ICYMI: Government auditor finds ESI overcharged by $44.9 million

NCPA April 29, 2024

The Inspector General of the US Office of Personnel Management (OPM) published its final audit report of Express Script’s (ESI’s) management of the pharmacy benefit of the American Postal Workers Union (the Carrier) Health Plan for contract years 2016 through 2021. The audit found that ESI overcharged the Carrier and the Federal Employee Health Benefits Program (FEHBP) nearly $44.9 million by not passing through all prescription drug discounts and credits required under the Carrier’s contract with OPM. The key findings of the audit that require ESI’s corrective action included:

  • The Carrier overstated pharmacy costs in its annual accounting statements for 2018 through 2021

  • The FEHBP did not receive pass-through pricing from ESI for retail pharmacy claims, resulting in an overcharge of approximately $14.4 million

  • The FEHBP did not receive several of the drug purchasing discounts collected by ESI for drugs filled by its own mail order warehouses and specialty pharmacies, resulting in an approximate $6.8 million overcharge

  • ESI failed to return approximately $2.5 million in retail pharmacy claim transaction fees that it was credited for the Carrier’s retail prescription drug benefits

  • The FEHBP did not receive a portion of the drug manufacturer rebates collected by ESI, resulting in an approximate $5.3 million overcharge

  • ESI’s sister company, Ascent Health Services, erroneously withheld a portion of the FEHBP’s drug manufacturer rebates in 2019 and 2020, resulting in approximately $15.8 million due to the Carrier and FEHBP