Cigna Accused of Prescription Drug Overcharging Scheme

Pension & Benefits Daily™ covers all major legislative, regulatory, legal, and industry developments in the area of employee benefits every business day, focusing on actions by Congress,...

By Jacklyn Wille

Oct. 13 — A new lawsuit accuses Cigna Corp. of a fraudulent overcharging scheme that caused health plan participants to pay more than 10 times the true cost of prescription drugs in some cases ( Negron v. Cigna Corp. , D. Conn., No. 3:16-cv-01702, complaint filed 10/13/16 ).

The proposed class action, filed Oct. 13 in a Connecticut federal court, alleges that the insurer forced in-network pharmacies to overcharge patients for prescription drugs and then clawed back the unauthorized overpayments for its own benefit. In some cases, the complaint alleges, patients paid $20 for a medication that cost Cigna less than $2, with the remaining $18 kept by the insurer.

The lawsuit, which claims to implicate the health benefits of “tens of thousands” of Cigna-insured patients, comes a week after similar accusations were leveled against UnitedHealth Group Inc. In both cases, the patients are represented by Izard Kindall & Raabe LLP and Sarraf Gentile LLP.

Both cases claim these practices violate the Employee Retirement Income Security Act and the Racketeer Influenced and Corrupt Organizations Act. The lawsuits claim that the prescription drug copayments made by insured participants aren’t true copayments because the insurers retain more in unauthorized fees than they contribute to the cost of drugs.

“It is not a ‘co-payment,’ it is a ‘you-payment,’” both complaints allege.

Both lawsuits cite an investigation earlier this year into health insurance clawbacks conducted by New Orleans television station Fox 8. The investigation said that some insured patients may be paying more for prescription drugs than they would pay if they lacked insurance.

A Cigna spokeswoman declined Bloomberg BNA’s request for comment, citing a policy against commenting on pending litigation. In May, a Cigna representative told Fox 8 that the drug prices it negotiates with pharmacies are “fair and competitive.” When contacted by Bloomberg BNA on Oct. 5, a spokesman for UnitedHealth said that pharmacy benefits “are administered in line with the coverage described in plan documents.”

To contact the reporter on this story: Jacklyn Wille in Washington at jwille@bna.com

To contact the editor responsible for this story: Jo-el J. Meyer at jmeyer@bna.com

Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.