Comptroller Kennedy Claws Back $2.8 Million

Audits of a former management company handling pharmacy benefits for county employees have netted Suffolk taxpayers $2.8 million.

The audit division of Suffolk Comptroller John M. Kennedy’s office clawed back the money from WelldyneRX, Inc. after they revealed that the company did not achieve contracted terms and found substantial shortfalls in rebates, pricing, discounts, and fees due to the county.

“Medical benefit costs are a major portion of the county’s budget, and it is my obligation to ferret out fraud, waste, and abuse to preserve these benefits for the employees of Suffolk County and to ensure that taxpayer funds are not misspent,” Kennedy said. “These audits underscore the need for fiscal management and vendor oversight through audit, especially during a time of record inflation, high taxes, and ever-rising medical expenses.

The county ended its administrative service agreement with WelldyneRX, Inc. in 2021 after seven and a half years of administering the pharmacy benefit portion of its self-insured medical plan, according to the comptroller. Last year, the county contracted with Express Scripts, Inc. to administer its pharmacy benefit.

Kennedy’s office, in conjunction with the Plan’s Labor Management Committee, engaged the Segal Group to perform five financial and benefit design audits of Welldyne, revealing issues that led to the company agreeing to refund the $2.8 million back to the county. A prior audit of Welldyne $2.6 million in misspent taxpayer funds. Overall, the comptroller’s audits have yielded over $7 million in recovered funds and recommendations that have resulted in cost-saving measures.

The County’s self-insured employee medical plan covers over 45,000 active employees, spouses, dependent children, dependent survivors, and retirees making it one of the largest medical plans in Suffolk County. The plan has an average yearly spend of over $550 million, which is offset by employee contributions, Kennedy noted. Since taking office in 2016, his Audit Division has been aggressively auditing each of the vendors that provide benefit services to the plan (major medical/hospital, pharmacy, and behavioral health) to ensure compliance with contractual obligations and industry best practices.

Those under the plan when it was managed by WelldyneRX complained of slow service in getting prescriptions filled and bad customer service. “Express Scripts does a better job,” the employee said.

Suffolk County Comptroller John M. Kennedy Jr. File Photo

In other good news for the taxpayers, the administration of Gov. Kathy Hochul gave up on an effort to raise the tax New York extracts from pharmacy benefit managers such as Express Scripts. They were looking to raise the state “dispensing fee” to $10.18, up from the current $2-$3 per prescription.

“When multiplied by the millions of prescriptions that New Yorkers fill each year, the additional expense for the health system as a whole would have reached into the billions – and ultimately add to what are already some of the highest insurance premiums in the United States,” said Assemblyman Joseph DeStefano, an opponent of the dispensing fee. “We’re glad they gave up on that.”