In brief: FTC scrutinizes PBMs – again, Lincare settles, Cardinal breaks ground

By HME News Staff
Updated 4:31 PM CST, Fri January 17, 2025
WASHINGTON – The Federal Trade Commission has published a report that found pharmacy benefit managers Caremark Rx LLC (CVS), Express Scripts and OptumRx marked up numerous specialty generic drugs by hundreds or thousands of percent.
The report, the second produced by the FTC, focused on PBMs influence over specialty generic drugs, including significant price markups by PBMs for cancer, HIV and a variety of other critical drugs.
“The FTC staff’s second interim report finds that the three major pharmacy benefit managers hiked costs for a wide range of lifesaving drugs, including medications to treat heart disease and cancer,” said FTC Chair Lina M. Khan. “The FTC should keep using its tools to investigate practices that may inflate drug costs, squeeze independent pharmacies, and deprive Americans of affordable, accessible health care—and should act swiftly to stop any illegal conduct.”
The significant markups allowed the “Big 3 PBMs” and their affiliated specialty pharmacies to generate more than $7.3 billion in revenue from dispensing drugs in excess of the their estimated acquisition costs from 2017-22. The Big 3 PBMs netted such significant revenues all while patient, employer and other health care plan sponsor payments for drugs steadily increased annually, according to the staff report.
B. Douglas Hoey, CEO of the National Community Pharmacists Association, reacted:
“While the Big 3 have consolidated and vertically integrated over the years, they increasingly declare expensive medications to be ‘specialty’ to steer patients to a PBM-affiliated specialty pharmacy to the tune of $7.3 billion above the drug cost. They crush their competition by reimbursing their own pharmacies as much as 100% more than they reimburse independent pharmacies for the same drug, or more. This exploitative behavior is bad for taxpayers who subsidize Medicare prescription coverage but the FTC report found that commercial employers are getting hosed even worse. It’s no wonder employees are questioning why their employers are listening to insurance brokers who often recommend one of the giant PBMs.”
- Related: The FTC released a previous interim report on PBMs in July.
- Related: Read about Lehan Drugs’ decision to stop offering pharmacy services due to PBM practices.
Lincare settles Medicaid investigation
OLYMPIA, Wash. - The Washington state Attorney General’s Office has announced that Lincare has agreed to pay $1.15 million for allegedly overbilling Medicaid for rental oxygen equipment.
The state, based on an investigation by its Medicaid Fraud Control Division, alleges that Clearwater, Fla.-based Lincare, which has a billing office in Spokane Valley to manage its operations in the Pacific Northwest, knowingly billed rental fees beyond the three years allowed in more than 15 instances between January 2017 and March 2023. It alleges the company overbilled Medicaid for 565 patients and more than $500,000.
In August 2023, the U.S. Attorney’s Office for the Eastern District of Washington announced Lincare agreed to pay $29 million and perform extensive corrective actions to resolve allegations that it overbilled Medicare and Medicare Advantage plans for oxygen equipment.
In a statement to HME News, a Lincare spokesperson said:
“On Jan. 8, 2025, Lincare resolved a dispute with the Washington Attorney General regarding claims for oxygen equipment rental submitted to the Washington Medicaid Program. This dispute concerned the same issues addressed in Lincare’s August 2023 Medicare settlement with the U.S. Attorney’s Office for the Eastern District of Washington addressing the sufficiency of Lincare’s internal billing controls for such rentals. In resolving this matter, Lincare did not admit liability. Lincare remains fully committed to compliance with all applicable laws and regulations.”
The Washington state Attorney General’s Office says the Medicaid Fraud Control Division’s investigation began shortly after the August 2023 resolution and corrective actions were announced.
As part of its agreement with the Attorney General’s Office, Lincare must comply with Washington’s oxygen leasing laws and also ensure it has internal controls to prevent further violations.
Pharmacy groups launch public health consortium
ALEXANDRIA, Va. – The National Community Pharmacists Association’s Innovation Center has formed the Independent Community Pharmacy Consortium for Government Engagement, bringing together pharmacy services administrative organizations, wholesale distributors and pharmacy management system vendors to streamline the engagement of community pharmacies in public health initiatives.
The NCPA says the consortium will facilitate swift and efficient cooperation between public health agencies and the nation’s nearly 19,000 independent community pharmacies, ensuring access to health care, pharmacy, and public health services for the most vulnerable populations in both rural and urban settings.
“Our independent community pharmacies are an indispensable part of the health care and public health infrastructure, providing essential services to those who need them most,” said NCPA Innovation Center President Kurt Proctor. “Through this innovative partnership, we are reinforcing our commitment to the nation’s readiness by ensuring that we can rapidly respond as a sector when the need arises.”
The founding members of the consortium are AlignRx, Cardinal Health, Cencora, Epic, McKesson, and Pharmacy First.
The NCPA says the entities involved in the consortium will support and coordinate the response of their affiliated pharmacies, playing a pivotal role in the overarching public health response to emergencies like the COVID-19 pandemic. This initiative is expected to improve the ability of independent pharmacies to serve their communities effectively during these emergencies, while offering an “easy button” for government organization coordination.
For more information about the consortium and its activities, please visit www.ncpa.org/consortium
Complaint charges provider with upcoding for nutrition formulas
CHARLOTTE, N.C. – The United States and the State of North Carolina have filed a complaint against Benson I. Ejindu alleging he knowingly submitted or caused to be submitted false claims to North Carolina Medicaid for more expensive medical supplies than were actually provided to the Medicaid recipients, a practice known as upcoding. From at least May 19, 2017, through August 23, 2019, Ejindu, through a DME business that he operated under different names, allegedly caused the submission of false claims to North Carolina Medicaid for high-reimbursing, specialized nutritional formula for individuals with rare, inherited metabolic disorders when he knew the Medicaid recipients actually received lower-reimbursing Ensure, PediaSure, Boost and Glucerna drinks. “Durable medical equipment providers that cause the government to pay more than it should for medical equipment and supplies waste taxpayers’ dollars and raise the cost of health care for everyone,” said Dena J. King, U.S. Attorney for the Western District of North Carolina. “Our office is committed to working with the North Carolina Attorney General’s Office and our law enforcement partners to put a stop to improper billing practices that exploit Medicaid, a taxpayer funded program that many people depend on to cover their health care needs.” The matter is being investigated by the FBI, HHS-OIG and the North Carolina Attorney General’s Medicaid Investigations Division. The claims asserted against Ejindu are allegations only and there has been no determination of liability.
Rehab Industries hosts successful conference
INDIANAPOLIS – Rehab Industries, a partnership between Rehab Medical, Cork Medical and Forza Commercial Real Estate, hosted its annual conference Jan. 9-10, bringing together more than 700 employees for education, networking and an awards ceremony. The event, themed “Scaling New Heights,” focused on three objectives: educating employees, aligning teams around shared values, and celebrating individual and collective achievements. “The Rehab Industries conference is more than just an event; it’s a reflection of its core values,” said Kevin Gearheart, Rehab Industries partner and president of Rehab Medical. “By investing in a company-wide, in-person gathering, the organization fosters stronger connections among its teams, celebrates their collective successes, and ignites their shared passion for delivering impactful solutions. This conference serves as a cornerstone of the company’s commitment to personal and professional growth for every employee.” Rehab Medical, Cork Medical and Forza Commercial Real Estate have seen quadruple employee growth across the portfolio over the past 12 years and have won numerous awards for workplace culture. Rehab Medical was named the 2024 HME Provider of the Year in October.
AAHomecare to grow payer relations team
ALEXANDRIA, Va. - AAHomecare is currently searching for a new senior manager of payer relations. The person will be responsible for working in conjunction with payer relations leadership in developing an ongoing industry strategy involving commercial managed care, Medicaid managed care organizations, Medicare Advantage, and state Medicaid programs. AAHomecare is looking for someone to develop ongoing relationships with payers, industry stakeholders at state/regional associations, manufacturers, providers, and advocacy groups. The person will help create reference materials to assist membership in navigating payer relationships and serve as a resource in guiding members through relationship development with payers. “We are looking for an experienced payer relations industry professional who can utilize payer relationships to engage new membership and retain current membership,” said Laura Williard, senior vice president of payer relations. “Our team travels, and this person will help us support state associations and state legislative and payer opportunities, making the role 40% travel.” Reach out to Laura Williard at lauraw@aahomecare.org for a job description or to submit a resume.
Cardinal Health building new distribution center
DUBLIN, Ohio – Cardinal Health says construction is underway on a new distribution center in Fort Worth, Texas, to support its at-Home Solutions business, which provides medical supplies to more than 5 million patients annually in the United States. The new 340,000-square-foot distribution center will consolidate two existing warehouses into one larger facility, creating approximately 74,000 additional square feet of inventory capacity, and will retain the current workforce. Once open, the facility will ship an average of 10,000 packages per day to patient homes across the country. “Our business plays a critical role in the lives of the patients we serve, and we are honored to continue this important work in the Fort Worth community,” said Rob Schlissberg, president, Cardinal Health at-Home Solutions. “When it comes to delivering medical supplies directly to patients in need, there is absolutely no room for error. Our team in Fort Worth is passionate and committed to delivering on our promises, and I am thrilled to see what they accomplish in this new space.” Similar to the distribution centers recently opened in South Carolina and Ohio, this new facility is fully equipped with some of the world’s leading robotics and automation technologies. Key technology features include 74 robots, a 1,500-foot-long automated conveyor system and four automated box-making machines that create 500 custom boxes per hour while minimizing waste. Additionally, the facility will use a leading cloud-based warehouse management system that uses artificial intelligence to maintain resiliency and flexibility in inventory volume management. The system is used across at-Home Solutions’ entire warehouse network to unify distribution operations across demand, labor, robotics, automation, inventory and transportation within a single platform. The building is anticipated to be fully operational in the summer of 2025.
Henry Schein seeds relief fund for California wildfires
MELVILLE, N.Y. – Henry Schein has opened the Henry Schein Cares Foundation 2025 Relief Fund to support those impacted by the Los Angeles area wildfires. Contributions will support the provision of critical health care supplies and resources to those impacted by the wildfires throughout the city. The company and the foundation will donate an initial $25,000 each to support relief efforts and the company will match employee contributions up to another $50,000, for a cash total of up to $150,000. “The wildfires in Los Angeles are devastating to watch, and Team Schein stands in solidarity with everyone who has been affected as well as all the first responders and individuals who are committed to supporting relief efforts,” said Stanley M. Bergman, chairman of the board and CEO of Henry Schein. “In response to this emergency, we will partner with trusted and long-standing relief and recovery charitable partners to ensure the availability of the critical supplies and resources required to provide health care within affected communities. Team Schein remains committed to helping health happen in light of this evolving situation.” Henry Schein will also donate essential health care supplies up to an initial amount of $150,000 to its partner relief organizations operating on the ground, bringing its total commitment to as much as $300,000. Anyone who wishes to contribute to the 2025 Relief Fund can donate by visiting www.henryschein.com/foundationdonate and selecting “2025 Relief Fund” for the gift designation.
iNRRTS publication goes digital
LUBBOCK, Texas – iNRRTS has re-launched DIRECTIONS Magazine in a digital format that improves user experience, ensuring readers get what they want, and advertisers receive the attention they deserve. “By leveraging our digital presence, we ensure our brand stays ahead of the curve, connecting with a tech-savvy, digitally active audience who consumes content in innovative ways,” says Bill Noelting, iNRRTS director of marketing. “Embracing digital isn’t just adapting; it’s thriving in an ever-changing market and beginning in 2025, we want to take advantage of these new, evolving avenues and strategies for us, for our readers and for our advertisers.” In addition to graphic and digital redesign elements, each issue of DIRECTIONS magazine will be focused on a specific clinical topic with articles and features from experts in the field of complex rehab technology. “We believe that with our updates, DIRECTIONS Magazine will continue to be a powerful platform for connecting with CRT professionals like never before,” said Andrea Madsen, ATP, executive director for iNRRTS. “As the Journal of Complex Rehab Technology, DIRECTIONS will continue to bring a high-quality educational focus in each issue.” DIRECTIONS Magazine, which is published six times a year, can be found on the iNRRTS website at www.nrrts.org.
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