New York Attorney General Letitia James, who sued the pharmacy group on Thursday, said CVS Health diverted millions of dollars from underserved communities as part of an anticompetitive scheme involving Medicare’s 340B drug plan.
“While safety net healthcare providers are responding to the public health crisis and helping underserved communities, CVS is depriving them of millions of much-needed funds that could improve patient care,” James said in a statement. Press Releases.
James accused CVS of implementing a program from 2017 to prevent New York safety net hospitals from using companies of their choice to receive federal drug subsidies for prescriptions filled for CVS through the 340B program, which provides drugs at discounted prices to certain Medicare beneficiaries .
As of 2021, more than 4,440 safety net healthcare providers across New York are participating in the 340B program, including HIV/AIDS clinics, black lung clinics, community health clinics, family planning clinics, and more. These facilities primarily treat low-income patients and rely on federal funding.
As part of the program, thousands of safety net healthcare providers in New York were allegedly forced to use recently acquired CVS subsidiary Wellpartner to process 340B claims, causing them to “incur millions of dollars in additional costs to hire and train” employees as well as changing their data systems to align with Wellpartner’s systems,” according to the press release. If they do not use Wellpartner to process their claims, they will not receive federal subsidies.
The attorney general said the fact that suppliers were forced to use Wellpartner instead of choosing from other companies to process 340B claims violated antitrust laws.
In some cases, healthcare providers pay an additional fee to work with Wellpartner just to meet CVS requirements. “Some covered entities grit their teeth for two different 340B [third party administrator] The provider — the one they really want, and then the one (Wellpartner) that the bundling arrangement imposes on them,” James wrote in the complaint filed Thursday.
While providers may pay more, patients are the ultimate victims of the program, James said. “When CVS siphons 340B funds from the hospitals and health care providers targeted by the program, it deprives safety net hospitals and health care providers of funds that could be used to improve quality for the poorest New Yorkers and access to health care — including for New Yorkers without health insurance or the ability to pay for health care.”
The attorney general is seeking injunctive relief, equitable monetary relief and civil penalties. She also asked the court to require CVS to notify all covered entities that they are not legally required to use Wellpartner and can use other firms to process 340B claims.
CVS denies the allegations. “These allegations are baseless and we will vigorously defend ourselves. We will continue to be a partner in New York State, providing New Yorkers with many important healthcare solutions, as evidenced by our recent ongoing, robust efforts to ensure access to COVID testing and vaccinations statewide, ” the company said in an emailed statement.
Photo: Justin Sullivan, Getty Images
