Billing irregularities prompted UnitedHealth to cut off Philidor Rx last year

The shakeup continues for Philidor Rx Services LLC, which has dominated headlines over the last several weeks for its questionable relationship with pharmaceutical giant Valeant.

Now, Reuters has reported that OptumRx, UnitedHealth's pharmacy benefit manager, sent cease-and-desist letters to Philidor last September, after discovering billing irregularities. Unnamed former employees of Philidor told sources that the pharmacy continued submitting bills to OptumRx using the National Provider Identification (NPI) numbers of at least three other affiliated pharmacies.

Days before the Reuters article, the Wall Street Journal reported that Philidor staff members were instructed to bill using alternate identification numbers, described as a "back door approach" by a Philidor training manual. According to the manual, the pharmacy would also alter the price or quantity of drugs in an effort to get insurers to accept the claim.

Although cease-and-desist letters did not specific what billing irregularities were found, former employees told Reuters that they were instructed to use the NPI numbers for West Wilshire Pharmacy in Lost Angeles, R&O Pharmacy LLC in Camarillo, California, and SafeRx in South Plainfield, New Jersey. The pharmacist that sold R&O Pharmacy to Philidor has filed a lawsuit against the company alleging "widespread fraud," including claims that Philidor used his NPI number to fill prescriptions even before the sale had been finalized.

Valeant has been accused of using Philidor to inflate drug sales, and last week the company announced it was severing all ties with the specialty pharmacy. The relationship cast a new light on specialty pharmacies, particularly as Novartis agreed "in principle" to pay $390 million to settle claims it paid kickbacks to specialty pharmacies.

To learn more:
- read the Reuters article
- here's the Wall Street Journal article