In re Unitedhealth Grp. PBM Litig. 16-Cv-3352, 16-Cv-3496, 16-Cv-3914, 16-Cv-3996, 16-Cv-4119, 16-Cv-4129, 16-Cv-4130, & 16-Cv-4136
| Decision Date | 19 December 2017 |
| Docket Number | Case No. 16-CV-3352 (JNE/BRT) |
| Parties | In re: UnitedHealth Group PBM Litigation THIS ORDER RELATES TO: Nos. 16-CV-3352, 16-CV-3496, 16-CV-3914, 16-CV-3996, 16-CV-4119, 16-CV-4129, 16-CV-4130, and 16-CV-4136 |
| Court | U.S. District Court — District of Minnesota |
Plan members bring suit against UnitedHealth Group, Inc. and some of its wholly-owned subsidiaries1 under the Employee Retirement Income Security Act of 1974 ("ERISA"), the Racketeer Influenced and Corrupt Organizations Act ("RICO"), and various state laws relating to breach of contract, fraud, and deceptive trade practices for Defendants' conduct in administrating pharmacy benefits that allegedly caused Plaintiffs to overpay for prescription drugs purchased at retail network pharmacies. (See Consolidated Class Action Compl. ("CAC"), Dkt. No. 52.) Defendants filed a motion to dismiss the CAC. (See Dkt. No. 67.) For the following reasons, the Court grants Defendants' motion to dismiss.
Defendants move to dismiss Plaintiffs' claims under Fed. R. Civ. P. 12(b)(6) and 9(b). (See Dkt. No. 67.) When ruling on a motion to dismiss under the rules, the Court accepts the alleged facts as true, drawing all reasonable inferences in favor of the non-moving party. See Drobnak v. Andersen Corp., 561 F.3d 778, 781 (8th Cir. 2009). "This tenet does not apply, however, to legal conclusions or 'formulaic recitation of the elements of a cause of action'; suchallegations may properly be set aside." Braden v. Wal-Mart Stores, Inc., 588 F.3d 585, 594 (8th Cir. 2009); see United States ex rel. Raynor v. Nat'l Rural Utils. Coop. Fin., Corp., 690 F.3d 951, 955-56 (8th Cir. 2012).
Under Rule 12(b)(6), the Court evaluates whether the alleged facts are sufficient to "state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). The Court draws on "its judicial experience and common sense" to determine if the factual statements nudge a claim "across the line from conceivable to plausible." Iqbal, 556 U.S. at 679-80. When reviewing a complaint for compliance with Rule 9(b), the Court determines whether the plaintiff "state[s] with particularity the circumstances constituting fraud or mistake." Fed. R. Civ. P. 9(b).
Plaintiffs received prescription drug benefits through health plans purchased directly from Defendants or issued or administered by Defendants for Plaintiffs' employers. (CAC ¶ 2.) The non-Optum Defendants are health insurance and/or plan administrators (the "United insurers"), and Defendant OptumRx (a subsidiary of Optum) is a pharmacy benefit manager ("PBM"). (Id. ¶ 5.) The United insurers retained OptumRx as a PBM to provide prescription drug benefits to plan members. (See id.) OptumRx participated in curating drug formularies, setting copayment, coinsurance, and deductible requirements (member "contributions"), and providing plan members with access to a network of pharmacies that have contracted with OptumRx to adhere to certain terms, including accepting discounted rates for providing prescription drugs. (See id. ¶¶ 5, 64(c).)
Before filling a prescription, pharmacies within OptumRx's network of pharmacies transmit key information about a plan member and the prescription via interstate wires toOptumRx, which "instantaneously processes the claim according to the prescription drug plan assigned to the patient." (Id. ¶ 58.) OptumRx then transmits a message back "indicating whether the drug and patient are covered and, if so, the amount the pharmacy must collect from the patient as a copayment or coinsurance, or to be paid toward a deductible." (Id.) Sometimes, a copayment amount is greater than the amount OptumRx otherwise agreed to pay the pharmacy, leading to a positive "spread." (Id. ¶¶ 60, 185.) The spread is the difference between the amount the pharmacy agreed to be paid and the amount it received from the plan member. (See id. ¶ 7.) The agreements between the network pharmacies and OptumRx require the pharmacies to remit the spread to OptumRx—what Plaintiffs term the "clawback." The pharmacies are not entitled to keep the spread. (See id. ¶¶ 7-8.) In addition, the agreements between OptumRx and pharmacies require pharmacies to forebear from informing plan members if there is a spread and that it is remitted to OptumRx.
Plaintiffs' plan documents outline what plan members must pay to receive prescription drugs under their plans. Under each of Plaintiffs' plans, the plan documents provide that plan members must pay copayments or coinsurance when filling prescriptions at retail pharmacies. (See id. ¶¶ 4.) Plaintiffs allege, however, that they were entitled to pay less than they were charged as copayments or coinsurance under the terms of their plans because their plans entitled Plaintiffs to receive the benefit of the discounted rate, in the form of lower copayments or coinsurance amounts. (See id. ¶ 181.) Plaintiffs allege that they purchased certain drugs on numerous occasions and were overcharged due to OptumRx's contribution calculations, resulting in spreads and clawbacks. They bring claims for damages and equitable relief on behalf of two classes and five subclasses. (See id. ¶¶ 209-211.)
Plaintiffs' first count, which is brought under ERISA § 502(a)(1)(B) by the ERISA Plaintiffs on behalf of themselves and the ERISA Subclass, is to recover benefits due to the ERISA Plaintiffs under the terms of their plans, to enforce their rights under the terms of their plans, and to clarify their rights to future benefits under the terms of their plans. (See CAC ¶ 233.)
Claims brought pursuant to this section stand or fall by the terms of the plan.2 Kennedy v. Plan Adm'r for DuPont Sav. & Inv. Plan, 555 U.S. 285, 300 (2009). Bond v. Cerner Corp., 309 F.3d 1064, 1067-68 (8th Cir. 2002) (citation omitted); see Spizman v. BCBSM, Inc., 855 F.3d 924, 927 (8th Cir. 2017); Kitterman v. Coventry Health Care of Iowa, Inc., 632 F.3d 445, 448 (8th Cir. 2011). "Further, the terms must be construed so as to render none of them nugatory and to avoid illusory promises." Barker v. Ceridian Corp., 122 F.3d 628, 638 (8th Cir. 1997) (citation omitted). Bond, 309 F.3d at 1068 (citation omitted).
Defendants argue that Count I should be dismissed with respect to most of the ERISA Plaintiffs because the relevant plans do not entitle the ERISA Plaintiffs to the discounted rate.(See Defendants' Memorandum in Support of Their Motion to Dismiss ("Def. Br.") 13-16, Dkt. No. 69.) They do not dispute that Ellington and Sohmer's (2016 only) plans entitle plan members to the discounted rate. (See Defendants' Reply Memorandum ("Def. Reply Br.") 3 n.3, Dkt. No. 106.) Plaintiffs respond that all Plaintiffs' plans prohibit the collection of spread and clawbacks. (See Plaintiffs' Response Memorandum in Opposition to the Motion to Dismiss ("Pl. Br.") 5-9, 12-13, Dkt. No. 97.)
Starting with the alphabetically-first ERISA Plaintiff, Ackerman, the Court finds that his plan does not entitle him to any discounted rates. The "Outpatient Prescription Drug Rider" to Ackerman's plan states that he is responsible for paying the lower of: (1) "the applicable Out-of-Pocket Expense," or (2) "the Network Pharmacy's Usual and Customary Charge." (Dkt. No. 80 at 157.) The Rider explains that "Out-of-Pocket Expenses" are those outlined in the "Summary of Benefits" and are "either a specific dollar amount or a percentage of the Prescription Drug Cost." (Id.) The Summary of Benefits for Ackerman's plan lists different flat copayment amounts for different tiers of drugs. (See id. at 16.) The Rider defines "Usual and Customary Charge" as "the usual fee that a pharmacy charges individuals for a Prescription Drug Product without reference to reimbursement to the pharmacy by third parties." (Id. at 162.)
Plaintiffs argue that a "UCR Rider" defines the "Usual, Customary and Reasonable (UCR) Charge" as the lesser of several things, including "the amount the provider agrees to accept as reimbursement for the particular covered services, supplies and/or drugs." (Id. at 65; see Pl. Br. 8.) However, as Defendants point out, that term is not equivalent to "Usual and Customary Charge," which is used in the Outpatient Prescription Drug Rider. (See Def. Reply Br. 3.) Under the plain and unambiguous terms of Ackerman's plan, he was not entitled to pay the discounted rate if it was less than the copayment amount.
ERISA Plaintiff Mohr's plans for 2011 through 2013 contain similar language to Plaintiff Ackerman's plan. (See Dkt. No. 80 at 1043, 1077, 1089, 1123, 1136, 1170.) However, Plaintiffs argue that Mohr's plan documents indicate that Mohr was entitled to the discounted rate during those years. (See Pl. Br. 8-9.) For example, Plaintiffs point to a sentence under the heading of "How Covered Services are Reimbursed" in Mohr's "Member Handbook," which states: "We reimburse the Network Provider directly when you receive Covered Services and you will not be responsible for any amount billed in excess of the contracted fee for the Covered Service." (Dkt. No. 98-7 at 55; see Pl. Br. 9.) Because the Summary of Benefits for Mohr's 2011-13 plans lists her supplemental prescription drug coverage under the heading of "Covered Service," Plaintiffs argue that this language from the handbook applies. (See Pl. Br. 9.)
Except as stated in the Member Handbook, the terms of Mohr's 2011 to 2013 plans do not appear...
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