CHICAGO (CN) – Walgreens, CVS and other pharmacies systematically overcharged diabetes patients for their insulin pump supplies when they should have been covered by Medicare, according to a federal class action.
“Defendants misapplied, or did not apply, benefits to which Medicare Plan participants were entitled and instead repeatedly and systematically overcharged diabetic patients with excessive out-of-pockets fees for insulin pump supplies that would have otherwise been considered covered services by Medicare and subject to the Medicare reimbursement rates,” lead plaintiff Robert Mayberry says in the complaint filed Friday in Chicago federal court.
The pharmacies – Walgreens, CVS, Albertsons and SuperValu – allegedly submitted reimbursement claims for insulin pump supplies under Medicare Part D, which offers prescription drug benefits, rather than Medicare Part B, the correct section for medical equipment costs.
“Not only is the patient confronted with out-of-pocket expenses for the insulin pump supplies, but the patient is also at risk for reaching Medicare Part D limits,” the lawsuit states. “Once reaching the limits, the patient incurs out-of-pocket expenses for all prescriptions filled beyond those limits, until reaching the catastrophic coverage threshold. This is known as the donut hole.”
The complaint further explains the “donut hole” as a coverage gap in Medicare Part D insurance plans that, in 2016, left patients responsible for paying out-of-pocket for drug costs over $3,310 but under $4,850.
An estimated 29 million people in the U.S. suffer from diabetes, and approximately 500,000 people use an insulin pump.
The class claims the pharmacies intentionally submitted reimbursement claims under the wrong Medicare section, believing that patients would be unaware of the error and pay the higher out-of-pocket price for the supplies.
Diabetes patients also recently filed a RICO action against the three major manufacturers of insulin, claiming they schemed to inflate the cost of the life-saving medication for their own profit.
Friday’s lawsuit seeks punitive damages for claims of fraud and unjust enrichment, and an order compelling the pharmacies to establish a program to reimburse patients for previously denied claims for insulin pump supplies.
The proposed class is represented by Shannon McNulty with Clifford Law Offices in Chicago.
Neither Walgreens nor CVS responded Wednesday to a request for comment.
Read the Top 8
Sign up for the Top 8, a roundup of the day's top stories delivered directly to your inbox Monday through Friday.