SSM Health Agrees to Nearly $1.1 Million Settlement Over Alleged Copay Waivers at SLU Hospital Pharmacy

St. Louis, Mo. (KFMO) - SSM Health has agreed to a civil settlement totaling nearly $1.1 million to resolve allegations that employees at the Saint Louis University Hospital pharmacy improperly waived patient copays, causing federal health care programs to overpay for prescription medications.

According to the U.S. Attorney’s Office for the Eastern District of Missouri, SSM will pay $939,290, representing double the restitution owed. The health system will also pay $150,000 in attorneys’ fees and costs related to the whistleblower lawsuit that led to the investigation.

The allegations stem from a qui tam, or whistleblower, lawsuit filed in U.S. District Court in St. Louis in 2023. The suit claimed that from September 1, 2020, through February 28, 2023, employees of the retail pharmacy at Saint Louis University Hospital routinely waived and failed to collect patient copays.

Federal officials say routine copay waivers are prohibited except in documented cases of financial hardship because they can improperly encourage patients to use a particular pharmacy. Authorities also allege that failing to collect copays misrepresents the actual cost of prescriptions, leading Medicare and the Federal Employees Health Benefits Program to pay inflated amounts in violation of the False Claims Act.

U.S. Attorney Thomas C. Albus said consistently failing to collect patient copays, except in documented hardship cases, violates federal law and increases costs to government health care programs. He also credited whistleblowers with helping uncover potential fraud and protecting taxpayer dollars.

Linda T. Hanley, Special Agent in Charge for the U.S. Department of Health and Human Services Office of Inspector General, said routine copay waivers misrepresent prescription costs and undermine safeguards designed to protect federal health care programs.

The whistleblower who filed the lawsuit will receive $159,210 from the settlement proceeds.

The settlement does not include any admission of liability by SSM Health. Federal officials noted that SSM fully cooperated with the investigation and implemented appropriate remedial actions.

The case was investigated jointly by the U.S. Attorney’s Office for the Eastern District of Missouri and the U.S. Department of Health and Human Services Office of Inspector General.