United States District Court, E.D. Missouri, Eastern Division
EXPRESS SCRIPTS, INC. and MEDCO HEALTH SOLUTIONS Plaintiff,
PHARMLAND, LLC D/B/A LIFECARE PHARMACY, et al., Defendants.
OPINION, MEMORANDUM AND ORDER
EDWARD AUTREY UNITED STATES DISTRICT JUDGE
matter is before the Court on Defendants' Motion to
Dismiss Count IV of Plaintiff's Second Amended Complaint,
[Doc. No. 51]. Plaintiff opposes the Motion. For the reasons
set forth below, the Motion is granted.
Second Amended Complaint alleges:
Scripts is a Pharmacy Benefit Manager (“PBM”)
offering a range of services to clients that include managed
care organizations, health insurers, third-party
administrators, employers, union-sponsored benefit plans,
workers' compensation plans, and government health
programs. Express Scripts helps clients improve healthcare
outcomes for their members while helping plan sponsors
address access and affordability concerns resulting from
rising drug costs.
drugs are dispensed to members of the health plans Express
Scripts serves through networks of retail pharmacies under
non-exclusive contracts with Express Scripts.
integrity and reputation of Express Scripts' pharmacy
provider network is critical, so Express Scripts maintains an
ongoing network provider quality assurance, audit, and
was a member of one or more Express Scripts pharmacy networks
pursuant to an Express Scripts, Inc. Pharmacy Provider
Agreement (“Agreement”). The Agreement between
Lifecare and Express Scripts was, at all relevant times, a
valid contract and supported by adequate consideration. When
Lifecare agreed to participate in the Express Scripts
pharmacy networks, it agreed to abide by the Agreement.
years, Lifecare reported to Express Scripts and Medco that it
operated a traditional retail pharmacy, with less than 5% of
its business devoted to dispensing compounded medications.
However, upon information and belief, this representation was
untrue. After identifying multiple suspect claims submitted
by Lifecare, Express Scripts initiated an investigation in
early December 2014 based on suspicion of fraudulent
about December 31, 2014, Express Scripts notified Lifecare
that its investigation had uncovered “multiple
discrepancies, ” and that Express Scripts intended to
withhold payments to Lifecare until the investigation was
same date, Express Scripts wrote to Lifecare requesting
documentation to verify that certain prescriptions were
actually prescribed and dispensed between May and November of
2014. Lifecare was to provide the verification documentation
by no later than January 7, 2015. No documentation was ever
provided. Instead, Lifecare abruptly and without any
explanation reversed $1, 311, 618.78 in claims already paid
by Express Scripts to Lifecare, leaving Lifecare's
account with a $1, 308, 958.50 balance due to Express
same time, Lifecare closed its retail operations, ceased all
pharmacy operations, and sold its location to Walgreens.
normal conditions, amounts reversed by a provider like
Lifecare would be offset against future payments. However,
because Lifecare closed and ceased submitting new claims to
Express Scripts, Express Scripts was prevented from recouping
the amount of the reversed claims.
multiple requests for payment, Lifecare never paid Express
Scripts the amount owed. On March 5, 2015, Express Scripts
provided written notification that it was terminating
Lifecare as an Express Scripts pharmacy provider for failure
to cooperate in the audit and investigation.
March 7, 2015, Express Scripts provided Lifecare with written
notification of an additional $702, 014.08 in uncontested
discrepancies arising out of the investigation initiated in
December 2014. Lifecare was to remit payment by March 23,
2015. Lifecare never paid Express Scripts for the discrepant
the Agreement, Express Scripts is entitled to recover funds
from Lifecare associated with claims that were not ...