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The AHCS – Paduda lawsuit – quick update

I’ve gotten a number of calls and emails from friends and colleagues interested in – and concerned about – the news that AHCS has filed suit against me and my consulting firm for defamation etc.
Here’s where things stand.
1. I still haven’t been served with the suit. I doubt AHCS hired all those lawyers and PR flacks to just say they’re going to sue me, but as of today, no process server has appeared at my door. I further doubt they spent all their money calling reporters and filing suits, so perhaps they just forgot about letting me know…
2. To those folks interested in contributing to a legal defense fund, we’re working on it. As soon as we have all the details figured out, I’ll let you know. And in the meantime, thanks very much for all the moral support .
Which brings me to number 3.
In brief – AHCS just changed their website after some pointed questions from a probing reporter – not me.
Carol Gentry’s Health News Florida published a story today concerning the suit, a story well worth reading.
I’ll let the piece speak for itself, but do want to point out a couple of passages.
First, here’s this quote from AHCS’ CEO Paul Zimmerman – “We’re not a repackager. We don’t sell drugs. We don’t set the price on drugs,”.
Whoa, not so fast there. Here’s what followed that rather definitive statement…
“The AHCS executives said their company provides “healthcare IT” (information technology), not repackaging. “My mistake,” Paduda wrote later. “From reading their website they sure sounded like a repackager to me.”
Indeed, last week the company’s website,, said it had a “technology platform called ezDispense for point of care dispensing applications that enable [the company] to remove traditional barriers associated with physician dispensing.
“The company also provides [a] mail order program for physicians for certain medications; point-of-care drug testing procedure for the qualitative portion of the test; and custom-compounded topical solutions [emphasis added] for patients whose pain cannot be controlled with oral therapy alone.” ?
When Health News Florida pointed out what was on the website on Friday, Zimmerman said it was incorrect, that the company does not provide doctors with any drugs. [emphasis added] He did not explain how the website error occurred.
By mid-day Saturday, the section about providing some mail order and compounded drugs had vanished from the website.”
AHCS sued me (I think) for defamation based largely on my statement that they were a repackager, which I based on reading AHCS’ website. Which Zimmerman then admitted was ‘incorrect’.
I’d note that I pointed out the selfsame passages on AHCS website in my letter to them asking for clarification – but instead of clarifying, they spent all weekend working on a 21 page suit (or so I hear) which they then filed on Monday.
Caught in a ‘misstatement’, Zimmerman, his crony Jerry Glass, and their horde of PR flacks may decide to accuse the HNF reporter, John Dorschner, of misquoting Zimmerman or otherwise getting his facts wrong. Good luck with that – Dorschner is a seasoned, highly respected veteran reporter, far more knowledgeable and experienced than a mere blogger from Connecticut.
Zimmerman has another problem – he “noted that Paduda is president of CompPharma, which describes itself as a “consortium of pharmacy benefit management firms.” Zimmerman said these firms, often owned by insurance companies, are competitors of AHCS because the PBMs try to steer patients to pharmacies and away from doctor-dispensed drugs…Zimmerman berated Paduda for not disclosing that relationship in his postings about AHCS.”
First, someone should tell Zimmerman that I disclose my relationship with CompPharma when the posting even remotely references that organization. The offending posts had nothing to do with the comp PBM industry, but had everything to do with companies that reap enormous profits by taking advantage of loopholes in the system.
Furthermore, Zimmerman doesn’t have a clue about the comp PBM industry. Of the ten PBMs that are currently members of CompPharma, not one is owned by a workers comp insurance company.
Not a one.
For all the money he’s paying Ron Sachs and Panza Maurer, (what’s with the owl?) you’d think he’d have enough to actually get his facts straight.
Then again, he wouldn’t have had to spend any money at all if he just responded to my original letter.
Part of me wants to suggest to Zimmerman, Glass, and AHCS that they just drop the suit and leave me alone, and leave it at that.
But another part of me wants to go after these guys. They’re starting to really piss me off.
(sorry for the language, but I couldn’t think of anything else that adequately conveyed my anger)

13 thoughts on “The AHCS – Paduda lawsuit – quick update”

  1. Joe,
    I have read every post you have had for the last 2 years and thoroughly enjoy them. I cannot beleive that with the disclosure you always have about your disclosure of your involvement with Comppharma, that your blogs are more a perception of the market based on your experince and knowledge of the pharma market that a “competitior” would file a defamation suit in the hopes of damages based on lost revenue. With the job rate at the highest levels some markets have not seen in years (FL)economic factors, insurers looking to reduce costs and claim costs and premium increases, pressure to control costs in pharma, repackaging repricing via physician dispensing or otherwise would have come full circle as insurers would have eventually examined this area of billing and reimbursement. Draw your own conclusions here. From your comments on the prosecution of Sandy Blunt, Cybthia Feland, Mine Workers, Implant Cost Overruns and so much more are they going to try to tear you apart for what the new electronic media allows us to post anywhere, anytime, anything that we think. Orwell comes to mind with the image of big brother trying to control what these companies have profited from in the past but with health reform (yeah I know too much here to even go into) on the horizon, compettitive bidding and reform of the pharma pricing index (has this been decided yet?) I see that this may become a moot issue in years to come. The FDA and IRS has raided MD offices and Infusion Pharmacies in the past 2 years for deceased patients, over charging for “custom mixed” medications that come pre mixed from the manufacturers and this is an ongoing Issue that CMS continues to deal with everyday.
    With all that we are seeing in costs on pain medications, rise in prescriptions and claim costs why are you the only one being sued and not served? Nice marketing media blitz to promote that we will sue you for being honest. What’s next? A ticket for being moral and using a blog to express views based on your experience and retracting anything that is incorrect if information is provided to support it for your readers? If freedom of the press works in print and they can retract why can’t you? This is a sound argumnet in a court of law everyday? Hang in there. I’m going to have a baloney sandwich and think about this.
    P.S. Joe, I could use some help on implantable reimbursements regulations in the US per state. Could you help me with this? Please let me know if you have any questions.
    A Daily Reader

  2. Joe,
    Good things happen for good people. Stay focused on delivering the “news” to us readers as you make a huge difference how things take place in our industry. Keep up the amazing blogs Joe.
    Bob Barson

  3. What IS with the owl? I almost fell off my chair laughing when I opened their site. The best I could figure is that owls are always looking over their shoulder and asking the question “who?”
    The suit sure looks like a very defensive reaction … hmmmm… could they be hiding something? Maybe they should take a lesson in transparency from you 🙂

  4. I agree with the other posts, these folks are way out in left field! This is a great example of a frivolous lawsuit if I ever saw one. No doubt they’ll either withdraw or you’ll beat the stuffing out of them. Keep up the great posts, Joe.

  5. Wow, hadn’t heard of this until now.
    First: best of luck fighting the good fight. PLEASE keep us posted about a legal defense fund (so I can post the link at IB, as well as contribute to it).
    Second: perhaps the folks at AHCS should be wary themselves; after all, “discovery is a b*tch.”
    We’re with you!

  6. Sorry this is happening to you, Joe – and count me as a supporter. When I think of integrity, honesty and industry insider knowledge, you are way high up on my list. I don’t know these people but I would stack your truthfulness and integrity quotient up against anyone!

  7. You used a website (theirs) to make conclusions, so I followed your methodology.
    On the CompPharma website, I went to the member list.
    Aetna is NOT an insurance company? I stopped there because it’s the first on the list, went to their site and under legal notices, they indicated it was a subsidiary of Aetna? Did I go to the wrong webpage?
    Seems like calling the 800 number on the ahcs website would have saved you some of this headache. Not very good journalism, but I support your right to write what you want to. Even if it comes at a cost.
    I doubt you’ll add this comment, but Aetna is an insurance company. And insurance companies have not been hurt one bit by rx costs. They pass those thru to employers/consumers while denying claims; that’s why their profits continue to soar.

  8. Hello FR, and thanks for the comment. Allow me to respond to your observations.
    1. Aetna IS indeed an insurance company – but NOT a workers comp insurance company. Recall I specifically stated “Of the ten PBMs that are currently members of CompPharma, not one is owned by a workers comp insurance company.” It is also the ONLY CompPharma member owned by an insurance company of any kind.
    2. In fact I did contact AHCS, but they did not respond (I mentioned this in an earlier post which you may have missed).
    3. Insurance companies have been ‘hurt’ by rising drug costs – as have consumers – like us. So have taxpayers; Miami-Dade Schools risk manager estimated this practice has added $700,000 in costs to their system. That’s about a half-dozen teachers.
    Thanks again, and welcome to MCM.

  9. AHCS’ CEO Paul Zimmerman – “We’re not a repackager. We don’t sell drugs. We don’t set the price on drugs,”.
    That’s odd since I am holding in my hand a bill from Prescription Partners for drugs dispensed from a Michigan dr’s office. What am I missing?

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Joe Paduda is the principal of Health Strategy Associates



A national consulting firm specializing in managed care for workers’ compensation, group health and auto, and health care cost containment. We serve insurers, employers and health care providers.



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