Our whistleblower attorneys are available to assist employees and other potential whistleblowers interested in reporting health care fraud at pharmacy benefit managers (PBMs). Individuals reporting PBM Fraud may be compensated by the Government under the terms of the False Claims Act. Generally, the False Claims Act provides for rewards of between 15 and 30 percent to relators (a.k.a. whistleblowers) who bring a qui tam lawsuit that helps recover government money lost due to fraud.
If you have evidence of a PBM engaged in health care fraud, please contact our False Claims Act lawyers at 800-590-4116 for a free, confidential initial consultation.
What is a PBM?
A PBM is a third-party administration (TPA) of a prescription drug program. They are an intermediary between the payer (plan sponsor), the customer/patient, the pharmacists, and the drug companies.By negotiating discounts with drug stores, rebates from drug manufacturers, managing high-cost specialty medications and encouraging the user of generics and affordable drugs, they are supposed to achieve savings for their plan sponsors (the U.S. Government and large commercial businesses). Favored drugs are put on the formulary of the PBM, and disfavored drugs are given a lower priority status or placed on an exclusion list.In doing so, they are balancing the benefit to the patients who need the drugs with the practical business aspect of ensuring that the fund has enough money to provide for treatment to everyone who needs it.
PBMs manage pharmacy benefits for more than 250 million Americans.Some of the largest PBMs are Express Scripts, CVS Health, United Health/OptumRx/Catamaran, and Prime Therapeutics.
Types of PBM Fraud
PBMs play a role in U.S. government spending on health care services. They serve as TPAs for Medicare Part D drug plans as well as for the Federal Employees Health Benefits Program. PBMs may also contract with Medicare Advantage plans to provide services in the administration of their drug plan. A PBM may also insure individuals who receive prescription benefits under both Medicaid and a supplemental private health plan (“dual eligible” individuals). When the PBM intentionally or recklessly makes false claims for payment or false statements to the U.S. Government, it is in violation of the False Claims Act. A few different potential cases of PBM fraud include:
Kickbacks: Allegations of violations of the Anti-Kickback Statute have led to several large settlements by PBMs to resolve False Claims Act lawsuits. The lawsuits typically allege that the PBM negotiated rebates from pharmaceutical companies that it did not disclose to the government. The Government has said that hidden financial agreements can increase drug prices and inappropriately influence pharmaceutical prescription decisions. The potential dangers of kickbacks influencing formulary lists are obvious. There have also been allegations that secret payments to health plans have been kickbacks that caused the plan to operate against the interest of its members or clients.
Drug Switching: Engaging in inappropriate conduct (pressure towards pharmacists, misrepresentations to patients/pharmacists, or failing to disclose ownership interest when advocating for drug switch ) in order to switch a patient from one drug to another and profit from the switch.
Dual Eligible Patients: If the PBM pays less than it actually owes, the Government may pay more than it should have for the prescriptions of the dual-eligible patients.
Mail Order Pharmacies: A PBM may also own or operate a mail order pharmacy which fills prescriptions for its patient. These operations may engage in the standard forms of pharmacy fraud.
Best Price: Pharmaceutical companies must report their Best Price for drugs to the U.S. Government. If rebates and other services provided to a PBM by a drug company alters the Best Price and it does not disclose the new price to the U.S. Government, it is in violation of the False Claims Act on prescriptions where the government does not pay the undisclosed Best Price.
Pass Through Discounts: Increasing prescription drug costs by failing to inform the government about discounts that it kept for itself.
Negotiation Misrepresentations: Misrepresenting discounts the plan sponsor (government) would receive for drugs purchased.
Government Investigations of PBMs
Prescription drug prices are skyrocketing and pharmacy benefit managers have fallen squarely in the crosshairs of government investigations about the high cost of pharmaceuticals. In 2016, the Government has been looking into contractual relationships between several drug manufacturers and PBMs in order to evaluate them for potential health care fraud. If you have evidence of inappropriate dealings between a PBM and, please call 1-800-590-4116 to discuss reporting it to the U.S. Government with one of our whistleblower lawyers.