CVS Sued For Overcharges, BCBS Louisiana Loses Underpayment Lawsuit, Omada IPO

Hey all,

Happy Monday! I think we’re going to see more and more lawsuits showing outright fraud along the lines of what BCBS Louisiana was doing. Running a medical practice I was astounded how often insurance didn’t pay for no good reason. AI makes this type of fraud easier to spot and litigate. Enjoy the rundown!

Jacob Brody (Co-Founder & CEO, ZorroRX)

(Fierce Healthcare) CVS Health Medicaid Overcharge Lawsuit

Four state attorneys general from Connecticut, Indiana, Oklahoma, and Massachusetts have filed a lawsuit accusing CVS Health of submitting false and inflated claims to state Medicaid programs by not reporting lower "usual and customary" prices available through its discount programs since 2016. This case highlights growing scrutiny over how pharmacy chains interact with state healthcare programs, as states allege CVS's collaboration with discount card vendor ScriptSave led Medicaid to overpay for prescriptions compared to other health plans; CVS denies wrongdoing, citing victories in similar lawsuits and claiming no guidance mandated inclusion of discount prices as "usual and customary." We’re guessing CVS execs wanted to just laugh and say, “You really thought we’d give Medicaid the best price?” Full Article

(ProPublica) BCBS of Louisiana Fraud Lawsuit

ProPublica’s exposé details how Blue Cross and Blue Shield of Louisiana was ordered to pay $421 million for fraudulently underpaying a New Orleans breast surgery center for thousands of breast cancer procedures. The case underscores how insurers wield immense power by creating and enforcing their own payment guidelines—even after granting prior authorizations—ultimately jeopardizing both patients’ access to care and doctors’ financial stability. My favorite line? As the jury foreman put it, “We would have given more if we had been asked for more. That’s how egregious the fraud was.” Full Article.

(Fierce Healthcare) Omada Health Files for IPO as Digital Health Eyes Market Rebound

Omada Health, a virtual chronic care company, has filed for an IPO on the Nasdaq under the symbol “OMDA,” signaling renewed momentum in digital health public offerings after a quiet period. Backed by $500 million in funding and serving over 679,000 active members, Omada is leveraging growing demand for integrated chronic care solutions across employers, health plans, and emerging government channels, even as questions remain about clinical effectiveness and its lack of profitability. The company, which launched in 2011, likely would have benefited from going public during the more favorable market conditions of 2018 or 2019. Full Article.