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Optum audit shows possible law violation, lower payments to independent pharmacies

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Optum audit shows possible law violation, lower payments to independent pharmacies


The findings of a recent audit of a major company that manages prescription benefits revealed it may have violated Mississippi law.

The review of Minnesota-based Optum’s business practices by the Mississippi Board of Pharmacy indicated that the company paid independent pharmacies in Mississippi rates lower than chains and Optum-affiliated pharmacies for the same prescription drugs. 

The audit uncovered over 75,000 instances in which Optum-affiliated pharmacies’ lowest payments for a prescription drug were higher than at unaffiliated pharmacies in one year, including chain and independent drug stores. 

Mississippi state law prohibits pharmacy benefit managers from reimbursing their affiliate pharmacies, or ones they own, at higher rates than non-affiliate pharmacies for the same services. 

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In some cases, patients footed the bill: consumers were almost twice as likely to pay the full cost of a prescription drug claim without contributions from their insurance plan at independent pharmacies than at affiliated pharmacies. 

The Board of Pharmacy will hold an administrative hearing based on the alleged violations of Mississippi law on Dec. 19. Board staff declined to answer questions about the audit or its findings. 

“I think this proves that we need to have more transparency, we need to have more PBM reform in Mississippi and across the country and even on a federal level,” said Robert Dozier, the executive director of the Mississippi Independent Pharmacy Association, an organization that advocates for 180 pharmacy members.

Optum declined to answer specific questions about the audit. The company has identified errors in the audit’s findings and methodology and submitted them to the Board of Pharmacy, said Isaac Sorenson, a spokesperson for Optum. 

“The pharmacy – and local pharmacists – play a vital role in supporting people’s health and we are committed to paying them fairly,” he said. “…For pharmacies in rural and underserved communities, Optum Rx is deepening its commitment to support their role by launching new programs, expanding existing initiatives and launching a new pharmacy network option for customers.” 

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He said the new pharmacy network option will provide pharmacies with increased reimbursements. Generic drugs will be reimbursed at 5% higher rates and brand name drugs at .2% higher rates. 

Optum is owned by health care behemoth UnitedHealth Group Inc., the U.S.’ most profitable health care company and the owner of the nation’s largest health insurance company, UnitedHealthcare. In 2023, the company reaped $32.4 billion in earnings. 

Pharmacy benefit managers are private companies that act as middlemen between pharmacies, drug manufacturers and insurers. They process prescription drug claims, negotiate pricing and conditions for access to drugs and manage retail pharmacy networks. 

Optum is one of the largest three pharmacy benefit managers in the U.S., which together account for 79% of prescription drug claims nationwide. 

The results of the audit echoed some of the conclusions of a Federal Trade Commission report published in July: large pharmacy benefit managers pay their own, affiliated pharmacies significantly more than other pharmacies and set reimbursement rates at untenably low levels for independent drug stores, or retail pharmacies not owned by a publicly traded company or owned by a large chain, said the report. 

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Mississippi Today reported last month that many Mississippi independent pharmacists fear they may be forced to close their businesses due to low reimbursement rates from pharmacy benefit managers. 

Pharmacy benefit managers have an incentive to steer customers towards their affiliate pharmacies and compensate them at higher rates, which can disadvantage unaffiliated pharmacies and lead to higher drug costs, said the Federal Trade Commission. 

Optum’s affiliate pharmacies include Optum Home Delivery Pharmacy and Optum Specialty Pharmacy. 

The audit revealed that Optum uses 49 different maximum cost lists, or schedules created by pharmacy benefit managers that determine the highest price they will pay pharmacies for generic drugs. Maximum cost lists are proprietary and confidential, even to the pharmacies that are reimbursed based on the lists, and change continuously.

“I think that’s 48 too many,” said Dozier. “There should only be one MAC list.”

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Fifteen are used exclusively at independent pharmacies and 22 are used solely at chain pharmacies. 

An analysis of the maximum allowable cost lists showed that independent pharmacies were reimbursed at rates 74% lower than chain pharmacies on average.

An analysis of a generic drug used to treat bacterial infections yielded a payment to an Optum-affiliated pharmacy that was eight times higher than the lowest-paid independent pharmacy on the same day. Chain and affiliate pharmacies were paid over 20 times as much as independent pharmacies for a generic drug used to treat stomach and esophagus problems.

Pharmacies’ attempts to contest low reimbursement rates were often unsuccessful, showed the audit. 

Ninety-eight percent of pharmacy appeals were denied, most commonly because they did not include information about how much the pharmacy paid to acquire the medication from a wholesaler. 

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Mississippi law prohibits pharmacy benefit managers from reimbursing pharmacies at rates below their cost to acquire the drug, even when using a maximum allowable cost list. But the audit revealed over 400 times that Optum denied pharmacies’ appeals on those grounds, saying that the maximum cost list was accurate. 

The audit, which studied Optum in 2022, was the first commissioned by the Mississippi Board of Pharmacy after revisions to state law in 2020 gave it more regulatory authority over pharmacy benefit managers. 

It took the board several years to hire staff to enact the law and receive approval to increase its budget due to the high costs of audits, the board’s executive director Susan McCoy told lawmakers at the House Select Committee on Prescription Drugs Aug. 21 at the Capitol.

The board also has pending administrative proceedings with the other largest pharmacy benefit managers in the country, Express Scripts and CVS Caremark. Neither is the result of an audit. Both hearings are scheduled for Nov. 21. 

Optum has already faced scrutiny for its business practices in Mississippi. In August, Attorney General Lynn Fitch filed a lawsuit alleging that Optum and several other pharmacy benefit managers stoked the opioid epidemic by plotting with manufacturers to increase sales of the addictive drugs and boost their profits. The suit also named Evernorth Health and Express Scripts, along with the companies’ subsidiaries. 

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Mississippi

Along the Mississippi River, an acorn-collecting ‘legend’ works to save struggling forests

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Along the Mississippi River, an acorn-collecting ‘legend’ works to save struggling forests


Jerry Boardman doesn’t remember exactly when he started collecting acorns in the fall.

But the thousands upon thousands of them he gathers to share with people working to improve habitat along the Mississippi River makes the 81-year-old resident of De Soto, a village of about 300 between La Crosse and Prairie du Chien, a pretty big deal.

“It’s like a myth or a legend,” Andy Meier, a forester for the U.S. Army Corps of Engineers who receives a portion of Boardman’s bounty, said of the integral role it plays in his work. “It just has always been that way.”

In reality, Boardman began collecting around the time that the need for acorns — a nut that contains the seed that grows oak trees — was becoming critical. For the past few decades, the trees that grow in the Mississippi River floodplain, known as floodplain forests, have been struggling. Although they’re named for their ability to withstand the river’s seasonal flooding, they’ve recently been overwhelmed by higher water and longer-lasting floods.

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Overall, forest cover along the stretch of the river from Minnesota down to Clinton, Iowa, decreased by roughly 6% between 1989 and 2010, according to a 2022 report on ecological trends on the upper Mississippi. In the years since, losses in some places have neared 20% — and were particularly acute following a massive flood event in 2019.

What exactly is driving the excess water isn’t fully fleshed out, but climate change and changes in land use that cause water to run off the landscape faster are likely factors.

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The result is mass stretches of dead trees that can no longer perform their functions of providing wildlife habitat, sucking up pollutants that would otherwise run downriver, and slowing water during floods. Reno Bottoms, a sprawling wetland habitat on the river near Boardman’s hometown of De Soto, is one such example of the dispiriting phenomenon.

Boardman, who has been a commercial fisherman, hunter and trapper on the river for most of his life, called the change in forest cover in recent years “shocking.” To combat it, he puts in about 100 hours a year between August and October gathering acorns from the floodplain in De Soto, Prairie du Chien and La Crosse. The idea is that if the trees that produced the acorns were successful enough at warding off flood damage to drop seeds, those seeds might be similarly resilient if replanted.

He looks for acorns from the bur oak, pin oak and swamp white oak, the latter of which is particularly well-suited to the floodplain forest. And the numbers he puts up are impressive — last year, he collected about 130,000; this year, 65,000.

He splits up the total to give to the Army Corps and the U.S. Fish and Wildlife Service, both of which have foresters planting trees to restore floodplain habitat.

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“Pretty much everything that Jerry collects, in one way or another, will return to the river,” said Meier, with the Corps.

Last fall, for example, they scattered between 20,000 and 30,000 of Boardman’s swamp white oak acorns near McGregor Lake, a river backwater near Prairie du Chien where the Corps is piloting an effort to protect trees from flood inundation by raising the forest floor a few inches.

This spring, Meier said, he was “blown away” by the approximately 1,000 seedlings that had taken root there and begun to sprout.

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Having access to Boardman’s acorns is important because it gives foresters the chance to experiment with direct seeding, instead of buying young trees and planting them. Direct seeding is both cheaper and more likely to result in a viable tree, because the seed is local.

“When we have an opportunity to get something we know came from the river, we know that it’s adapted to growing there,” Meier said.

To maximize his time, Boardman uses a contraption not unlike ones used to pick up tennis balls to scoop up the acorns. One small variety, though, requires collectors to “get down on your hiney or your knees” to pick them up, he said. For those, he relies on a little grunt work.

Ev Wick, a fifth grade teacher at De Soto’s Prairie View Elementary, has taken his students out for an acorn-gathering day with Boardman for the past several years. Boardman scouts the best trees ahead of time, Wick said, then the kids get to work. They can pick up between 5,000 and 6,000 in a day, propelled by friendly competitions to see who can collect the most or fill their bucket quickest.

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They’re interested when Boardman tells them all the acorns they collect will eventually be planted on the islands they see in the river, Wick said. But most of all, they do it to thank Boardman for taking them out fishing and ice fishing in the winter and spring.

Acorn-gathering is just one of Boardman’s talents. Along with other members of Friends of Pool 9, a group of area residents who work to protect natural resources, he hosts fishing days, runs river cleanups and counts bald eagle nests to report to the Fish and Wildlife Service.

Whether it’s acorn-related or otherwise, Meier said it’s amazing to see the commitment Boardman has to ensuring the river continues to thrive.

To Boardman, the chance to donate acorns or otherwise help out is a no brainer.

“That river has given me so much,” he said. “I’ve just got to give back all I can give.”

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Madeline Heim is a Report for America corps reporter who writes about environmental issues in the Mississippi River watershed and across Wisconsin. Contact her at 920-996-7266 or mheim@gannett.com.



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Women’s Basketball: Mississippi State shows no mercy on Mercer in blowout win

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Women’s Basketball: Mississippi State shows no mercy on Mercer in blowout win


STARKVILLE — Former Mississippi State assistant coach Michelle Clark-Heard returned to Humphrey Coliseum on Wednesday night as the head coach at Mercer, and her ex-boss, Sam Purcell, made sure it was a rude welcome home.

The Bulldogs limited their fourth straight opponent to under 50 points and have held all five teams they’ve played to under 30 percent shooting, defeating the Bears 81-44.

“We’re watching film, we’re trying to find every advantage we can,” Purcell said. “That stuff matters to us. That’s culture, that’s DNA. We train hard, we work hard, and we’re a multiple defensive team. I always say there’s bad coaches out there if you only play one style, and that’s not who we’re going to be. We can press, we can trap, so it makes it a nightmare for our opponents.”

Mercer did not make a 3-pointer until there were less than two minutes left in the fourth quarter, finishing 1-for-17 from behind the arc. MSU (5-0) made more than half of its field goals and was 10-for-22 from deep, outscoring the Bears 44-14 in the paint.

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Fifth-year senior guard Jerkaila Jordan entered the game having made just one 3-pointer on 15 attempts so far this season, but she made her first shot of the night from distance behind a screen in the final minute of the opening quarter. Jordan then blocked Hanna Knoll’s 3-point attempt on the other end, and Eniya Russell connected from long range to beat the buzzer and put the Bulldogs ahead by double digits.

Jordan recorded a double-double with 15 points and 11 rebounds, and she was 3-for-4 from 3-point range, nailing a triple from each corner 33 seconds apart in the third quarter.

“She just needs to relax. That’s it,” Purcell said. “The kid’s a pro. She trains hard, she’s in the gym every single day. She knows what’s up. I haven’t said one thing to her. I knew it was going to finally end, I’m just glad it happened before we head on the road.”

Madina Okot had another big night in the post, tallying 15 points, eight boards, two blocks and two steals. The Kenyan is shooting 65 percent through five games in the maroon and white and is pulling down nearly 10 boards per contest.

“This has been my dream, and I just feel happy,” Okot said. “I’m just grateful for the team and for this coaching staff. They’re really doing great, I’m putting in work and they’re ready to support me to get everything I desire to get here.”

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MSU already led by 20 at the half before winning the third quarter 32-7, finishing the period on an 18-2 run. The Bulldogs’ last four opponents have scored a total of 24 points in the third quarter.

Junior sharpshooter Debreasha Powe was also in double figures with 13 points, going 5-for-7 from the floor and 3-for-5 from behind the 3-point line. Destiny McPhaul had an efficient night as well, and Quanirah Montague had eight points in just 13 minutes of action. MSU shared the ball extremely well, with 26 assists on 33 made field goals.

“I was just locked in,” Montague said. “I was ready to get in the game, ready to have energy and bring energy to my team.”

The Bulldogs will not play in Starkville again until Dec. 29, following eight straight games away from The Hump. They are back in action Sunday against Jacksonville in Orlando, Florida, a neutral-site game that is part of the inaugural WBCA Showcase.

Wednesday’s win was No. 50 for Purcell in 73 games at MSU, making him the fastest coach in program history to reach that milestone.

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“It’s all about the young women who step on the floor and sacrifice night in and night out,” Purcell said. “I’ve never scored a point here at Mississippi State. I’m fortunate to have a university that gave a first-time head coach an opportunity. You need one school to believe in you, so it means the world that Mississippi State believed in me.”

Mississippi State women’s basketball

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Court says it's ending dispute over control of airport in Mississippi's capital city

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Court says it's ending dispute over control of airport in Mississippi's capital city


FILE – Sen. Josh Harkins, R-Flowood, right, reacts as Sen. John Horhn, D-Jackson, left, purposes amendments that would affect Harkins’ proposed legislation that would shift control of the Jackson-Medgar Wiley Evers International Airport to state officials and surrounding counties, March 3, 2016, in Senate chambers at the Capitol in Jackson, Miss. (AP Photo/Rogelio V. Solis, File)



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