Many hospitals objected, James’ office said, because they already had a third-party administrator. Other hospitals, upon contracting with CVS, had to use Wellpartner exclusively because they could not afford to pay two third-party administrators.

The hospitals that chose not to use Wellpartner were not eligible to collect 340B payments from patients using CVS pharmacies, losing money that could’ve been reinvested in care, the lawsuit alleges. Meanwhile, hospitals that used Wellpartner incurred millions of dollars in additional costs by hiring and training staff to understand that system.

James is seeking prohibitive action through the lawsuit, her office said, and monetary relief for the hospitals involved. In addition, James wants CVS to be required to tell safety-net hospitals and providers that they are not obligated to use Wellpartner in order to contract with CVS, her office said.

More than 4,440 safety-net providers, including Federally Qualified Health Centers, hospitals, rural referral centers, family planning clinics and the like, were enrolled in 340B programs in the state in 2021.

This story first appeared in our sister publication, Crain’s New York Business.