Employee Benefits News examines legal developments that impact the employee benefits and executive compensation employers provide, including federal and state legislation, rules from federal...
Nov. 16 — UnitedHealth Group is once again in the crosshairs of a lawsuit by a health plan participant who claims she was secretly overcharged for prescription drugs ( Fellgren v. UnitedHealth Group Inc. , D. Minn., No. 0:16-cv-03914, complaint filed 11/15/16 ).
The newest lawsuit, filed Nov. 15 as a proposed class action, attacks the insurer’s relationship with its pharmacy benefit manager, OptumRx. The complaint alleges UnitedHealth and OptumRx added “hidden bogus fees” to sales of prescription drugs that had retail prices below an insured patient’s copayment amount. When a copayment exceeds the retail price of a given drug, the defendants “claw back” that excess copayment amount as “pure, undisclosed profits,” according to the complaint.
The lawsuit follows investigations into prescription drug costs by a New Orleans television station, and it marks at least the third time in the past six weeks that UnitedHealth has been sued over its relationship with Optum. Similar lawsuits were filed on Oct. 4 and Oct. 14, and Cigna Corp. and Humana have been sued over similar alleged schemes.
According to the latest complaint, these clawback amounts are “not insignificant” and can sometimes exceed the total cost of a given medication. This means that pharmacy benefit managers such as OptumRx “are often collecting for themselves more than the prescription even costs, while the patient’s insurance plan provides no benefit to the patient,” the complaint alleges.
All five pending lawsuits cite a 2016 investigation into health insurance clawbacks conducted by New Orleans television station Fox 8. The investigation found that some insured patients may be paying more for prescription drugs than they would pay if they lacked insurance altogether.
Lee Zurik, anchor and chief investigative reporter for Fox 8, told Bloomberg BNA that smaller insurance companies may be engaged in similar clawback practices. Zurik said he knew of other attorneys looking into these issues, adding that it “definitely wouldn’t surprise me if more suits are filed.”
The latest lawsuit also takes aim at UnitedHealth’s alleged use of contractual “gag clauses” that prohibit pharmacists from telling patients the true cost of their prescription drugs.
Zurik said that these gag clauses make it “extremely difficult” for patients to know if they’re being overcharged for drugs, which in turn makes it hard to estimate how many people may be affected by these practices.
However, Zurik said that this may be changing—at least in some states.
The five lawsuits vary considerably in terms of legal theories, although all five bring claims under the Racketeer Influenced and Corrupt Organizations Act.
The most recent lawsuit against UnitedHealth also raises claims under Minnesota and Florida law, while the Humana lawsuit was filed under Kentucky law. The lawsuit against Cigna is largely based on the Employee Retirement Income Security Act, as is the first lawsuit against UnitedHealth filed on Oct. 4.
The latest complaint was filed in the U.S. District Court for the District of Minnesota by Keller Rohrback LLP and Lockridge Grindal Nauen PLLP. The other law firms leading this litigation push are Izard Kindall & Raabe LLP, Sarraf Gentile LLP, Gray Plant Mooty, Scott & Scott, Wood Law Firm, Davis & Taliaferro LLC, Lemmon Law Firm and Zimmerman Reed LLP.
UnitedHealth didn’t immediately respond to Bloomberg BNA’s request for comment.
To contact the reporter on this story: Jacklyn Wille in Washington at email@example.com
To contact the editor responsible for this story: Jo-el J. Meyer at firstname.lastname@example.org
Text of the complaint is at http://www.bloomberglaw.com/public/document/Fellgren_v_UnitedHealth_Group_Incorporated_et_al_Docket_No_016cv0.
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 email@example.com.
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 firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)