Humana Class Action Says Insurance Co. Inflates Prescription Copays

A Humana plan participant is accusing the health insurance company of scheming to inflate prescription copays, causing consumers to pay more for medically necessary, covered prescription drugs.

Plaintiff Margie Waldrop filed a proposed class action lawsuit against Humana Inc. and Humana Pharmacy Solutions last week in Kentucky federal court.

Waldrop, who participated in a Medicare Advantage D health plan offered by Humana, alleges the health insurance company along with pharmacy benefit managers (PBMs) artificially inflated purported costs of prescription drugs by increasing copayments and then pocketing the overpayment in the form of “prescription claw back.”

For example, the lawsuit states that when a consumer pays a $10 prescription copayment to the pharmacy for a covered prescription drug, the acquisition costs of the drug may only be $3.

“The PBM then reduces the pharmacy’s reimbursement for the claim for this prescription by $6. In this scenario, the PBM has ‘clawed back’ $6 of the $10 copay,” the class action claims. “Ultimately, the pharmacy is reimbursed $4 (all from the consumer copayment), making only $1 over the cost of the drug, while Humana fraudulently retains $6 – which they do not pass back to the plan participant.”

“In these instances, instead of traditional copayment based on the actual cost of the prescription drug, patients…are unknowingly footing the entire bill for their prescriptions, whereas Defendants pay nothing and make a sizeable undisclosed profit off the consumers,” the Humana class action lawsuit states.

In Waldrop’s case, she claims to have filled a prescription on Sept. 22, 2016 at her local network pharmacy. The pharmacy submitted the prescription drug claim and Humana adjudicated the claim, requiring the pharmacy to charge Waldrop a $20.32 copayment for the prescription.

However, unbeknownst to Waldrop, Humana then artificially inflated the cost of the prescription and “clawed back” $5 of the copay from the pharmacy, the lawsuit reads.

According to the complaint, in order to run this scheme, Humana contracts with participating pharmacies and requires the pharmacists not to disclose the existence of the “claw back” through a “gag clause.”

This “gag clause” prohibits them from advising the plan participant that they could pay less for a drug if the purchase is made without applying the pharmacy insurance benefit.

Additionally, the lawsuit refers to a Fox News investigation where several pharmacists disclosed that the documentation they received clearly shows Humana ordered the collection of copays that were higher than the cost of the drugs.

“Therefore, consumers believe that they are saving money through the use of their pharmacy benefit, when, in reality, they have been charged an excessive amount for the prescription,” Waldrop claims. “The pharmacy believes that is it is being reimbursed a reasonable amount for the prescriptions it fills for consumers, only to have a large portion of it clawed back by Defendants. And the plan participant believes she or he is paying a copayment based on the prescription drug’s true cost, but instead is paying an inflated cost for the prescription.”

Waldrop believes that she has been subjected to additional undisclosed “claw backs” as a result of Humana’s scheme and seeks to represent a nationwide Class of consumers who “purchased medically necessary, covered prescription drugs on Humana’s formulary” and were overcharged for medically necessary, covered prescriptions.

Waldrop is represented by Mark K. Gray and Jacob Levy of Gray & White Law; Joseph P. Guglielmo and Erin Green Comite of Scott + Scott Attorneys at Law LLP; E. Kirk Wood of Wood Law Firm LLC; Greg L. Davis of Davis & Taliaferro LLC; Andrew A. Lemmon of Lemmon Law Firm; Ryan K. Hicks, Esq.; and Brian C. Gudmundson of Zimmerman Reed LLP.

The Humana Inflated Prescription Copays Class Action Lawsuit is Waldrop v. Humana Inc., et al., Case No. 3:16-cv-706-GNS, in the U.S. District Court for the Western District of Kentucky.