CIGNA and Benefit Manager Sued for Alleged Med Equipment Overcharges
A Texas resident has filed a federal lawsuit against Connecticut-based Cigna Health and Life Insurance Co. and one of its pharmacy benefit managers, CareCentrix Inc., charging they conspired to drive up the consumer costs of home patient care and durable medical equipment.
October 13, 2017 at 01:34 PM
6 minute read
A Texas resident has filed a federal lawsuit against Bloomfield, Connecticut-based Cigna Health and Life Insurance Co. and one of its pharmacy benefit managers, CareCentrix Inc., charging they conspired to drive up the consumer costs of home patient care and durable medical equipment.
The suit, filed Oct. 6 by Jeffrey Neufeld in the U.S. District Court in Connecticut, accuses the companies of artificially inflating costs through a fraudulent billing scheme that required pharmacy benefit managers such as CareCentrix of Hartford to overcharge for co-payments and deductible and coinsurance payments. It alleges violations of the Racketeer Influenced and Corrupt Organizations and Employee Retirement Income Security acts. It does not specify the amount of damages sought, although Neufeld seeks to certify his case as a class action.
A spokesman for Cigna said in an email that the company does not comment on pending litigation.
Plaintiffs increasingly have been going after health care companies and their pharmacy benefit managers in court for their alleged roles in rising medical costs, particularly prescription drug prices. Pharmacy benefit managers, or PBMs, are middlemen in the pharmaceutical industry that process prescriptions for the insurance companies that pay for the drugs. CareCentrix provides home patient care and durable medical equipment, including sleep management systems. After contracting with Cigna, CareCentrix established a network of more than 9,000 providers to administer these products and services to patients.
In the suit, Neufeld claims he was charged by J&L Medical Services, an authorized CareCentrix provider, $25.68 toward his deductible for a disposable filter for a device to treat sleep apnea. However, J&L had contracted directly with CareCentrix and indirectly with Cigna to provide the filter for only $7.50, according to the complaint. The remaining $18.18, which represents a nearly 350 percent overcharge for the filter, was collected in secret and pocketed by Cigna and CareCentrix, the suit claims.
The lawsuit comes nearly a year after a Massachusetts woman sued Cigna, claiming that it requires the network of pharmacies with which it contracts to overcharge insured patients “unauthorized and excessive amounts” for prescription drugs. That class action is pending in the federal court in New Haven.
In August, CVS Health of Woonsocket, Rhode Island, and Walgreens Boots Alliance Inc. of Deerfield, Illinois, were sued in separate class action lawsuits for allegedly colluding with PBMs to sell certain generic drugs at a higher cost if they are purchased with insurance.
The plaintiffs in both suits, however, have since voluntarily dismissed the actions after—at least in the case of the CVS litigation—the retail pharmacy giant notified the plaintiff of “false assertions” in her complaint.
A Texas resident has filed a federal lawsuit against Bloomfield, Connecticut-based
The suit, filed Oct. 6 by Jeffrey Neufeld in the U.S. District Court in Connecticut, accuses the companies of artificially inflating costs through a fraudulent billing scheme that required pharmacy benefit managers such as CareCentrix of Hartford to overcharge for co-payments and deductible and coinsurance payments. It alleges violations of the Racketeer Influenced and Corrupt Organizations and Employee Retirement Income Security acts. It does not specify the amount of damages sought, although Neufeld seeks to certify his case as a class action.
A spokesman for Cigna said in an email that the company does not comment on pending litigation.
Plaintiffs increasingly have been going after health care companies and their pharmacy benefit managers in court for their alleged roles in rising medical costs, particularly prescription drug prices. Pharmacy benefit managers, or PBMs, are middlemen in the pharmaceutical industry that process prescriptions for the insurance companies that pay for the drugs. CareCentrix provides home patient care and durable medical equipment, including sleep management systems. After contracting with Cigna, CareCentrix established a network of more than 9,000 providers to administer these products and services to patients.
In the suit, Neufeld claims he was charged by J&L Medical Services, an authorized CareCentrix provider, $25.68 toward his deductible for a disposable filter for a device to treat sleep apnea. However, J&L had contracted directly with CareCentrix and indirectly with Cigna to provide the filter for only $7.50, according to the complaint. The remaining $18.18, which represents a nearly 350 percent overcharge for the filter, was collected in secret and pocketed by Cigna and CareCentrix, the suit claims.
The lawsuit comes nearly a year after a
In August, CVS Health of Woonsocket, Rhode Island, and Walgreens Boots Alliance Inc. of Deerfield, Illinois, were sued in separate class action lawsuits for allegedly colluding with PBMs to sell certain generic drugs at a higher cost if they are purchased with insurance.
The plaintiffs in both suits, however, have since voluntarily dismissed the actions after—at least in the case of the CVS litigation—the retail pharmacy giant notified the plaintiff of “false assertions” in her complaint.
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