BioScrip: When a Doctor’s Stop Order Hurt the Pharmacy’s Score

In the BioScrip Exjade settlement case, the specialty pharmacy agreed to pay $11,685,705 to the United States to resolve allegations that Novartis bought refill recommendations with patient referrals and rebates. BioScrip admitted that its refill score included patients who stopped because of side effects or a doctor’s instruction. For someone who worked with patient calls, referral allocations or rebate reports, that is the revealing connection: the reason a patient stopped treatment could count against the pharmacy’s next batch of business.

What Was the BioScrip Exjade Settlement Case?

The January 8, 2014 BioScrip settlement resolved federal healthcare fraud allegations that a refill-and-referral arrangement produced false Medicare and Medicaid claims. The covered allegations ran from February 2007 through May 2012. BioScrip made detailed factual admissions about its work inside Novartis’s Exjade distribution network.

Exjade is an iron chelation drug that Novartis marketed for patients with iron overload resulting from blood transfusions. The Justice Department’s announcement alleged that pharmacy employees encouraged refills through biased recommendations presented as clinical counseling or education.

A former Novartis account manager brought the qui tam whistleblower case under the False Claims Act, and the government joined it. The insider’s view came from the manufacturer side of the pharmacy referral business.

How EPASS Turned Refill Rates Into Referrals

Novartis controlled a valuable pool of Exjade prescriptions that it could direct among the pharmacies in its network. BioScrip admitted that it was one of three specialty pharmacies permitted to dispense Exjade through Exjade Patient Assistance and Support Services, known as EPASS, from November 2005 through May 2012. Novartis’s later admissions identify the other pharmacies as Accredo and US Bioservices.

Physicians submitted prescriptions on EPASS enrollment forms. Insurers or physicians designated a particular pharmacy for some prescriptions. Approximately half were undesignated, and Novartis directed their allocation among the participating pharmacies. That pool of undesignated patient referrals was the commercial prize.

BioScrip admitted why it wanted those patients: more sales revenue, more dispensing fees and more rebates. A referral meant an opportunity to dispense the initial order and subsequent refills.

The patient still had to agree. BioScrip admitted that it understood third-party payers required patient consent before it could ship an Exjade refill, even when a physician had already prescribed it. The call therefore sat between an available prescription and the next shipment. Whoever shaped that conversation could influence whether the pharmacy obtained another refill order.

What BioScrip’s Exjade Team Did

BioScrip built a dedicated Exjade Team after Novartis threatened to cut off referrals over low refill rates. In February 2007, Novartis demanded a Performance Improvement Plan and told BioScrip that continued poor performance could also cost it its place in EPASS.

According to BioScrip’s admissions, the team included a licensed practical nurse, two or three medical assistants and several customer-service representatives working exclusively on Exjade. BioScrip directed them to encourage refill orders and persuade many patients who had stopped ordering to restart.

The pharmacy called its protocol ScripCare, or BioScripCare. Assessment or survey calls were presented to patients as clinical counseling and education. Refill calls encouraged another order. Recovery calls sought to restart patients who had stopped.

The program worked commercially. By September 2007, BioScrip’s refill levels exceeded those of the other EPASS pharmacies, and Novartis continued sending it referrals.

The Manufacturer Helped Shape the Scripts

BioScrip admitted sharing the sequence of calls, the staff assignments and the discussion of side effects with Novartis. The manufacturer’s Exjade marketing team supplied input, including how potential side effects should be discussed. Novartis approved the call scripts at a January 2008 meeting.

The scripts told callers that treatment could cause initial discomfort that usually resolved over time. BioScrip continued using the approved scripts until about November 2010. The team’s activities came up in monthly calls and quarterly meetings with Novartis’s marketing and managed-markets staff.

In its later settlement admissions, Novartis acknowledged that a black box warning was added to Exjade’s label in January 2010 for risks including kidney and liver impairment and gastrointestinal hemorrhage. Novartis trained the pharmacies on the warning but did not ask them to revise their call scripts to require nurses to discuss those risks.

The government separately alleged that the calls emphasized refills while ignoring serious side effects, including kidney failure and gastrointestinal hemorrhage. Its announcement described a former BioScrip supervisor’s account: Novartis’s incentives made refill orders the exclusive focus, at the expense of patient care.

The Exjade Scorecard Counted Refills, Including Medically Directed Stops

BioScrip’s monthly Exjade Scorecards measured how long patients continued ordering refills. BioScrip admitted knowing that side effects and doctors’ orders were among the most common reasons patients stopped. It collected those reasons and reported them to Novartis each month.

Yet those reasons did not remove a stopped patient from the score:

We find that an extraordinary definition of adherence. A patient following a doctor’s instruction to stop could hurt the pharmacy’s performance score. The system had the reason for stopping. The score still counted the stop.

Higher Scores Bought More Business

The score affected both referrals and rebates. In January 2008, Novartis increased BioScrip’s rebate per Exjade shipment from $13 to $20. BioScrip admitted understanding that the increase recognized its performance and encouraged it to continue the Exjade Team’s efforts.

Under the patient-allocation plan, BioScrip received 60% of undesignated patients in the first half of 2009 because it had achieved the highest refill rate. Its allocation for the second half was 40%, based on its earlier performance.

From 2008 through 2010, additional performance rebates depended on meeting or exceeding quarterly shipment goals. Novartis’s documents told BioScrip that those thresholds reflected national marketing objectives. The pharmacy’s patient conversations fed a score, the score influenced referrals, and shipment targets determined another payment.

When the Referrals Stopped, the Calls Changed

In March 2011, Novartis put BioScrip under a corrective-action plan because of low refill rates and other issues. BioScrip stopped receiving undesignated patient referrals.

BioScrip admitted responding with another intensive effort, including changes to its Exjade Team protocol, to encourage refills and restart patients. Its refill rates rose significantly by late 2011. In January 2012, Novartis restored the majority allocation BioScrip had received in the first half of 2009.

That sequence gives the arrangement its practical meaning. Referral access could be withdrawn when performance fell and restored after the pharmacy changed how it pursued refills. Future patients were part of the incentive.

What the Government Alleged and What BioScrip Agreed to Pay

The government alleged that the arrangement generated tens of thousands of false Medicare and Medicaid claims and tens of millions of dollars in reimbursements. Its claim was that referrals and rebates induced BioScrip’s refill recommendations, and that the resulting claims carried the effect of those kickbacks into public health care spending.

BioScrip admitted the operational facts described above and agreed to cooperate with the government’s case against Novartis. The Justice Department said BioScrip’s settlement took its limited financial resources into account. We see the imbalance: the alleged claims were driven by sales targets, while the settlement was shaped by what the pharmacy could afford.

BioScrip’s $15 million settlement covered federal and state claims. The November 2015 Novartis stipulation subsequently recorded BioScrip’s state settlement at $3,314,295, alongside its separate federal obligation.

The FBI’s Major Provider Response Team, the Department of Health and Human Services Office of Inspector General and the Medicaid Fraud Control Units for New York, Washington and Ohio investigated.

Other Pharmacy Arrangements Put Sales Behind Recommendations

The separate Myfortic allegations in the Novartis stipulation concerned discounts and rebates offered to specialty pharmacies in return for recommending that physicians prescribe Myfortic instead of CellCept or generic CellCept. The requested action there was a drug switch. BioScrip’s Exjade case concerned getting patients to keep ordering the same drug.

A similar sales mechanism appeared in the whistleblower complaint concerning Amgen’s Aranesp and long-term-care pharmacy recommendations. The complaint alleged that PharMerica staffed a call center to solicit switches from Procrit to Aranesp and used regional scorecards to track success and determine employee bonuses. It also alleged that Omnicare’s manufacturer rebates increased with Aranesp purchases. The combination is recognizable: recommendations, sales measures and financial incentives.

In compounding pharmacy referral arrangements, the incentive can act earlier, at the source of the prescription. The government alleged that Patient Care America paid marketers and financed physician referrals. The comparison puts the business question in plain terms: who supplied the patients, what the pharmacy gave in exchange and which claims followed?

What an Insider Can Connect

The BioScrip admissions connect records that serve different purposes inside a pharmacy: call protocols, reasons for stopping treatment, monthly scorecards, referral allocations and rebate terms. A person who knows only one part may still explain a decision that the other records cannot explain on their own.

The patient conversation and the dispensing and billing history answer different questions. We connect the request for a refill to the shipment and government claim, then examine the commercial arrangement behind the recommendation. A scorecard shows what management measured. A referral allocation shows what that measurement was worth to the pharmacy.

Does a Settlement Headline Determine a Reward?

No. The settlement amount concerns the company’s payment obligation. A whistleblower reward is a share of the government’s recovery. A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

When You Know What the Refill Score Rewarded

If you saw how a call script, refill score or rebate target changed the way patients were approached, you know the decisions behind the numbers. We work beside you to build your strongest case and bring in pharmacy kickback whistleblower lawyers who understand specialty-drug referral arrangements. Speak with our whistleblower experts about what the refill score rewarded.