Specialty pharmacy sues Blue Cross Blue Shield of Wyoming

A specialty pharmacy that creates personalized medicines for patients with serious conditions is suing Blue Cross Blue Shield of Wyoming for allegedly failing to pay for its services.

AIS Healthcare, a Mississippi-based pharmacy, filed a lawsuit in U.S. District Court late last month alleging that Blue Cross Blue Shield of Wyoming breached its contract with the company and refused to pay hundreds of thousands of dollars for the care it provided to patients.

The specialty pharmacy sued after what its lawyers say has been months of inaction by Blue Cross Blue Shield and after receiving a letter from the health insurance company requesting payment for more than $250,000 it said the pharmacy billed incorrectly.

AIS Healthcare is asking for back pay and a statement from the court that the company broke its contract and "unjustly enriched" itself.

"At the end of the day, this is all about patient care," said Paul Werner, a practice group leader with the international law firm Sheppard Mullin, which represents AIS Healthcare. "What the payers are doing and have done for years now is really put AIS in the position of providing care to these patients for free, which it does because it cares about these patients, but it's obviously uneconomical for them to do it."

Unique health care

AIS Healthcare specializes in the manufacturing of personalized medicines for patients reliant on home infusion therapy.

The treatment is reserved for those with debilitating pain and severe conditions, such as multiple sclerosis, cerebral palsy, spinal cord injuries and cancer.

Doctors surgically implant pumps in patients that then carry medication to their spinal cord.

AIS Healthcare works with doctors to create unique infusion medications for each patient that can continuously treat them for up to 180 days before they have to be refilled. The pharmacy also offers other services such as in-patient nurse care and on-call pharmacists for patients and doctors, according to the lawsuit.

Home infusion therapy is a costly treatment, but also one that allows patients who otherwise would be in hospitals and long-term care facilities to live their lives – without dependence on potentially addictive opioids, Werner said.

Because of the company's specialty, its patients number in the thousands rather than the hundreds of thousands across the U.S., he said.

Contested compensation

In 2019, Blue Cross Blue Shield of Wyoming contracted with AIS Healthcare so its members could access the pharmacy's infusion therapies.

From May 2019 to April 2022, the health insurance company paid AIS Healthcare roughly $370,000 for its services, court filings show.

But in April of last year, Blue Cross Blue Shield told AIS Healthcare that it was billing the health insurance provider incorrectly and in turn overcharging it.

Home infusion providers can charge insurance companies a daily rate "each day a patient has access to the infused medication," according to the lawsuit. It's a figure that is supposed to take into account all of the costs that go into producing the specialized medicines and the patients' continuous use of them.

AIS Healthcare's contract with Blue Cross Blue Shield established that the pharmacy would be reimbursed that daily rate, both a procedure and price that were largely dictated by the health insurance network, Werner said.

"That's not something that we came up with and put to Blue Cross. It's something that Blue Cross told us to do," he said.

In a series of emails, Blue Cross Blue Shield told the pharmacy that it wasn't meeting all of the requirements to charge that daily rate.

Blue Cross Blue Shield said that it was already paying AIS Healthcare for the drugs, but because the pharmacy was making the medicines and sending them to physicians but not giving them to patients in their homes, the pharmacy could not charge a daily rate, according to the emails.

Raymond Redd, general counsel for Blue Cross Blue Shield of Wyoming, sent AIS Healthcare an April 26 letter stating that the pharmacy needed to repay $251,630, or more than two-thirds of all the money it paid the pharmacy for its services.

In a statement, Redd and Blue Cross Blue Shield of Wyoming denied the lawsuit's claims.

"Blue Cross Blue Shield of Wyoming is aware of the litigation and disputes the allegations made against it. However, as a policy we do not comment on active litigation," Redd said.

Court requests

Since April 2022, AIS Healthcare has continued to treat patients in Wyoming even while Blue Cross Blue Shield has refused to pay, Werner said.

AIS Healthcare is asking the court to force Blue Cross Blue Shield of Wyoming to pay more than $640,000 it says it is owed for serving the insurance network's patients.

"It's not like there's some miniscule dispute over some minor fees. They're not paying us," Werner said. "We're providing care. Their patients are getting benefits. They're getting benefits."

It is also requesting a declaration from the company acknowledging that AIS Healthcare billed Blue Cross Blue Shield correctly, that the insurance company refused to pay and broke its contract, and that it "unjustly enriched" itself by not reimbursing AIS Healthcare.

Werner said the pharmacy wanted the acknowledgement to legally reinforce its contract with Blue Cross Blue Shield for future work.

As part of the court filings, Werner and the legal team for AIS Healthcare pointed to a similar case the pharmacy brought against Blue Cross Blue Shield of Mississippi.

The companies settled for an undisclosed sum, but as a part of that process both Blue Cross Blue Shield of Mississippi and the Blue Cross Blue Shield Association, which oversees all 34 arms of the health insurance giant, issued a statement that AIS Healthcare's billing for services "did not constitute fraud" and was neither waste nor abuse.

AIS Healthcare itself has faced questions.

Investigators from the U.S. Food and Drug Administration accused the company of substandard practices and producing drugs that violated federal law in 2017. (The company responded by saying none of the observations rose to the level of "regulatory significance.")

Local news in Mississippi also reported last month that the FBI raided the company.

In a statement to WAPT, an ABC-affiliated news station in Jackson, a spokesperson for the company said, "We are confident that our industry standard billing practices are lawful and appropriate, and we intend to demonstrate that through ongoing cooperation with the government."

Werner said the actions of Blue Cross Blue Shield of Wyoming came at the cost of not only AIS Healthcare, but also vulnerable patients in the state.

"Do we continue to care for these patients, or do we cut them off from critical care that they need?" he said. "We have always as a company opted to care for patients, but we now are in the position of having to call Blue Cross to task to step up and meet their contractual obligations and pay for the care that we are providing to their members."