Massachusetts Attorney General Maura Healey announced that retail pharmacy provider Walmart, Inc. has agreed to pay $500,000 after allegedly failing to follow prescription pricing procedures that are in place to keep costs down and prevent overcharges in the workers’ compensation insurance system.
This case is part of an ongoing review by the Attorney General’s Office into prescription pricing procedures in the workers’ compensation system. AG Healey has now reached settlements with Walmart, Express Scripts, Optum Rx, Walgreens, Stop & Shop, and United Pharmacy for workers’ compensation drug pricing violations totaling over $16 million.
The pricing procedures, required by Massachusetts regulations, ensure that prescription costs will be reviewed against certain regulatory benchmarks. According to the assurance of discontinuance, filed this week in Suffolk Superior Court, Walmart allegedly failed to follow those regulations when applying prices for various injured worker prescriptions from 2016 to the present, at Walmart pharmacy locations in Massachusetts.
Under Massachusetts’ Workers’ Compensation system, when employees are hurt on the job, they are entitled to lost wages, compensation for injuries, and payments for certain injury-related expenses. The system sets limits for the cost of prescriptions for injured workers and requires companies to validate prices against certain regulatory benchmarks before processing their charges, such as the Federal Upper Limit for Medicare and the Massachusetts Maximum Allowable Cost.
On November 7 the Attorney General announced that Pharmacy Benefits Manager, Express Scripts, Inc., has agreed to pay $3.2 million after allegedly failing to follow prescription pricing procedures. The terms of the AG’s settlement require Express Scripts to implement procedures to prevent overcharges in the workers’ compensation insurance system. The settlement also ensures that Express Scripts will cooperate with the AG’s Office’s monitoring of the company’s future regulatory compliance.
Last February the AG announced that Pharmacy benefits manager, Optum Rx, Inc., has agreed to pay $5.8 million after allegedly failing to follow workers’ compensation prescription pricing procedures. The settlement, filed in Suffolk Superior Court, resolves allegations that Optum Rx, in some circumstances, failed to apply various regulatory benchmarks – like the Federal Upper Limit for Medicare and the Massachusetts Maximum Allowable Cost – to its pricing determinations for certain workers’ compensation insurance prescription drug charges. These failures, according to the settlement, allegedly occurred on various injured worker prescriptions filled in Springfield, New Bedford, Boston and Worcester at Walgreens, CVS, and RiteAid locations.
In February 2019 the AG announced that Walgreens has entered into two separate settlement agreements to resolve allegations that it overcharged MassHealth for prescriptions. These settlements both arise from qui tam (whistleblower) actions originally filed in the United States District Court for the Southern District of New York under the federal False Claims Act. Walgreens is a national pharmacy chain with over 260 locations in Massachusetts. .
These cases were handled by staff from Attorney General Healey’s Insurance and Financial Services Division, including Glenn Kaplan, Dr. Burt Feinberg, and Gia Kim.