City expands audit of company

Provider of prescription drug benefits for employees is under scrutiny over billing concerns

December 22, 2005|By JOHN FRITZE | JOHN FRITZE,SUN REPORTER

Baltimore officials expanded their audit yesterday of a company that holds a $275 million contract to provide prescription drug benefits to city employees.

An initial audit of the company, St. Louis-based Express Scripts, found that the city might have been overbilled $300,000 to $700,000 last year, though the company disputes those findings.

City Councilman Robert W. Curran, who has led the examination of Express Scripts, said he wants more information about whether the company is passing along savings when it purchases drugs in bulk.

"Are they coming clean with us?" Curran asked, pointing to investigations into Express Scripts elsewhere and a lawsuit in New York.

New York Attorney General Eliot Spitzer sued Express Scripts in 2004 for inflating the cost of prescription drugs, a claim the company has denied.

Express Scripts is the exclusive provider of prescription drug benefits to Baltimore, which includes more than 64,000 active employees, retirees and their dependents - making it one of the city's largest recurring contracts.

An initial audit of the company this year found thousands of claims where patients paid co-pays that were too low, resulting in overpayments by the city. The audit called for a new management-level position to oversee the program.

At the same time that the Board of Estimates approved paying nearly $14,000 to broaden the scope of the audit yesterday, it approved extending the company's contract by $75.3 million for a fourth year of service.

With the extension, the four-year value of the contract exceeds $275 million.

Separately, the city Minority and Women's Business Opportunity Office, which works to ensure minority-owned firms receive city business, found that Express Scripts had tried to use a single subcontractor to meet both women-owned and minority-owned business goals.

City officials said the company has agreed to adjust its minority-business participation.

Stephen E. Littlejohn, a company spokesman, wrote in an e-mail that Express Scripts would cooperate with the more comprehensive audit. He also said the company expects to have explanations for any discrepancies.

"We have already resolved many issues, look forward to addressing any further issues and expect to demonstrate that the city has been billed appropriately," Littlejohn wrote.

john.fritze@baltsun.com

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