NEW ORLEANS (WVUE) - Richard Burke helped create United HealthCare. He's now chairman of the board and, according to company records, he's holding on to $287 million of United stock. So far in 2016, Burke's United stock has helped pay him millions. He sold shares in February and May, landing a total of $8 million - a small percentage of the money still available to United's top director.
"This practice needs to stop," says U.S. Rep. Garret Graves (R-Louisiana),
The practice the congressman is referring to the overcharging of United customers for prescription medication.
"It's entirely misleading," Graves says. "I think it's unethical, I think it's dishonest and I think it should be barred."
Our investigation revealed that United HealthCare, the nation's largest insurance provider, and its pharmacy benefit manager, Optum, make customers pay a premium on some prescription drugs, charging them more than the actual cost. Pharmacists call it a "clawback" – United overcharges and claws back the money from the pharmacy and customer.
"This is one of those situations where I think it's really unfortunate that you have to pass a law to do the right thing," Graves tells us. "You shouldn't have to legislate morality in this case. But if this is the way that things are going to happen, absolutely – we need to pass a law and provide for transparency here, and let consumers act as consumers and make educated decisions."
In Louisiana, a helpful pharmacist will now be able to help some consumers make better decisions. Contracts with those insurance companies had prevented pharmacists from telling customers when drugs could be purchased cheaper with cash without using insurance. Louisiana lawmakers passed a bill that allows that to happen. But only one other state, Arkansas, has a similar law.
"I think it needs to be a federal law," says Doug Hoey of the National Community Pharmacists Association. "I mean, I think there needs to be federal protection that allows pharmacists to always do what's in the best interests of the patient, no matter what some private entity or middleman has told them they have to do."
Without a federal law, pharmacists have been scared to talk.
A pharmacist in another state sent us a letter he received from Optum. Optum scolded the pharmacist, writing they "recently discovered that pharmacy advised members that utilizing a cash price for their prescription is a better deal than using their insurance benefits." Optum wrote that telling customers a cheaper price exists is a "violation of the agreement," that Optum "takes these matters very seriously" and that "failure to timely comply with this notice could result in further disciplinary action, up to and including termination from all Optum pharmacy networks."
"People wouldn't believe it," Hoey says. "The gag clauses prevent pharmacies not only from talking to consumers about lower drug prices… I'll just lay it out: they are basically an indentured servant to the PBM to do whatever they tell them to do."
Last month, following our Medical Waste series, the Hoey's NCPA surveyed its members. 49 percent of respondents found 10 to 50 examples of clawbacks per month; 35 percent say it happens more than 50 times a month. And 59 percent think clawbacks also occur in the Medicare Part D program, which could be significant.
"If it's happening in Medicare Part D - which we have some evidence to show or suggest that it is happening with part d, at least with some plans - then, you know, we can't say that that's fraud but we think it probably bears further investigation to say, is that a type of Medicare fraud which all taxpayers are subsidizing," Hoey says.
Are the PBM's overcharging the federal government? "I think that's a question asked and a question that needs to be answered," Hoey responds. "I don't think we can say unequivocally yes but, just based on the evidence, I don't think anyone can say unequivocally no."
A woman from rural Pennsylvania found our stories through Facebook, and sent us this message: "The clawback thing happened to me and I am mad." In May, United and Optum charged her $25 for her thyroid medication. A month later, after she found our stories on the internet, she decided to ask for the cash price without using her United insurance. That cost $9.99; United and Optum overcharged her 15 bucks.
"I think it is a lack of transparency," Graves warns. "It is a way to back-door additional premiums out of people. And I just think it's not honest."
In a statement, Optum told us its overpayment program helped reduce costs for consumers. But Graves wants to make sure healthcare changes of the past few years, including the Affordable Care Act, have not forced companies to overcharge to make up for losses elsewhere.
"Is this a way to simply be made whole, because the insurance premiums aren't, because the way insurance has happened over the last few years?" Graves asks. "Or is this just absolutely a greedy move by some of these companies to try and get every nickel and dime they can from people?"
United documents don't suggest they're struggling. In April, the company increased its projected revenue for the year to $182 billion.
Its stock price has also been surging. In the past five years, United has averaged an annual return of 29 percent. During the same time period, the Dow Jones average has been up an average of 8.3 percent. Through six months of this year, United's stock is up 21 percent; the Dow is up 6 percent.
Optum, a subsidiary of United, also seems to be thriving. According to a company news release in April, Optum's overall revenue jumped 54 percent from the previous fiscal year. That's roughly the same time period when pharmacists around the country saw clawbacks to customers.
All of this has led to big financial rewards for another United executive. Stephen Hemsley now runs United; he's the CEO. Last year, the company paid him $14.5 million.
But it's compensation in United stock where Hemsley gets the really big money. Right now, records show he's sitting on $467 million of United stock. He could have had more, too. But records show Hemsley decided to sell 200,000 shares in January, paying himself $22 million - right around the same time period we started discovering his company is overcharging customers for prescription drugs.