Health care giant confirms $15M settlement — two days after denying it

By: - October 31, 2022 4:50 am

UnitedHealth Group headquarters. Photo from UHG media kit.

A prescription middleman on Friday confirmed that it has promised to pay Ohio $15 million to settle fraud claims against it. When the state announced the deal two days earlier, the company denied it had been finalized.

Ohio Attorney General Dave Yost on Wednesday announced that pharmacy benefit manager OptumRx had agreed to pay $15 million to settle a 2019 lawsuit accusing it of overbilling the Ohio Bureau of Workers’ Compensation between 2015 and 2018, in part by not providing contractually guaranteed discounts.

But late that afternoon, a spokesman for the company, Andrew Krejci, denied that was the case, saying, “We continue to dispute his allegations and are honored to have delivered access to more affordable prescription medications for the Ohio Bureau of Workers’ Compensation and Ohio taxpayers.”

Optum is part of UnitedHealth Group, the nation’s fifth-largest company and owner of the largest health insurer. As a pharmacy benefit manager, Optum has great sway over prescription-drug transactions, including deciding which drugs are covered, negotiating non-transparent rebates with drugmakers and determining how much to reimburse the pharmacies that dispense them.

Optum, CVS Caremark and Express Scripts control more than 70% of that marketplace. Critics allege that they use their size and a lack of transparency to inflate their profits and the ultimate cost of drugs. 

UnitedHealth also does a huge business with Ohio as a Medicaid managed-care provider. It used Optum as its PBM until controversy surrounding huge markups it and CVS made in prescription transactions prompted the department to scrap that arrangement and move to a new system earlier this year.

Despite that controversy and the workers comp lawsuit, the Medicaid department last year awarded United a share of $22 billion worth of Medicaid managed-care business over the next five years.

After Optum denied that a settlement had been finalized, Yost spokeswoman Bethany McCorkle on Friday provided the Capital Journal with a copy of the settlement signed by John Kokkinen, Optum’s senior associate general counsel. 

That afternoon, Krejci confirmed that the deal had been finalized.

“We resolved our outstanding issues yesterday, which is when the agreement was finalized,” he said in an email. He didn’t specify what those issues were.

In addition to Optum, Yost has sued two other companies acting as drug middlemen for state agencies.

In 2021, he sued Centene Corp. over its dealings with the Medicaid department. The suit came after The Columbus Dispatch reported that a pharmacy benefit manager owned by Centene in 2017 appeared to bill the state $20 million for the same services that CVS Caremark said it provided. Centene agreed to pay Ohio $88.3 million in that case and set aside more than $1 billion to settle similar claims in other states.

Yost also sued Express Scripts for an unspecified amount, claiming it defrauded the Ohio Highway Patrol Retirement System. That suit is ongoing.

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Marty Schladen
Marty Schladen

Marty Schladen has been a reporter for decades, working in Indiana, Texas and other places before returning to his native Ohio to work at The Columbus Dispatch in 2017. He's won state and national journalism awards for investigations into utility regulation, public corruption, the environment, prescription drug spending and other matters.