Court of Appeals Discharged Express Scripts HIPAA-Based Lawsuit

In 2019, five pharmacies took legal action against Express Scripts for misuse of patient information, which is a HIPAA violation.

Express Scripts is the leading pharmacy benefits manager in the US having its own retail drugstores and pharmacy service. The five pharmacies were members of the Express Scripts network and had to send specific statements to Express Scripts for processing and reimbursement prior to dispensing medications. The pharmacies likewise should include data related to the drugs in their claims, coupled with the contact details of their clients.

In the legal action, the pharmacies stated that Express Scripts broke the agreement and good-faith and fair-dealing covenant, and in so doing infringed the HIPAA and the HITECH Act. The pharmacies needed to present to Express Scripts data concerning their consumers, which it is supposed was then utilized to shift the clients to Express Scripts’ mail-order service. The pharmacies claimed it was not needed to provide those details to verify coverage and for payment.

The Pharmacies say that Express Scripts is making use of their confidential client data without having permission to shift their consumers to [Express Scripts] own mail-order service when [Express Scripts] need to just employ the details to affirm customers’ coverage and to pay the Pharmacies. The pharmacies furthermore stated the pharmacy benefits manager was working in unreasonable competition and revealed the Pharmacies’ trade secrets with its affiliates so as to grab the Pharmacies’ clients.

The district court dropped the case declaring the facts presented were not preserved and the agreements the pharmacies signed with Express Scripts permitted the pharmacy benefits manager to carry on with mail-order prescription arrangements without violation of any good faith agreements. The district court additionally decided that the pharmacies cannot file suit for a HIPAA violation since there is no private cause of action with HIPAA.

In their request against the judgment of the district court to disregard the case, the pharmacies outlined that the ruling to close the lawsuit for insufficient standing was erroneous because they were not striving to file a claim for a HIPAA violation. They additionally sought after the courts alternate reasoning that HIPAA merely lets the Pharmacies’ clients, not the Pharmacies, to permit the usage of their sensitive health info, be ignored. Express Scripts asserted that even though it was possible to point out a claim under HIPAA, the pharmacies were unable to give adequate facts to prove past or persistent HIPAA violations.

The pharmacies additionally said in their appeal that Express Scripts was just allowed to acquire information right after claims were processed and that the accumulation of consumer data was not necessary and was merely being compiled because of self-interest.

The 8th U.S. Circuit Court of Appeals established the lower court’s judgment that it’s not allowed to sue for a HIPAA violation, that the details furnished to Express Scripts weren’t protected, and the provisions of the pharmacies contract with Express Scripts granted the pharmacy benefits manager to make mail-order prescription services to the pharmacies’ consumers. The contracts agreed upon by the pharmacies claimed they agreed to work with Express Scripts for coordinating their consumers’ benefits, and mail service dispensing – even by means of Express Script’s own service – is categorized as benefits given to any member.

The Court of Appeals furthermore confirmed the lower courts dismissal of the pharmacies attempted monopolization accusation, stating that the Pharmacies didn’t plead enough information to match their “burden of alleging a specific market to be able to assert a credible antitrust claim.