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Plan Sponsor ALERT: New York Seeks To Eliminate PBM Spread Pricing

On April 1, 2019, New York legislators have passed new regulations eliminating "spread pricing" on prescription drugs within the Medicaid managed care system. Under "spread pricing" arrangements, PBMs bill the Plan Sponsor for the drug dispensed by the pharmacy more than the amount the PBM pays to the pharmacy. The difference is the "spread," which the PBM retains as revenue. Over the last few years, PBMs have been lowering pharmacies'...

Recent DOJ Complaint Targets Hospital’s Compensation Arrangements with Physicians

On March 25, 2019, the U.S. Department of Justice (DOJ) filed a 49-page, multi-count complaint in Pennsylvania federal court against Wheeling Hospital in West Virginia, citing the hospital’s payments to physicians as violating the Anti-Kickback Statute, Stark Law and False Claims Act (FCA). The alleged fraud scheme includes, but is not limited to, incentive compensation paid to physicians employed by the hospital and suspect equipment rental arrangements with a radiology...

Provider ALERT: Open Payments Review Period Begins April 1st

The Open Payments program collects and publishes data regarding financial relationships between the healthcare industry, including applicable drug and device manufacturers and GPOs, and healthcare providers ("Covered Recipients") on a publicly accessible website that enables consumers of health care to search, download, and evaluate the reported data. The law that gave rise to the program is commonly referred to as the Physician Payments Sunshine Act, or simply the "Sunshine Act."  ...

Pharmacy ALERT: CVS Caremark Demands Retail Pharmacies Accept Mail Order Pharmacy Addendum

In a growing trend, CVS Caremark (Caremark) has joined the ranks of PBMs to begin offering a mail order network in both commercial and Medicare Part D networks. Caremark has recently contacted a number of pharmacies participating in Caremark retail networks requiring they accept a Mail Order Pharmacy Addendum. This notice to pharmacies Caremark has identified to be operating under a "non-standard retail pharmacy model" based on the volume of...

Medical Supply Wholesaler Wins Insurance Coverage Dispute for Abbott Litigation

Last month, the Wisconsin Supreme Court ruled that West Bend Mutual Insurance Co. was required to defend a medical supply wholesaler in a lawsuit alleging it sold "gray market" versions of Abbott Laboratories' diabetes test strips. The Court found that even though Abbott alleged that the wholesaler had acted in an intentional manner, the insurance policy could not escape its "duty to defend" where other claims alleged were covered by...