Employee Benefits News examines legal developments that impact the employee benefits and executive compensation employers provide, including federal and state legislation, rules from federal...
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 firstname.lastname@example.org
To contact the editor responsible for this story: Jo-el J. Meyer at email@example.com
Text of the complaint is at http://www.bloomberglaw.com/public/document/Negron_v_CIGNA_Corporation_et_al_Docket_No_316cv01702_D_Conn_Oct_.
Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)