Walgreens, CVS Class Action Says Patients Overcharged for Insulin

An Illinois man accuses several nationwide pharmacies of failing to correctly apply Medicare benefits to the purchase of insulin pump supplies.

Plaintiff Robert Mayberry says Walgreens Co., CVS Pharmacy Inc., Albertsons Companies Inc. and Supervalu Inc. d/b/a Osco Drug have been knowingly making erroneous Medicare claims for insulin pumps and insulin to increase their own revenues at their customers’ expense.

He argues this practice unjustly enriches the pharmacies and violates Illinois consumer protection law.

An insulin pump is a device used to administer insulin to diabetes patients. Insulin pumps use electronic controls to deliver a continuous measured dose of insulin and, at the user’s direction, a large “surge” dose around mealtime.

According to Mayberry, insulin pumps are considered “durable medical equipment” by Medicare and Medicaid, as well as most private insurers. As such, he says, they are properly covered under Medicare Part B.

The defendants know that, Mayberry claims. Yet they purposely seek reimbursement for insulin pumps under Medicare Part D, which covers prescription drugs.

Mayberry alleges that CVS, Walgreens and the other pharmacies know these claims will be denied. That denial forces the patient to pay out-of-pocket for the insulin used in the pump, he claims. And since Medicare reimbursement for insulin pump supplies is lower than it used to be, Mayberry says, the defendants profit more by sticking patients with the cost of those supplies.

Mayberry also takes issue with the way Walgreens, CVS and Osco allegedly seek Medicare reimbursement for the insulin itself. Defendants claim coverage under Part D. However, Mayberry argues claims for insulin should be filed under Part B.

By claiming insulin under Part D, Mayberry says, the defendants use up the patients’ Part D coverage, pushing it closer to the patients’ coverage limit. Once a patient’s Part D coverage reaches that limit, the patient must then pay out-of-pocket for further prescription drugs until their expenses reach the catastrophic coverage threshold.

In 2016, the Part D coverage limit was $3,310 and the catastrophic coverage threshold was $4,850, leaving a $1,540-wide coverage gap that patients may have to pay out-of-pocket. Mayberry says this coverage gap is known as the “donut hole.”

By knowingly claiming the patients’ insulin under Part D instead of Part B, the nationwide pharmacies cause patients to enter the “donut hole” prematurely. This results in substantially higher out-of-pocket costs for the patients that they should not have to pay, Mayberry claims.

Mayberry proposes to represent a plaintiff Class consisting of all Medicare or Medicaid participants who, from 2006 through the present, used insulin pumps and insulin provided by the defendants and from whom the defendants sought payment for those pumps and insulin rather than submitting a proper Medicare or Medicaid claim.

He seeks a court order requiring the defendants to set up a reimbursement program that would pay back its customers who had to pay for insulin and insulin pumps after Medicare claims were denied or paid only in part. He also seeks an award of damages, court costs and attorneys’ fees.

Mayberry is represented by attorney Shannon M. McNulty of Clifford Law Offices.

The Insulin Pump Fraudulent Medicare Claims Class Action Lawsuit is Robert Mayberry v. Walgreens Co., et al., Case No. 1:17-cv-01748, in the U.S. District Court for the Northern District of Illinois.

UPDATE: The Insulin Pump Fraudulent Medicare Claims Class Action Lawsuit was dismissed on September 22, 2017.  Top Class Actions will let our viewers know if a new lawsuit is filed.