Press Release  Optum Rx to Pay $5.8 Million for Alleged Failure to Follow Workers’ Compensation Prescription Pricing Procedures

BOSTON — Pharmacy benefits manager, Optum Rx, Inc., has agreed to pay $5.8 million after allegedly failing to follow workers’ compensation prescription pricing procedures. These procedures are in place to keep costs down and prevent overcharges in the workers’ compensation insurance system, Attorney General Maura Healey announced today.

The settlement, filed in Suffolk Superior Court, resolves allegations that Optum Rx, in some circumstances, failed to apply various regulatory benchmarks – like the Federal Upper Limit for Medicare and the Massachusetts Maximum Allowable Cost – to its pricing determinations for certain workers’ compensation insurance prescription drug charges. These failures, according to the settlement, allegedly occurred on various injured worker prescriptions filled in Springfield, New Bedford, Boston and Worcester at Walgreens, CVS, and RiteAid locations.

The Massachusetts workers’ compensation insurance system covers certain medical costs incurred by workers injured on the job, including prescription costs.  Workers harmed on the job rely on the workers’ compensation system to provide services and pay for necessary medical care.

“Our workers’ compensation insurance system has specific processes in place to help ensure drug pricing is handled fairly, maintains transparency, and keeps costs down,” AG Healey said. “Our investigation found that Optum Rx drove up costs in the system, which can increase premiums for small business owners across the state, many of whom have been struggling during the COVID pandemic. This settlement ensures that Optum Rx does not unlawfully profit and follows the rules going forward.”

Optum Rx pays pharmacies that issue workers’ compensation drugs to patients, but also charges insurers and self-insured companies for those drugs under the workers’ compensation insurance system. The AG’s Office alleges that by failing to follow the regulatory process, Optum Rx in some cases allowed excessive drug costs to enter the workers’ compensation insurance system. Increased costs in the workers’ compensation insurance system can result in higher insurance premiums for employers, including thousands of small businesses, required by law to buy this coverage – this can strain small businesses trying to make ends meet. 

The AG’s settlement requires Optum Rx to implement additional procedures to prevent overcharges in the future under the workers’ compensation insurance system. Optum Rx has also agreed to cooperate with the AG’s Office regarding monitoring of future regulatory compliance.

This case is part of an ongoing review by the Attorney General’s Office. AG Healey previously reached settlements with Walgreens, Stop & Shop, and United Pharmacy for similar workers’ compensation drug pricing violations.

This matter was handled by Assistant Attorney General Glenn Kaplan, Mathematician Dr. Burt Feinberg, and Managing Administrative Assistant Gia Kim, all of AG Healey’s Insurance and Financial Services Division.

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