CVS accused of “robbing” healthcare workers in antitrust lawsuit

New York Attorney General Letitia James is suing CVS Health Corporation (CVS) for violating antitrust laws and financially damaging hospitals and clinics that provide care to disadvantaged communities, her office announced Thursday.

For years, CVS has required New York safety net providers to exclusively use a CVS-owned company, Wellpartner, to process and obtain federal subsidies on prescriptions filled out at CVS pharmacies, according to the lawsuit.

The Attorney General’s Office says CVS’s scheme has forced suppliers to incur millions in additional costs, while CVS has continued to benefit through its subsidiary. CVS policies deprived healthcare practices of critical federal funding that could have been used to improve and expand patient care, the lawsuit claims.

Through his lawsuit, James is seeking to put an end to what his office considers unfair and illegal CVS practices and to recover lost revenue for safety net hospitals and clinics that could improve health services.

“While safety net health workers are addressing public health crises and helping disadvantaged communities, CVS is robbing them of millions of desperately needed funds that could improve patient care,” James said in a statement. “CVS’s stock is a clear example of a large company using its power and power to take advantage of vulnerable institutions and New Yorkers, but my office won’t allow it.”

According to the documents, CVS has not allowed New York safety net hospitals and clinics to use the company of their choice to obtain prescription subsidies at CVS pharmacies through federal program 340B. This program allows safety net hospitals and clinics to purchase certain drugs at a discount from pharmaceutical companies and use the savings for patient care.

To realize the benefits of the 340B program, hospitals and clinics in the safety net must contract with the pharmacies used by their patients. Under CVS requirements, thousands of statewide safety net health care providers could only use Wellpartner to process filed complaints at CVS retail and specialty pharmacies, forcing them to incur millions of dollars in additional costs to hire and train staff and change their data systems to align with Wellpartner’s system, according to the cause.

The lawsuit claims that New York patients were the latest victims of the CVS practice, which embezzled federal funding from safety net health care providers who could have used the funds to improve access to health care for children. New Yorkers most in need, including the poor and the uninsured.

More than 4,440 safety net health care providers have been enrolled in the 340B program in New York as of 2021. These include federally qualified health centers, critical access hospitals, HIV / AIDS clinics, referral centers rural, community-only hospitals, black lung clinics, community health centers, family planning clinics and tuberculosis clinics. These facilities primarily treat low-income patients and rely on $ 340 billion in savings to fund patient care services to disadvantaged and vulnerable populations.

Safety net health care providers have full legal responsibility for record keeping and can only collect 340 billion in revenue on certain prescriptions, including patient prescriptions for drugs used to treat HIV / AIDS and hepatitis C. Most safety net providers contract with a third party administrator, or TPA, to administer their 340B programs. TPAs confirm eligibility for each transaction and maintain detailed records, as required by federal program 340B rules.

In 2017, CVS acquired Wellpartner, a TPA, and began applying for it to New York hospitals. An investigation by the Attorney General’s Office found that CVS pharmacies have not contracted with hospitals that do not use Wellpartner as a TPA, which is a violation of New York’s antitrust laws.

The 340B program rules do not allow hospitals to remove patients from certain pharmacies. Hospitals and clinics had little choice: they had to comply with CVS requirements or forgo the benefits they were entitled to., according to the cause.

CVS sought to leverage the strength of its retail pharmacy network in New York to force hospitals to use Wellpartner rather than any other TPA, James’s office said.

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