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PHARMACY ALERT: Pharmacy Obtains TRO Against PSAO Preventing GER Withholding

Epic Pharmacy Network, Inc. (Epic) was ordered today to turnover any funds that it has already withheld and refrain from withholding further payment to a pharmacy in its network as a result of a Generic Effective Rate (GER) adjustment once a security bond is in place by the moving pharmacy. 

Pharmacy Services Administrative Organizations (PSAOs) recently sent out “Notice of GER Deductions” to pharmacies in its network advising that the pharmacy’s reimbursements have been running in excess of the contracted “Generic Effective Rate” (GER) amount. The Notices warns the receiving pharmacy that the monetary sum in excess of the contracted GER amount will be withheld from amounts due to pharmacy. Here, Epic sought nearly $6 Million from one particular pharmacy. 

In granting the pharmacy’s Motion for Temporary Restraints, the Circuit Court for Baltimore County Maryland found that there is a reasonable likelihood of success that the pharmacy shall succeed on the merits on one or more of its claims against Epic, including breach of contract, negligence for violations of Epic’s fiduciary duty to the pharmacy or convergence of the pharmacy’s funds as part of the GER withholding. Further, in granting the pharmacy’s Motion for Temporary Restraints the Court determined that the pharmacy will suffer irreparable harm as a result of Epic’s conduct, that a balancing of the equities weighs in favor of the pharmacy in issuing the temporary restraining order and that there is a strong public interest in issuing the temporary restraining order.

Frier Levitt has extensive experience representing pharmacies in challenging the GER adjudication. If your pharmacy has received a letter from EPIC or any other PSAO notifying the pharmacy that it is withholding funds, contact Frier Levitt today to speak to an attorney.