Category: Daily News

Over the years, there has been a consolidation of most of the U.S. pharmacy benefits business under OptumRx, CVS and Express Scripts. This has not occurred without controversy in workers’ compensation claims.

The pharmacy benefit manager administering prescription drugs for workers injured on the job overcharged the Ohio Bureau of Workers’ Compensation on more than 1.3 million claims for generic medications, according to a new court filing by Attorney General Dave Yost’s office.

The report in the Columbus Dispatch says that attorneys for the state asked the court to rule OptumRx breached its contract and is liable for unspecified damages. According to the court filing, OptumRx overcharged the state on 57% of 2.3 million claims between January 2014 and September 2018.

“By failing to follow the pricing rules it agreed to and promised to obey, OptumRx violated its duties to the State of Ohio and BWC and wrongfully pocketed millions of dollars in unearned profits,” the court filing says.

The state sued Texas-based OptumRx last March, leading to several months of mediation that failed to resolve the dispute. Late Friday, attorneys for the state filed a motion for partial summary judgment, arguing “there can be no dispute” that OptumRx violated terms of its contract.” Attorneys asked the court  to determine damages at a later hearing.

In an earlier filing, the state asked for a fine of up to $5,000 for each day that the improper prices were charged, pushing the potential damages into the millions.

OptumRx spokesman Drew Krejci said in response to the latest allegations, “We are honored to have delivered access to more affordable prescription medications for the Ohio Bureau of Workers’ Compensation and Ohio taxpayers. We believe these allegations are without merit and will vigorously defend ourselves.”

OptumRx, owned by UnitedHealth Group, was hired by the Bureau of Workers’ Compensation to manage claims, set pharmacy reimbursements and handle other billing matters. The bureau is funded by assessments on employers and spends about $86 million a year on prescription drugs.

The pharmacy benefit manager’s contract with the bureau expired in 2018 and was not renewed.

According to the latest filing by the state, OptumRx agreed to charge the bureau the lesser of four possible prices for generic drugs with the “federal upper limit,” a maximum price set by the Centers for Medicare and Medicaid Services for federally funded programs, the most that could be paid.

“The federal upper limit acted as a price ceiling,” the filing said. “If the other three prices, (which were set by OptumRx, drug companies and pharmacies, respectively), were higher than the federal upper limit, then the federal upper limit applied.”

The filing included an analysis of OptumRx claims data showing the company charged the bureau more than the federal upper limit price on 1.3 million of 2.3 million generic claims. In one example cited, OptumRx charged the bureau $101 for Lamotrigine, used to treat seizures, when the federal upper limit was $55.51, making for a $45.59 overcharge.

In its work for Ohio Medicaid, OptumRx was found to have billed the state $26 million more than it paid pharmacists to fill prescriptions in a one-year period.

AB-5, the new California law that defines most freelance workers as employees has been under fire since it was passed.

A state court conclude that California’s controversial new misclassification law doesn’t apply to truck drivers, the second time in the last few weeks that a judge has come down hard on AB-5 for going too far in limiting the kinds of workers who can be classified as independent contractors.

Now, a coalition of business groups led by the U.S. Chamber of Commerce filed a lawsuit in December seeking to block AB 51 from ever taking effect.

That law, signed into effect in October, would make it unlawful for California employers to require applicants and employees to sign arbitration agreements beginning January 1, 2020.

The plaintiffs asked the court to grant a preliminary injunction blocking the enforcement of AB 51 pending proceedings in the lawsuit. They also filed a request for a Temporary Restraining Order (TRO), which would halt the law from being enforced while the litigation over the preliminary injunction request was taking place.

On December 30, the court granted the TRO, effectively preventing the state from enforcing AB 51 until the request for a preliminary injunction is decided.

A federal judge just extended the reprieve that permitted California employers to escape the grasp of a newly enacted law that aimed to prevent them from utilizing mandatory arbitration agreements with their employees.

After granting a temporary restraining order that pressed pause on the new law before it could take effect on January 1, the court granted a full preliminary injunction that will block the law during the court proceedings that will examine the legality of the new statute.

This is good news for California employers, but because things could evolve rapidly over the coming weeks and months, they should pay particular attention to upcoming developments to ensure compliance.

The newly elected Orange County District Attorney is dropping all charges against a doctor and his girlfriend, alleging that his predecessor “manufactured” allegations that the couple drugged and sexually assaulted up to 1,000 women.

The stunning turn of events comes a year and a half after the case against Grant Robicheaux, an orthopedic surgeon who appeared on the TV show The Online Dating Rituals of the American Male, and substitute teacher Cerissa Riley exploded into the headlines.

At the time, Orange County’s then-district attorney, Tony Rackauckas, claimed the pair lured women to their Newport Beach home, knocked them unconscious, and raped them.

At a press conference in September 2018, he said investigators had seized “hundreds” of incriminating videos from the couple’s phones. Asked whether the number could be as a high as a thousand, Rackauckas said, “I think so.”

A few months later, though, Rackauckas was out of office, replaced by current DA Todd Spitzer, who eventually ordered a review of the evidence. He says he was appalled by what he found.

“The prior District Attorney and his chief of staff manufactured this case and repeatedly misstated the evidence to lead the public and vulnerable women to believe that these two individuals plied up to 1,000 women with drugs and alcohol in order to sexually assault them – and videotape the assaults,” Spitzer said in a blistering statement.

“As a result of the complete case review I ordered beginning in July, we now know that there was not a single video or photograph depicting an unconscious or incapacitated woman being sexually assaulted.”

Rackauckas has not responded to his former rival’s allegations. But Robicheaux’s attorney praised the reversal.

Robicheaux, 39, and Riley, 32, insisted from the start that all their liaisons were consensual. They were swingers, their attorneys argued, and the so-called victims were willing participants.

They claimed Rackauckas inflated the allegations, hoping that media attention would buoy his re-election effort. And last June, unsealed transcripts of a deposition showed the ex-prosecutor thought the publicity would help him.

Spitzer said that’s when he assembled a team to re-evaluate the case. “A team of prosecutors with a combined 175 years of experience determined there is no provable evidence that Robicheaux and Riley committed any sexual offense,” he said in a press release.

The charges that will be dropped include kidnapping and rape; Robicheaux and Riley would have faced up to life in prison if convicted.

At least some of the women who accused Robicheaux and Riley maintain they were assaulted.

Michael Fell, an attorney for one of them, told the Los Angeles Times the decision is a betrayal of his client.

A licensed acupuncturist was sentenced to 30 months in prison for fraudulently billing Amtrak’s health care plan for $7.1 million in acupuncture, massages and facials that either were medically unnecessary or were never provided.

Guiqiong Xiao Gudmundsen, 53, a.k.a. “Kimi” Gudmundsen, of Anaheim Hills, was sentenced and also ordered her to pay $2,683,903 in restitution to Amtrak.

Back in October 2019, Gudmundsen pleaded guilty to one count of health care fraud and one count of money laundering.

Gudmundsen owned Healthy Life Acupuncture Center, which operated in Riverside and Los Angeles. From January 2008 until December 2015, Gudmundsen recruited Amtrak employees to visit Healthy Life and then, among other things, billed the Amtrak health care plan for acupuncture, which she knew wasn’t being provided.

She billed the health plan for medically unnecessary services such as massages and facials, as well as for work-related injuries she knew the Amtrak plan did not cover. Gudmundsen also provided medical services to non-Amtrak health care plan participants and then billed the plan for it under the name of an actual Amtrak plan participant.

Gudmundsen regularly waived co-payments, co-insurance, and deductibles for Amtrak health care plan participants, something the plan did not permit. She double billed to other insurance plans, and she provided services to returning patients falsely billed as “new patients” in order to take advantage of higher reimbursement rates.

During the course of the scheme, Gudmundsen billed Amtrak’s health care plan in amounts comparable to large research hospitals and medical institutions that dwarfed other acupuncturists, court papers state. In 2013, Gudmundsen was ranked 32nd in the United States among health care providers for the amount billed to the Amtrak health care plan – above Johns Hopkins Hospital in Baltimore, which was ranked 39th, according to court documents.

Finally, she knowingly and routinely funneled her ill-gotten gains through bank accounts opened in the names of a shell company and her relatives.

Gudmundsen’s “entire business model was based on fraud, infiltrating all the services that she provided (and those she did not provide),” prosecutors wrote in their sentencing memorandum.

This matter was investigated by Amtrak Office of Inspector General, IRS Criminal Investigation, and the U.S. Department of Labor’s Employee Benefits Security Administration.

Pharmacy giant Walgreens has agreed to pay $7.5 million to settle a consumer protection lawsuit, accusing the company of allowing a phony pharmacist to handle over 745,000 prescriptions. The lawsuit was filed and settled on Monday jointly by the Alameda County and Santa Clara County District Attorneys’ Offices in Alameda County Superior Court.

The settlement comes just over a year after the Mercury News revealed a California State Board of Pharmacy investigation alleging Walgreens stores in Fremont, Milpitas and San Jose allowed Kim Thien Le to perform pharmacist duties for more than a decade without ever having a pharmacist’s license.

During Le’s more than 15 years as both an intern pharmacist and a pharmacist, she handled more than 100,000 prescriptions for controlled substances such as oxycodone, fentanyl, morphine, and codeine, officials said.

“Walgreens failed to vet Ms. Le thoroughly when it promoted her to positions requiring a license and failed to make sure that its internal systems were strong enough to prevent an employee from evading them,” a statement from the Alameda County District Attorney’s Office said.

After the state investigation began, Walgreens “undertook a re-verification of the licenses of all our pharmacists nationwide,” Walgreens spokesman Jim Cohn said in an email.

He also noted that Le’s employment with the company ended in October 2017, but did not offer further comment on the settlement, which had been under negotiation between prosecutors and the company.

Under the settlement, Walgreens will also be required to create a verification program, post proof that all of its employees are licensed if their position requires one, conduct annual audits, and submit an annual compliance report to the Alameda County DA’s office, Lin said.

This settlement is not the first legal fallout since the revelations about the investigation came to light.

The California Attorney General’s office in July charged Le with false impersonation, identity theft and obtaining money, labor or property by false pretenses. The case is still pending in Alameda County courts. Le has pleaded not guilty to all charges.

The Walgreens stores involved could have received a range of disciplines for their part in the case, from a reprimand up to suspension or revocation of their pharmacy licenses, officials said previously.

But Becerra’s office ultimately required Walgreens to pay a $335,000 civil penalty and $19,500 to cover the Department of Justice’s investigation costs, and to admit to the truth of the claims in the state board’s investigation, according to State Board of Pharmacy documents reviewed by this news organization.

Teresa Drenick, a spokeswoman for the Alameda County DA’s office, said of the $7.5 million settlement money from Walgreens, the two DA’s offices will split roughly $250,000 to cover investigative costs, while about $250,000 will go to the state’s Consumer Protection Trust.

The remaining $6,992,500 is evenly divided between the two DA’s offices to be used for consumer protection and enforcement in the future.