Commissioner Lara announces online health provider The Pill Club pays $3.2 million over alleged fraudulent claims practices
News: 2023 Press Release
OAKLAND, Calif. — Insurance Commissioner Ricardo Lara today announced The Pill Club Holdings, Inc. (dba The Pill Club), formerly known as Hey Favor, Inc., paid $3.2 million after a California Department of Insurance investigation alleged it violated the California Insurance Frauds Prevention Act by submitting false claims to insurance companies for reimbursement for telehealth visits and prescribing and dispensing FC2 female condoms that were not medically necessary.
The Pill Club is an online health company that offers hormonal birth control, emergency contraceptives, and female condoms to patients via asynchronous and synchronous telehealth appointments. Patients fill out an online questionnaire. Nurse practitioners employed by The Pill Club would review the online questionnaires and prescribe hormonal birth control and/or FC2 female condoms based on a patient’s answers. The Pill Club allegedly falsely billed for the nurse practitioners’ review of the online questionnaires by claiming that the review was an in-person patient visit and that the visit lasted 16-30 minutes.
Additionally, The Pill Club allegedly submitted false claims to health insurers for reimbursement for FC2 female condoms that patients did not want and were not medically necessary. The Pill Club then dispensed the FC2 female condoms from its own in-house pharmacies based out of California and Texas.
“Fraudulent insurance claims and dispensing products and medications that are unwanted and not medically necessary only serves to increase costs for consumers and on the entire insurance marketplace,” said Commissioner Lara. “Protecting reproductive rights is vital, and this settlement protects patients and the marketplace.”
The Department began its investigation after receiving a qui tam complaint alleging The Pill Club violated California law and had a pattern of submitting fraudulent insurance claims. The relators were represented by Anderson Berry from Arnold Law Firm and Michel Hirst of Hirst Law Group PC. The California Attorney General separately also reached a settlement with The Pill Club for alleged violations under the California False Claims Act.
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Led by Insurance Commissioner Ricardo Lara, the California Department of Insurance is the consumer protection agency for the nation's largest insurance marketplace and safeguards all of the state’s consumers by fairly regulating the insurance industry. Under the Commissioner’s direction, the Department uses its authority to protect Californians from insurance rates that are excessive, inadequate, or unfairly discriminatory, oversee insurer solvency to pay claims, set standards for agents and broker licensing, perform market conduct reviews of insurance companies, resolve consumer complaints, and investigate and prosecute insurance fraud. Consumers are urged to call 1-800-927-4357 with any questions or contact us at www.insurance.ca.gov via webform or online chat. Non-media inquiries should be directed to the Consumer Hotline at 800-927-4357. Teletypewriter (TTY), please dial 800-482-4833.