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Optum audit shows possible law violation, lower payments to independent pharmacies

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mississippitoday.org – Gwen Dilworth – 2024-11-07 06:00:00

The findings of a recent audit of a major company that manages prescription benefits revealed it may have violated Mississippi law.

The review of Minnesota-based Optum’s business practices by the Mississippi Board of Pharmacy indicated that the company paid independent pharmacies in Mississippi rates lower than chains and Optum-affiliated pharmacies for the same prescription drugs. 

The audit uncovered over 75,000 instances in which Optum-affiliated pharmacies’ lowest payments for a prescription drug were higher than at unaffiliated pharmacies in one year, including chain and independent drug stores. 

Mississippi state law prohibits pharmacy benefit managers from reimbursing their affiliate pharmacies, or ones they own, at higher rates than non-affiliate pharmacies for the same services. 

In some cases, patients footed the bill: consumers were almost twice as likely to pay the full cost of a prescription drug claim without contributions from their insurance plan at independent pharmacies than at affiliated pharmacies. 

The Board of Pharmacy will hold an administrative hearing based on the alleged violations of Mississippi law on Dec. 19. Board staff declined to answer questions about the audit or its findings. 

“I think this proves that we need to have more transparency, we need to have more PBM reform in Mississippi and across the country and even on a federal level,” said Robert Dozier, the executive director of the Mississippi Independent Pharmacy Association, an organization that advocates for 180 pharmacy members.

Optum declined to answer specific questions about the audit. The company has identified errors in the audit’s findings and methodology and submitted them to the Board of Pharmacy, said Isaac Sorenson, a spokesperson for Optum. 

“The pharmacy – and local pharmacists – play a vital role in supporting people’s health and we are committed to paying them fairly,” he said. “…For pharmacies in rural and underserved communities, Optum Rx is deepening its commitment to support their role by launching new programs, expanding existing initiatives and launching a new pharmacy network option for customers.” 

He said the new pharmacy network option will provide pharmacies with increased reimbursements. Generic drugs will be reimbursed at 5% higher rates and brand name drugs at .2% higher rates. 

Optum is owned by health care behemoth UnitedHealth Group Inc., the U.S.’ most profitable health care company and the owner of the nation’s largest health insurance company, UnitedHealthcare. In 2023, the company reaped $32.4 billion in earnings. 

Pharmacy benefit managers are private companies that act as middlemen between pharmacies, drug manufacturers and insurers. They process prescription drug claims, negotiate pricing and conditions for access to drugs and manage retail pharmacy networks. 

Optum is one of the largest three pharmacy benefit managers in the U.S., which together account for 79% of prescription drug claims nationwide. 

The results of the audit echoed some of the conclusions of a Federal Trade Commission report published in July: large pharmacy benefit managers pay their own, affiliated pharmacies significantly more than other pharmacies and set reimbursement rates at untenably low levels for independent drug stores, or retail pharmacies not owned by a publicly traded company or owned by a large chain, said the report. 

Mississippi Today reported last month that many Mississippi independent pharmacists fear they may be forced to close their businesses due to low reimbursement rates from pharmacy benefit managers. 

Pharmacy benefit managers have an incentive to steer customers towards their affiliate pharmacies and compensate them at higher rates, which can disadvantage unaffiliated pharmacies and lead to higher drug costs, said the Federal Trade Commission. 

Optum’s affiliate pharmacies include Optum Home Delivery Pharmacy and Optum Specialty Pharmacy. 

The audit revealed that Optum uses 49 different maximum cost lists, or schedules created by pharmacy benefit managers that determine the highest price they will pay pharmacies for generic drugs. Maximum cost lists are proprietary and confidential, even to the pharmacies that are reimbursed based on the lists, and change continuously.

“I think that’s 48 too many,” said Dozier. “There should only be one MAC list.”

Fifteen are used exclusively at independent pharmacies and 22 are used solely at chain pharmacies. 

An analysis of the maximum allowable cost lists showed that independent pharmacies were reimbursed at rates 74% lower than chain pharmacies on average.

An analysis of a generic drug used to treat bacterial infections yielded a payment to an Optum-affiliated pharmacy that was eight times higher than the lowest-paid independent pharmacy on the same day. Chain and affiliate pharmacies were paid over 20 times as much as independent pharmacies for a generic drug used to treat stomach and esophagus problems.

Pharmacies’ attempts to contest low reimbursement rates were often unsuccessful, showed the audit. 

Ninety-eight percent of pharmacy appeals were denied, most commonly because they did not include information about how much the pharmacy paid to acquire the medication from a wholesaler. 

Mississippi law prohibits pharmacy benefit managers from reimbursing pharmacies at rates below their cost to acquire the drug, even when using a maximum allowable cost list. But the audit revealed over 400 times that Optum denied pharmacies’ appeals on those grounds, saying that the maximum cost list was accurate. 

The audit, which studied Optum in 2022, was the first commissioned by the Mississippi Board of Pharmacy after revisions to state law in 2020 gave it more regulatory authority over pharmacy benefit managers. 

It took the board several years to hire staff to enact the law and receive approval to increase its budget due to the high costs of audits, the board’s executive director Susan McCoy told lawmakers at the House Select Committee on Prescription Drugs Aug. 21 at the Capitol.

The board also has pending administrative proceedings with the other largest pharmacy benefit managers in the country, Express Scripts and CVS Caremark. Neither is the result of an audit. Both hearings are scheduled for Nov. 21. 

Optum has already faced scrutiny for its business practices in Mississippi. In August, Attorney General Lynn Fitch filed a lawsuit alleging that Optum and several other pharmacy benefit managers stoked the opioid epidemic by plotting with manufacturers to increase sales of the addictive drugs and boost their profits. The suit also named Evernorth Health and Express Scripts, along with the companies’ subsidiaries. 

This article first appeared on Mississippi Today and is republished here under a Creative Commons license.

Mississippi Today

Despite bribery charges, Mississippi prosecutor, other officials can remain in office

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mississippitoday.org – Caleb Bedillion, The Marshall Project – 2024-11-12 11:00:00

Sweeping corruption charges have rocked local government in Mississippi’s capital city, with potentially significant implications for the local legal system. 

During arraignments on Thursday, federal prosecutors charged Hinds County District Attorney Jody Owens, Jackson Mayor Chokwe Antar Lumumba and Jackson City Councilmember Aaron Banks with a string of bribery and corruption charges.

All three pleaded not guilty and were released pending trial.

The charges stem from an undercover sting operation in which FBI agents posed as real estate developers and allegedly provided bribes to win the support of local officials.

Former Jackson City Councilmember Angelique Lee and local businessman Sherik Marve’ Smith previously pleaded guilty to corruption charges as part of plea agreements. 

All three officials charged Thursday have influence over the local legal system in Mississippi’s largest city and county. Owens is the county’s prosecutor, with sweeping power over felony prosecutions in a county that has struggled with violent crime, a backlog of cases and a troubled jail. 

Lumumba appoints the Jackson police chief. Lumumba has fought against the creation of a state-controlled police force with jurisdiction within certain areas of the city, as well as a special state-controlled court for those areas. His beleaguered legal position may only strengthen the efforts of statewide leaders to exert more control over local policy within the state’s capital city.

Banks, as a councilmember, votes to confirm or reject Lumumba’s appointments, including police chief. The city council also sets the budget for city government departments, including the police department and the municipal court. The Jackson City Council can also impose other policies, including a controversial youth curfew policy that came earlier this year.

Can Owens, Lumumba and Banks remain in office while facing criminal charges?

Yes. While the Mississippi constitution forbids anyone who has been convicted of almost all felonies from holding elected office, nothing requires a person to resign or take a leave of absence from their job before a conviction. 

Owens on Thursday indicated no plans to resign. Instead, he said he would fight what he called a “flawed FBI investigation” and said, “I’m going to get back to protecting Hinds County and being the district attorney that you elected me to be.”

Owens’ predecessor, Robert Shuler Smith, faced multiple state criminal prosecutions during his tenure in elected office and never resigned. None of the charges brought against him by then-Attorney General Jim Hood ended in a conviction.

In 2016, then-state Rep. Nick Bain filed a bill that would have created a process to remove local officials from office following an indictment, but that bill never advanced. 

The state constitution allows people convicted of manslaughter and state or federal tax crimes to hold elected office. 

What happens if Owens resigns?

Owens was most recently elected in 2023 for a four-year term that began January 2024 and will run through the end of 2027. If he’s not convicted before then, he can complete the entire term and even qualify for reelection again. If he were to be convicted or plead guilty before the end of 2027, he would be removed from office.

On Thursday, U.S. District Court Judge Daniel P. Jordan set a trial date for Jan. 6, but delays in criminal cases are common.

If Owens resigns or is removed with more than six months remaining in his term, Gov. Tate Reeves will appoint someone to replace him until a special election can occur. Special elections to replace a district attorney generally occur as needed in November of each year. 

If Owens were to resign now, that means a gubernatorial appointee would serve as Hinds County’s district attorney for a year until a special election in 2025. Any qualifying candidate could run in the special election to fulfill the term, including the gubernatorial appointee. 

If Owens were to resign or be removed from office with less than six months remaining in his term, the governor would simply appoint someone to fulfill the term and the winner of the regularly scheduled general election would take office at the beginning of the next term. 

What would happen if Lumumba or Banks were to resign or be removed from office?

The current terms of both Lumumba and Bank conclude next year, with municipal general elections set for June and new terms beginning in July.

Lumumba said on Thursday that he will continue to run for reelection. Banks declined to answer questions about whether he intends to remain in office or to seek another term.

If either Lumumba or Banks were to resign with less than six months remaining in their term, state law requires that the Jackson City Council would replace either with interim appointments who would serve the remaining months of the terms.

If either man were to resign or be removed before the end of 2024, the City Council would have to order a special election to fill the vacant posts.

Can voters recall elected officials in Mississippi?

Mississippi does have an obscure and very roundabout recall process, but only for county officials, despite several unsuccessful efforts to expand the law. State Sen. Jeremy England, a Republican from the Gulf Coast, has filed some of those bills, and said he did not think a district attorney could be recalled under the current law, but they could have been recalled under a bill he has filed before. 

This article first appeared on Mississippi Today and is republished here under a Creative Commons license.

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On this day in 1914

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mississippitoday.org – Jerry Mitchell – 2024-11-12 07:00:00

Nov. 12, 1914

Civil rights leader William Monroe Trotter pictured in 1915. Credit: Wikipedia

Civil rights leader William Monroe Trotter led a delegation that confronted President Woodrow Wilson. 

Raised in Hyde Park, Massachusetts, Trotter had more education than the president. He had graduate and postgraduate degrees from Harvard University, where he became the first Black member of Phi Beta Kappa. 

“New Englanders liked to talk as if ‘the Negro problem’ afflicted only the South,” The New Yorker wrote of him, “but Trotter looked around his beloved Boston and saw segregation in the city’s churches, gyms, and hospitals. This ‘fixed caste of color’ meant that ‘every colored American would be a civic outcast, forever alien in public life,’ he wrote.” 

In 1901, he started The Guardian with the motto: “For every right, with all thy might.” The newspaper called itself “an organ which is to voice intelligently the needs and aspirations” of Black Americans.” 

Both he and his wife, Deenie, published The Guardian each Saturday, only missing two issues: “The Trotters had no children and did not want any; The Guardian was their child.” 

In their pages, Trotter leveled vicious attacks against Booker T. Washington and his accommodation policies, calling him “the Great Traitor.” When Trotter began to question Washington at a gathering of 2,000, a fight broke out, which became known as “the Boston riot,” and he was arrested, spending 30 days in jail. The wealth his family once enjoyed turned to poverty because of the money he sunk into his newspaper. 

“It has cost me considerable money, but I could not keep out of it,” he wrote. “I can now feel that I am doing my duty and trying to show the light to those in darkness and keep them from at least being duped into helping in their own enslavement.” 

He turned his attention to political candidates he felt would support African Americans and began backing Wilson, whom he met and shook hands with in 1912 “with great cordiality.” 

A year later, he and Ida B. Wells and other civil rights leaders expressed dismay over the reinstitution of Jim Crow and even shared a chart that showed which federal offices had begun separating workers by race. 

In 1914, Trotter and other Black leaders appeared at the White House with 20,000 signatures, demanding an end to Jim Crow in federal offices. The leaders told Wilson they felt betrayed because they had supported him in the election, and he had since reinstituted segregation in the federal government that included separate toilets and dismissed high-level Black appointees. 

“Only two years ago you were heralded as perhaps the second Lincoln,” Trotter said, “and now the Afro-American leaders who supported you are hounded as false leaders and traitors to their race.” 

He reminded the president — who had been busy championing his “New Freedom” program to restore fair-labor practices — that he had promised to aid Black Americans in “advancing the interest of their race in the United States. … Have you a ‘New Freedom’ for white Americans and a new slavery for your Afro-American fellow citizens? God forbid!” 

Wilson responded that “segregation is not humiliating but a benefit” and that he had put the practice back in place because of friction between Black and white clerks. Trotter challenged this claim, calling Jim Crow humiliating to Black workers. 

Wilson stuck to his guns, telling Trotter that if he and other Black Americans think “you are being humiliated, you will believe it.” The exchange lasted 45 minutes, and the president challenged Trotter’s “tone” as offensive: “You have spoiled the whole cause for which you came.” 

The civil rights leader responded, “I am pleading for simple justice. If my tone has seemed so contentious, why has my tone been misunderstood?” 

The argument landed on the front page of The New York Times. During World War I, the State Department refused to give Trotter a passport to Paris. To get around the restriction, he took a job as a cook on a freighter to France, and when he began reporting on the plight of Black soldiers, French newspapers shared his reporting, and he spoke there about discrimination against African Americans. 

When Trotter returned home, he was welcomed by 2,000 supporters. He unsuccessfully championed a section added to Wilson’s 14 Points for peace that would say, “The elimination of civil, political, and judicial distinctions based on race or color in all nations for the new era of freedom everywhere.” 

Trotter helped found the Niagara Movement, a forerunner of the NAACP. The civil rights organization adopted his proposal to address segregated transportation as a grievance, but the group rejected his proposal to make lynching a federal crime. 

He championed cases the NAACP was slower to pursue, including Jane Bosfield, a Black woman was told she could only work for a Massachusetts hospital if she ate separately from her white fellow workers. 

When the racist movie, ‘The Birth of a Nation’, appeared on a screen, the national NAACP tried to raise money for a rival film to counter those lies, but Trotter believed in direct action. His protests succeeded in shutting down a play that was the basis for the movie, which depicted Klansmen as heroes. After failing to halt the debut of the film in Boston, he teamed up with Roman Catholics to get a revival showing canceled. 

His tactics were later used by the modern civil rights movement “to integrate lunch counters, buses, schools, and other essential spaces,” The New Yorker wrote. And his mindset “incubated the politics of Malcolm X and of the Reverend Martin Luther King Jr.” 

A multicultural center at the University of Michigan bears Trotter’s name, and his first home in Dorchester is now a National Historic Landmark. He made the list of the 100 Greatest African Americans.

This article first appeared on Mississippi Today and is republished here under a Creative Commons license.

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DOJ lawsuit: Mississippi Senate paid Black attorney half what white colleagues made

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mississippitoday.org – Emily Wagster Pettus, Associated Press – 2024-11-11 09:25:00

JACKSON, Miss. (AP) — The Mississippi Senate discriminated against a Black attorney by paying her about half of what her white colleagues were paid for doing the same job, the U.S. Justice Department says in a lawsuit it filed Friday.

“Discriminatory employment practices, like paying a Black employee less than their white colleagues for the same work, are not only unfair, they are unlawful,” said Assistant Attorney General Kristen Clarke, head of the Justice Department’s Civil Rights Division.

Kristie Metcalfe worked as a staff attorney for the Mississippi Senate’s Legislative Services Office from December 2011 to November 2019. Attorneys for the nonpartisan office write bills and handle other legal questions for the 52 senators. Many of them stay on the job for decades.

The Senate office employed only white attorneys for at least 34 years before Metcalfe was hired, and she was the only Black attorney on staff during her time there, the lawsuit said.

Metcalfe’s starting salary was $55,000, while other Senate staff attorneys were paid $95,550 to $121,800, according to the lawsuit. The other attorneys received pay raises about a month after Metcalfe was hired, making their salary range $114,000 to $136,416. Metcalfe did not receive a raise then.

The current governor, Republican Tate Reeves, presided over the Senate as lieutenant governor from January 2012 until January 2020 — most of the time Metcalfe worked for the Senate.

The Associated Press sought comment about the lawsuit Friday from Reeves and current Lt. Gov. Delbert Hosemann, who is also a Republican.

“We do not comment on pending litigation,” said the current secretary of the Senate, Amanda Frusha White, who works for Hosemann.

Metcalfe’s salary remained $40,000 to $60,000 less than her lowest-paid white colleague during her years on the job, the lawsuit said. It also said the Senate hired another attorney, a white man, in December 2018 and set his salary at $101,500, which was $24,335 more than Metcalfe was being paid at the time.

Metcalfe and the new attorney both had eight years’ experience practicing law, although the new attorney had not yet worked for the Legislature. They were assigned the same types of work for the Senate, the lawsuit said.

The lawsuit said Metcalfe complained about the pay disparity to with then-Sen. Terry Burton, a Republican. As the Senate president pro tempore, Burton was chairman of the Rules Committee, which sets staff salaries. He denied Metcalfe’s request to equalize her salary with that of her new colleague, the lawsuit said. She resigned about 11 months later.

This article first appeared on Mississippi Today and is republished here under a Creative Commons license.

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