National Long-Term Care Provider

Damages Expert

The nation’s largest privately owned provider of long-term care, with more than 200 facilities located in 29 states, engaged HMP to evaluate the economic damages associated with an identified long-term pattern pricing errors for drugs supplied by the company’s institutional pharmacy vendor.

Issues

• The dispute revolved around the interpretation of contract terms, as well as the inconsistent application of those terms across more than 200 nursing homes located in 29 states over an eight-year period.
• Because of the nature of the pharmaceutical business and its complicated pricing structures across state Medicaid programs, the assignment was very data intensive and involved the statistical sampling of millions of individual pharmacy records and a detailed review of those samples.
• The institutional pharmacy had completed numerous acquisitions of small or regional competitors over the relevant period resulting in the existence of many different accounting systems being used.

Approach

• HMP engaged a forensic economist from one of our corporate partners and together created a new pricing database utilizing the contract terms and the published pharmaceutical pricing per industry guidance. 
• HMP developed a damage calculation using accepted statistical algorithms applied to the new database. 

Result