Pharmacy Sues L.A. Care Health Plan Over Recoupment

On Tuesday a case was removed to the California Central District Court from the Superior Court of Los Angeles County. The case was filed by AHCS Mental Health and Wellness, doing business as Berry & Sweeney Pharmacy (B & C), against the L.A. Care Health Plan. The case is regarding the recoupment of payment of claims resulting in conversion and underpayment.

When a medical provider contracts with an insurance plan for payment of claims, one of the frequent clauses in the contract is for recoupment by the insurance plan of any payments made improperly. However, the medical provider may not agree with the insurance plans assessment of the payment as improper.

B & C is a pharmacy, the complaint said, and as a part of doing business dispenses prescriptions that are sent directly to it as well as those that had been transferred from other pharmacies. Prior to dispensing the prescriptions, the plaintiff indicated that it had either received authorization through a provider portal directly, or had verified the authorization that had been issued to the previous pharmacy.

However, L.A. Care allegedly wrote to the plaintiff, stating their intent to recoup payments for prescriptions for the drug Ingrezza, a treatment for tardive dyskinesia, claiming that there had been an integrity issue with the authorization. The renouncement would be paid as deductions from future payments made to the pharmacy. The plaintiff alleged that the defendant “never served or otherwise provided the January 8th Letter to the Plaintiff,” only receving a copy of the letter sent in January 2020 in August of that year. While the defendant has acknowledged the late receipt of the letter, they allegedly have not responded to the plaintiff’s billing appeals.

The plaintiff is suing for conversion, intentional misrepresentation regarding the transferred authorizations, negligent misrepresentation regarding the transferred authorizations, and unfair competition.

The plaintiff is represented by the Marcarian Law Firm. Defendants are represented by Mintz Levin Cohn Ferris Glovsky and Popeo