Court sides with pharmacists in suit against provider
In an order dated 28 July, the Allegheny County Court of Common Pleas ruled in favor of a group of 83 western Pennsylvania pharmacists in their suit against UPMC Health Plan/Best Health Care of Western Pennsylvania. The pharmacists were seeking to prevent the insurance provider from unilaterally cutting future prescription reimbursements to their pharmacies as a means of making up for a "processing error" by UPMC Health Plan/Best Health Care in 2001 and early 2002, and to have the prescription transactions confirmed as binding contracts that cannot be altered after the fact.
PITTSBURGH — In an order dated 28 July, the Allegheny County Court of Common Pleas ruled in favor of a group of 83 western Pennsylvania pharmacists in their suit against UPMC Health Plan/Best Health Care of Western Pennsylvania.
The pharmacists were seeking to prevent the insurance provider from unilaterally cutting future prescription reimbursements to their pharmacies as a means of making up for a "processing error" by UPMC Health Plan/Best Health Care in 2001 and early 2002, and to have the prescription transactions confirmed as binding contracts that cannot be altered after the fact.
The judge in the case, Judith L. A. Friedman, decided that under the contracts between the pharmacies and Giant Eagle, as agent for UPMC Health Plan, Inc., UPMC "has no right to recover, directly or indirectly" from the pharmacies any "alleged overpayments" during the period from June 1, 2001 through May 31, 2002. The judge ruled that each individual electronic transaction under the contracts in force at the time was a separate contract as to price, and once that price was transmitted to a pharmacy by UPMC's agent, Argus Health Systems, Inc., and the pharmacy accepted it and filled the prescription, the price was binding.
Judge Friedman also wrote that UPMC Health Plan was not entitled to vary the price for a particular transaction that had been fully performed (i.e., the pharmacy accepted a price that UPMC, through Argus, agreed to pay and dispensed the prescription). The judge wrote that contracts between the pharmacies and UPMC Health Plan provided for a series of separate transactions with separate offers and acceptances as to price. Once a prescription was filled at a price UPMC approved, that amount was owed the pharmacy.
On the issue of there having been a mistake in pricing, Judge Friedman wrote "The issue of mistake arises only in the relationship not in question here, that of Defendant (UPMC Health Plans, Inc.) and its agent, Argus."
"We obviously feel vindicated by the Court's decision, and are very pleased by the clarity and specificity of the Order," said Gerard O'Hare, a plaintiff and a registered pharmacist who owns Jeffreys Drug Store in Canonsburg, Pa. "We maintained that each time a prescription and reimbursement were authorized by UPMC Health Plan/Best Health Care, there was a contract between the pharmacies and the insurer, and on that basis, the pharmacies provided services to plan participants. The prescriptions we filled for our customers in UPMC health insurance plans were approved, including the amount due the pharmacy. The Court has now said we were right."
O'Hare noted that pharmacists' most important responsibility is dispensing prescriptions properly and ethically.
"Our focus is on taking the best care of our customers," he said. "With this decision, we can renew our energies in that direction, without the distraction of a legal battle with an insurance provider over what they said was their mistake to start with."
The suit was begun in September of 2002, when a petition for an injunction and a complaint were filed in the Allegheny County Court of Common Pleas by Pittsburgh law firm Grogan Graffam, P.C., on behalf of 16 original plaintiffs. More than 60 other pharmacists subsequently joined the legal action, for a total of 100 pharmacies in the counties of Allegheny, Armstrong, Beaver, Bedford, Butler, Clarion, Fayette, Greene, Indiana, Jefferson, Lawrence, Mercer, Somerset, Venango, Washington and Westmoreland.
The complaint and the petition for the injunction had asked the court to stop UPMC Health Plan from docking reimbursements to the pharmacies, and to declare the original prescription transactions as binding contracts that cannot be altered after the fact.
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