Workers’ Compensation Billing Company to Pay $1 Million for Allegedly Overcharging State Entities for Prescription Drug Coverage
AG’s Office Has Recovered More Than $9 Million to Date Through Workers’ Compensation False Claims Act Investigations
BOSTON – After allegedly overcharging the Commonwealth and a number of cities and towns for prescription drugs through the workers’ compensation insurance system, StoneRiver Pharmacy Solutions, Inc. (StoneRiver) has agreed to pay approximately $1 million in restitution, Attorney General Martha Coakley announced today.
To date, the AG’s Office has recovered more than $9 million in relief through similar investigations of pharmacy retail stores including Walmart and Target Corporation, along with major pharmacy chains CVS, Rite-Aid and Walgreens. The AG’s Office has also obtained recoveries from both Shaw’s Supermarkets and Stop & Shop regarding their workers’ compensation municipal prescription businesses. The settlement with StoneRiver is the eighth of its kind.
“Overcharging for prescription drugs harms cities and towns at a time when they are facing great financial pressure to provide much needed services to people,” AG Coakley said. “This case will provide restitution to those communities, and we are determined to prevent overcharges like these from happening in the future.”
The assurance of discontinuance reached with StoneRiver, a workers compensation billing firm that charges cities and towns on behalf of pharmacy retail stores, was filed in Suffolk Superior Court on Wednesday. Under the terms of the agreement, governmental subdivisions, including nearly 80 cities and towns, will receive close to $500,000 from StoneRiver as a refund for the alleged overcharges and violations of the False Claims Act.
StoneRiver will separately make an additional payment of over $500,000 to the Commonwealth. The terms of the agreement require StoneRiver to put procedures in place to guard against future overcharges and implement a pricing protocol compliant with state laws and regulations.
Cities and towns affected the most include Weymouth, which will receive $91,600 in restitution, and Rehoboth with approximately $46,000. Other municipalities affected include Lunenburg, Fairhaven, Lowell, and Haverhill, all receiving refunds in excess of $10,000. On average, the public entities overcharged in this case will receive approximately $6,000 each.
This matter is being handled by Attorney General Coakley's Insurance and Financial Services Division, Assistant Attorneys General Peter Leight and Glenn Kaplan, and mathematician Burt Feinberg.