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Around the nation: 7 health insurers claim CVS overcharged for generic drugs


Seven health insurers have filed a class-action lawsuit against CVS Health, claiming the retail chain together with pharmacy benefit managers have overcharged health plans for generic medications offered through its discount program, in today's bite-sized hospital and health industry news from Rhode Island, Texas, and Wisconsin.

  • Rhode Island: Seven health insurers have filed a class-action lawsuit against CVS Health, claiming the retail chain together with pharmacy benefit managers have overcharged health plans for generic medications. According to the lawsuit, CVS hid the real cost of generic drugs sold via its discount program from insurers, reporting only the rates it contracted with insurers, rather than the lower price offered to customers. As a result, the lawsuit claims, insurers reimbursed CVS at artificially higher rates. The lawsuit seeks to recoup what the insurers claim are "many millions of transactions" from more than a decade in which they overpaid CVS. CVS denies the allegations (Tepper, Modern Healthcare, 5/25; Haefner, Becker's Hospital Review, 5/26).
  • Texas: Huntsville Memorial Hospital on Monday announced that Steven Smith, the hospital's CEO, will retire effective June 1. Smith has served as CEO of the hospital since 2019. Joe Thomason, SVP of hospital operations for Community Hospital Corp., will serve as Huntsville's interim CEO (Gooch, Becker's Hospital Review, 5/25).
  • Wisconsin: Republicans in Wisconsin's Legislature on Tuesday convened and ended a special session called for by Gov. Tony Evers (D) to expand Medicaid. Both the State Assembly and State Senate sessions considering the expansion lasted less than a minute each, with lawmakers declining to debate or vote on the measure. According to the Associated Press, Democratic lawmakers have said they want to expand Medicaid this year in particular because of federal coronavirus relief funds available to states that have done so. Republican lawmakers have pushed back, contending that if the program was expanded and federal funding ran out, the state would be responsible for a greater share of the coverage (Bauer, Associated Press, 5/25).

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