Complaint Alleges Avera Health Plans Induced PBM Consulting Co. to Provide Free Services

On Monday in the Eastern District of Missouri, a pharmacy benefits management (PBM) company filed a complaint against a health care provider client, alleging that the defendant engaged in fraudulent conduct to induce the plaintiff into providing free consulting services.

The plaintiff, PBM consulting firm Valued Pharmacy Services of the Midwest LLC (VPS), is contracted by health plan providers to customize pharmacy benefit plans that attempt to save money for its clients. One such client was defendant Avera Health Plans Inc., a plan provider serving more than 85,000 beneficiaries, who sought VPS’s services in early 2020, the complaint said.

Accordingly, VPS designed a “specialty pharmacy benefit program” for Avera to implement, according to the complaint, spending “long hours over eight months” in developing the components for the purported agreed-upon effective date of Jan. 1.

However, VPS claimed that, suddenly, Avera told the plaintiff that it would not be implementing the program because VPS’s plan “had provided little of value,” the complaint said.

“Avera’s sudden about-face not only was incongruent with its business dealings with VPS up to that point, it also made little financial sense for Avera,” according to the plaintiff. “VPS’s program would have saved Avera millions of dollars per year. And, thanks to VPS, virtually all the work had been done to complete its implementation.”

VPS alleged, however, that Avera did end up implementing the program VPS designed, revealing that the defendant’s purported conduct was a calculated attempt at using VPS’s work while avoiding paying for it. The plaintiff claimed that Avera “tricked” VPS into providing program development services so that Avera could retain the components of the designed pharmacy benefit plan even after telling VPS it had abandoned implementation.

Avera’s stated desertion — and alleged quiet continuation — of the designed program came after the parties had been negotiating a master services agreement that would have stipulated an “ongoing services relationship” between the companies, according to the plaintiff. However, the parties never executed the agreement, as Avera told VPS it would be going in another direction with the plan after it expressed concerns about the cost of implementing a certain component. 

At this point, VPS believed Avera would not be implementing the program, as a company official told VPS that the letters they would have sent to Avera plan members about the program change would be destroyed — but in January, an Avera member called VPS to inquire about a letter it received detailing “certain amendments” to its plan for 2021, using VPS’s phone number that purportedly was provided in the letter, according to the complaint. VPS reported two more phone calls of the same nature.

Based on the plaintiff’s causes of action of fraudulent inducement, breach of contract, quantum meruit, and unjust enrichment, it is requesting actual and exemplary damages, among other relief.

Armstrong Teasdale LLP is representing VPS.