NEW ORLEANS (WVUE) - A second insurance company faces a lawsuit as a result of our Medical Waste investigation. Customers of United Healthcare filed a class action suit against that company last week. Now, Cigna is looking at court action for allegedly scheming to defraud customers.
A spreadsheet given to FOX 8 News by a pharmacist in the Midwest shows Cigna Health Insurance overcharged at least 70 customers for prescription medication in one month, at just one community pharmacy. The spreadsheet details how the insurance company paid the pharmacist $25 for an acne cream. But Cigna instructed the pharmacist to collect a $187 copay, overcharging the customer $167. That money went right back to Cigna.
"One of the claims that we brought in the case is a RICO case, a racketeering case," says plaintiffs' attorney Craig Raabe. "And part of the racketeering case is a scheme to defraud - essentially an entity is engaging in fraud use through interstate commerce. And that creates the racketeering. So, it's a term of art in what we do, but in common sense terms it's fraud - saying one thing and doing another."
A Massachusetts woman filed the class action lawsuit against Cigna at a federal court in Connecticut, where Cigna's corporate headquarters is based.
The suit alleges Cigna charged "excessive amounts for prescription drugs - sometimes more than ten times the actual amount that that insurer pays the pharmacy."
"I don't know how you can justify it, to be honest: the overcharges of that magnitude, many multiples of the amount the pharmacist was paid," says Bob Izard, another attorney for the plaintiffs.
This suit mirrors the one filed last week against United Healthcare. The plaintiff alleges a "scheme to defraud," and said Cigna insured that patients pay undisclosed, unauthorized and excessive fees for prescription drugs. This suit references our Medical Waste investigation and uses many of the documents we published on our website.
Maybe most significant: The suit lists nearly 170 different drugs for which Cigna has overcharged customers, including Amoxicillin, Flonase, Prednisone, Tamiflu and Viagra.
"It does seem they are targeted drugs where they can really drive the price down on their end," Raabe says. "And if they keep the copays at [a high] level, that creates a large margin for them."
The suit says policies specifically say that "in no event will... coinsurance (or the copay) for the prescription drug exceed the amount paid by the plan to the pharmacy."
But that didn't happen at a Midwest pharmacy, where Cigna instructed pharmacists to overcharge a customer $137 for a topical cream. They could have saved that much money buying the cream without insurance.
That's one of the many examples of premiums being charged on prescriptions, by the 79th largest company in the United States.
We asked Cigna to comment on this story; the company sent an email, saying it does not remark on pending litigation.