FOR IMMEDIATE RELEASE
November 9, 2023
LDI Fines Express Scripts and MedImpact for Delayed Pharmacy Payments
The Louisiana Department of Insurance (LDI) recently fined Express Scripts Administrators, LLC (ESA) $275,000 and MedImpact Healthcare Systems, Inc $250,000 for failing to pay electronically adjudicated insurance claims to pharmacies in a timely manner on behalf of the Office of Group Benefits (OGB).
ESA and MedImpact were third-party administrators operating as pharmacy benefit managers (PBMs) for OGB, which provides health and life insurance benefits to qualified state employees, retirees of participating agencies, and eligible dependents.
The LDI Office of Consumer Services conducted investigations into the PBMs after receiving thousands of remittance advices from the Louisiana Independent Pharmacy Association (LIPA) to substantiate complaints from 19 independent pharmacies alleging multiple violations of the Louisiana Insurance Code.
The LDI’s investigations determined that both PBMs failed to ensure electronically adjudicated claims were paid within 15 days as required by law.
ESA admitted to failing to pay 1.3 million electronically adjudicated OGB claims within 15 days due to a software issue. ESA has paid $1.5 million in interest to the affected pharmacies, agreed to a $275,000 fine, and agreed to make necessary changes to processes and procedures as determined in the order.
During the investigation, MedImpact indicated that 664,770 claims were paid beyond the 15 days required by law during the state of emergencies declared in Louisiana and California due to the Covid-19 pandemic. The LDI determined that, despite the pandemic-related restrictions, MedImpact should have made all payments to pharmacists as required by law during the state of emergency period from January 1, 2020, through December 31, 2021. MedImpact agreed to pay approximately $602,000 in interest to the affected pharmacies and to pay a $250,000 fine.
“The software issue cited by ESA and state of emergency declaration cited by MedImpact did not excuse those companies from complying with Louisiana law,” said Insurance Commissioner Jim Donelon. “I am appreciative that both Express Scripts and MedImpact fully cooperated with the LDI in resolving these matters.”
The regulatory consent orders constitute administrative actions and are reported to the National Insurance Producer Registry. A copy of the orders is available here. Prior to the consent orders, the LDI issued cease-and-desist orders to ESA and OGB regarding these allegations.
About the Louisiana Department of Insurance: The Louisiana Department of Insurance works to improve competition in the state’s insurance market while assisting individuals and businesses with the information and resources they need to be informed consumers of insurance. As a regulator, the LDI enforces the laws that provide a fair and stable marketplace and makes certain that insurers comply with the laws in place to protect policyholders. You can contact the LDI by calling 1-800-259-5300 or visiting www.ldi.la.gov.