Add The New York Post on Google Mount Sinai is suing pharmacy giant CVS, accusing it of a $121 million racketeering scheme that siphoned federal prescription drug cash meant for the city’s poorest patients.
The sprawling hospital system claims CVS orchestrated a “secret pricing scheme” to pocket massive savings afforded by the federal 340B drug discount program, according to a lawsuit in Manhattan federal court.
The alleged fraud scheme deprived Mount Sinai of crucial funds meant for vulnerable, uninsured New Yorkers, claims the suit, filed Monday.
“[CVS’] fraudulent, unlawful and deceptive practices have harmed [Mount Sinai] by taking millions of dollars that were supposed to flow to [Mount Sinai] to fund the provision of charitable and free medical care to the uninsured and under-insured,” the filing states.
The federal 340B program was originally meant to help safety-net hospitals — or healthcare centers that provide care regardless of a patients’ ability to pay — purchase drugs at steep discounts.
CVS was supposed to only collect a “dispensing fee” for fulfilling 340B-eligible prescriptions for Mount Sinai — but the “substantial” payout wasn’t enough for the pharmacy giant, the suit alleges.
The healthcare behemoth allegedly used its massive vertically-integrated subsidiaries to implement a “secret pricing scheme” to manipulate the reimbursement rate back to the hospital, according to the suit.
The complicated structure allowed CVS to allegedly conceal that skimming — totaling more than $121 million in drug savings since 2020 that should have gone to Mount Sinai, the suit claims.
While the hospital system’s contract with CVS allows for audits, the company has “refused” to provide the data, Mount Sinai claims in its filing.
The hospital charges that CVS terminated their pharmacy agreement “in retaliation for uncovering the fraudulent scheme.”
CVS declined to comment on the ongoing litigation.
A recent report claims the elite hospital is already engorged from the federally funded “boondoggle,” pocketing over half a billion dollars last year alone through the 340B program — with revenue skyrocketing an astonishing 846% in just the last five years.
Even congress is reviewing the circa-1992 program, holding hearings over concerns that, instead of helping safety-net hospitals and clinics, it has become a profit center for big medical systems.
“Several health care systems across the country, including Mount Sinai, have brought this lawsuit to ensure that the funds that are supposed to be available to mission-driven hospitals like Mount Sinai that serve a disproportionate share of the Medicaid and uninsured population, are not wrongly skimmed off by for profit intermediaries,” said Lucia Lee, spokesperson for Mount Sinai.
