A federal inspector general conducted a performance audit of the Blue Cross Blue Shield Association's (carrier) Service Benefit Plan's retail and mail-order pharmacy programs as administered by CVS Caremark to determine if costs charged to the Federal Employee Health Benefits Program (FEHBP) and its services were in accordance with regulations. The audit examined contract years 2018-2021. The audit found that the PBM overcharged the carrier and the FEHBP over $615 million through lost investment income, by not passing through all discounts, credits, and financial benefits related to prescription drug pricing as required.
Three findings from the report require corrective action: 1) A $478 million overcharge to the carrier and the FEHBP from not passing through negotiated discounts with two of the largest retail pharmacy chains, 2) Failing to return $108 million in credits for transmission fees collected from retail pharmacies to process the carrier's prescription drug benefits, and 3) An overcharge to the carrier of $27 million by paying the PBM an incentive above the retail claims pricing guarantee between the carrier and the PBM.
View the complete report here.
