleged scheme, consumers may be overcharged for, or pay unauthorized and excessive co-payments, co-insurance and deductible payments in connection with the purchase of, prescription drugs.
The conduct described above may violate federal and state laws. A lawsuit alleging this scheme was recently filed against UnitedHealth Group and certain of its subsidiaries. If you believe you have been subject to the foregoing by UnitedHealth Group or another insurance company, or if you have any information relating to this alleged scheme, please contact the lawyers listed on this page.