CVS accused of overbilling feds $600M in scheme similar to one in Ohio

Ohio Capital Journal

Reporter: Marty Schladen

The federal government on Friday accused a drug middleman owned by CVS Health of overbilling a program that covers 9 million federal employees by $615 million over a four-year period.

The audit’s findings were similar to those found by one commissioned by the Ohio Department of Medicaid in 2018. It found that pharmacy middlemen owned by CVS and UnitedHealth billed the state $224 million more for drugs that it paid pharmacists in 2017.

CVS said that the latest audit comes after the Office of Personnel Management changed its rules to bring more transparency to the activities of pharmacy benefit managers, or PBMs. The audit covered transactions from 2018 through 2021.

“This is fundamentally a retroactive contract dispute that is occurring after (the Office of Personnel Management) updated its transparency guidelines,” CVS spokeswoman Shelly Bendit said in an email.

“Notably, the audit lists no concerns regarding patient safety, drug access, fraud, reimbursements to network pharmacies, or drug rebates. We support clear standards and continue to work within OPM’s updated framework to ensure accountability, transparency, and value for federal employees.”

The inspector general recommended that the Office of Personnel Management demand that CVS repay about $600 million.

CVS Caremark — CVS’s PBM — was handling drug transactions on behalf of Blue Cross and Blue Shield, which provided health insurance for the Federal Employees Health Benefits Program. 

CVS Health, UnitedHealth Group, and Cigna-Express Scripts each are among the 15 largest corporations in the United States. And each owns one of the three largest PBMs.

Critics have long said the marketplace for pharmacy middlemen is overconcentrated, with the big three PBMs controlling nearly 80% of insured drug transactions... Continue Reading