Corcoran et al v. CVS Health Corporation

Northern District of California, cand-4:2015-cv-03504

Exhibit A

Interested in this case?

Current View

Full Text

6 Exhibit A 6 1 UNITED STATES DISTRICT COURT 2 NORTHERN DISTRICT OF CALIFORNIA 3 ------------------------------x 4 CHRISTOPHER CORCORAN, et al.,: 5 Plaintiffs,: 6 v.: Case No. 7 CVS PHARMACY, INC.,: 3:15-cv-03504-YGR 8 Defendant.: 9 ------------------------------x 10 11 Videotaped Deposition of MICHAEL D. REICHARDT 12 Schaumburg, Illinois 13 Tuesday, December 20, 2016 14 9:08 a.m. 15 16 17 18 19 20 21 22 Job No.: 130134 23 Pages: 1 - 286 24 Reported by: Melanie L. Humphrey-Sonntag, 25 CSR, RDR, CRR, FAPR 6 Transcript of Michael D. Reichardt Conducted on December 20, 2016 2 1 Videotaped deposition of MICHAEL D. REICHARDT, 2 held at the location of: 3 4 OPTUMRx 5 1600 McConnor Parkway 6 Third Floor 7 Schaumburg, Illinois 60173 8 (800) 282-3232 9 10 11 12 13 Pursuant to subpoena before Melanie L. Humphrey- 14 Sonntag, a Certified Shorthand Reporter, Registered 15 Diplomate Reporter, Certified Realtime Reporter, and 16 a Notary Public in and for the State of Illinois. 17 18 19 20 21 22 23 24 25 PLANET DEPOS 888.433.3767 | WWW.PLANETDEPOS.COM 6 Transcript of Michael D. Reichardt Conducted on December 20, 2016 7 1 P R O C E E D I N G S 2 (Plaintiffs' Exhibits 690, 691, 692, and 3 693 marked for identification and attached to the 4 transcript.) 09:08:18 5 THE VIDEOGRAPHER: We are on the record. 09:08:18 6 The time is 9:08. 09:08:20 7 Here begins Disk 1 in the videotaped 09:08:23 8 deposition of Michael D. Reichardt, individual, in 09:08:28 9 the matter of Corcoran, et al., versus CVS Pharmacy, 09:08:32 10 Inc., in the United States District Court, Northern 09:08:38 11 District of California, Case No. 3:15-cv-03504-YGR. 09:08:46 12 Today's date is December 20th, 2016. The 09:09:01 13 videographer today is Stephen Goethals, representing 09:09:05 14 Planet Depos. This video deposition is taking place 09:09:08 15 at 1600 McConnor Parkway, Schaumburg, Illinois. 09:09:13 16 Would counsel please voice-identify 09:09:20 17 themselves and state whom they represent. 09:09:22 18 MR. LEWIS: Richard Lewis for the plaintiff. 09:09:23 19 MS. SPERO: Michaela Spero for the 09:09:28 20 plaintiff. 09:09:30 21 MR. GEYERMAN: Grant Geyerman and Vivaan 09:09:31 22 Nehru from Williams & Connelly on behalf of the 09:09:33 23 defendant, CVS Pharmacy, Inc. 09:09:36 24 MR. HEENAN: And Garrett Heenan on behalf of 09:09:37 25 Third Party Optum. 09:09:39 PLANET DEPOS 888.433.3767 | WWW.PLANETDEPOS.COM 6 Transcript of Michael D. Reichardt Conducted on December 20, 2016 8 1 THE VIDEOGRAPHER: The court reporter today 09:09:42 2 is Melanie Sonntag, Certified Realtime Reporter, 09:09:43 3 representing Planet Depos. 09:09:45 4 Would the reporter please swear in the 09:09:47 5 witness. 09:09:48 6 THE COURT REPORTER: Would you raise your 12:01:35 7 right hand, please. 12:01:35 8 (Witness sworn.) 12:01:35 9 THE COURT REPORTER: Thank you. 12:01:35 10 A THE WITNESS: You're welcome. 12:01:35 11 MR. LEWIS: Good morning, Mr. Reichardt. 09:10:03 12 A THE WITNESS: Good morning. 09:10:05 13 MR. LEWIS: We met briefly. My name's 09:10:05 14 Rich Lewis. I'm one of the lawyers for the 09:10:08 15 plaintiffs, and I'm going to be taking your 09:10:10 16 deposition today, first related to your declaration 09:10:12 17 in your individual capacity. 09:10:14 18 Before we get started, I just wanted to note 09:10:18 19 for the record that there's an order in the case 09:10:20 20 from December 9th that the only objections allowed 09:10:22 21 are objections to form and to attorney-client 09:10:26 22 privilege. 09:10:28 23 MR. GEYERMAN: I'll just add for the record 09:10:31 24 that defense counsel supplied a copy of the order 09:10:33 25 for the benefit of counsel for the third party here 09:10:36 PLANET DEPOS 888.433.3767 | WWW.PLANETDEPOS.COM 6 Transcript of Michael D. Reichardt Conducted on December 20, 2016 9 1 so that counsel would have that order. 09:10:41 2 MR. LEWIS: Thank you. 09:10:43 3 MICHAEL D. REICHARDT, 09:10:43 4 having been duly sworn, testified as follows: 09:10:43 5 EXAMINATION BY COUNSEL FOR THE PLAINTIFFS 09:10:00 6 BY MR. LEWIS: 09:10:00 7 Q Mr. Reichardt, have you ever given a 09:10:48 8 deposition or had your deposition taken before? 09:10:50 9 A I have. 09:10:53 10 Q Was that in a professional capacity? 09:10:53 11 A It was. 09:10:55 12 Q And how many times? 09:10:56 13 A Just once. 09:10:57 14 Q And when was that? 09:10:58 15 A Approximately nine years ago. 09:10:59 16 Q And who were you working for at the time? 09:11:03 17 A I was working for UnitedHealthcare. 09:11:06 18 Q And what was the deposition about in very 09:11:07 19 general terms? 09:11:10 20 A General terms, it was -- let me think back. 09:11:11 21 That's a good question. 10 years ago. 09:11:27 22 Q I can withdraw it. No problem. 09:11:29 23 Could you state -- 09:11:31 24 A It's irrelevant. 09:11:31 25 Q Can you state your full name and address for 09:11:33 PLANET DEPOS 888.433.3767 | WWW.PLANETDEPOS.COM 6 Transcript of Michael D. Reichardt Conducted on December 20, 2016 16 1 usual and customary pricing? 09:18:39 2 A It did not. 09:18:41 3 Q Do you know if it had anything to do with 09:18:42 4 discounts? 09:18:43 5 A No. 09:18:44 6 MR. GEYERMAN: Objection to form. 09:18:44 7 Q What -- throughout the day a lawyer might 09:18:48 8 object, and then when -- when he or she finishes, 09:18:50 9 you can answer the question unless you're instructed 09:18:53 10 by your counsel not to do that. 09:18:55 11 A Okay. 09:18:57 12 Q Okay. In terms of your -- your personal 09:18:57 13 background, you started with UnitedHealthcare in 09:19:14 14 1999; is that correct? 09:19:18 15 A That's correct. 09:19:20 16 Q And you worked there until 2011? 09:19:22 17 A Yes. 09:19:24 18 Q And then you came back to UnitedHealthcare 09:19:24 19 in 2014; is that correct? 09:19:29 20 A Technically I came to Catamaran, who was 09:19:36 21 acquired by Optum. Upon acquisition, my tenure was 09:19:43 22 reinstated. Being a former employee. 09:19:46 23 Q From 1999 to 2011 your -- your employer was 09:19:52 24 UnitedHealthcare Group; is that correct? 09:19:57 25 A UnitedHealth Group at the time, correct. 09:20:00 PLANET DEPOS 888.433.3767 | WWW.PLANETDEPOS.COM 6 Transcript of Michael D. Reichardt Conducted on December 20, 2016 17 1 Q And what -- was there an entity called Optum 09:20:03 2 during those years? 09:20:05 3 A There was. 09:20:07 4 Q And what was the relationship between Optum 09:20:07 5 and UnitedHealth Group in those years? 09:20:09 6 A Optum was a subsidiary of UnitedHealth 09:20:12 7 Group. 09:20:15 8 Q And what did -- what was the business of 09:20:15 9 Optum during those years? 09:20:18 10 A Mainly the health and well-being benefits. 09:20:21 11 So other than the health insurance, disease 09:20:26 12 management, et cetera. 09:20:27 13 Q Was there a prescription drug benefit 09:20:30 14 administered by Optum during those years? 09:20:34 15 A Partially. 09:20:37 16 Q And what do you mean by "partially"? 09:20:44 17 A Until Prescription Solutions was acquired. 09:20:48 18 Q And when was that? 09:20:51 19 A I'm not sure of the date. 09:20:52 20 Q Approximately. 09:20:53 21 A I don't have an accurate answer for that. 09:20:54 22 Q All right. What were your major 09:21:06 23 responsibilities at UnitedHealthcare from 1999 09:21:12 24 to 2011? 09:21:18 25 A Mainly managing physician, hospital, and 09:21:18 PLANET DEPOS 888.433.3767 | WWW.PLANETDEPOS.COM 6 Transcript of Michael D. Reichardt Conducted on December 20, 2016 18 1 ancillary relationships. And then managing a team 09:21:22 2 of contract negotiators that would negotiate on the 09:21:26 3 company's behalf with our provider network, 09:21:29 4 "providers" being hospitals, ancillaries, and 09:21:32 5 physicians. 09:21:36 6 Q And did you have any responsibilities during 09:21:36 7 that time frame for negotiating prescription drug 09:21:39 8 benefits? 09:21:44 9 A For a portion of that time I did. Not 09:21:44 10 really benefits. I worked for the discount card 09:21:50 11 program. And we had one network that was a pharmacy 09:21:52 12 network. 09:21:57 13 Q And what -- what is -- what was the discount 09:21:58 14 card program that you're referring to? 09:22:01 15 A HealthAllies. 09:22:02 16 Q And what is that? 09:22:05 17 A That is a discount card program. 09:22:07 18 Q For what? 09:22:09 19 A For members either without insurance or that 09:22:10 20 are underinsured. Or prefer to pay cash. 09:22:15 21 Q Did that relate in any way to a prescription 09:22:18 22 drug benefit? 09:22:30 23 A The term "benefit" is probably -- the term 09:22:30 24 "discount" is used and not "benefit." 09:22:36 25 "Benefit" usually refers to an insurance 09:22:39 PLANET DEPOS 888.433.3767 | WWW.PLANETDEPOS.COM 6 Transcript of Michael D. Reichardt Conducted on December 20, 2016 25 1 from 1999 to 2011, have you described any 09:30:08 2 responsibilities you had during that time frame that 09:30:13 3 related to a -- a pharmacy benefit or a discount for 09:30:16 4 buying pharmaceutical drugs? 09:30:21 5 A So can you paraphrase the question? Are you 09:30:23 6 asking if there's any other time -- 09:30:27 7 Q I'm asking if you had other -- 09:30:29 8 A -- that I negotiated -- 09:30:29 9 Q I'm sorry. 09:30:32 10 I'm asking if you had any other experience 09:30:32 11 other than what we've talked about between 1999 and 09:30:34 12 2011 related to benefits for the prescription -- for 09:30:36 13 the purchase of prescription drugs. 09:30:46 14 A No. 09:30:50 15 Q All right. When you left UnitedHealth 09:30:50 16 Group, you went to CIGNA; is that correct? 09:30:52 17 A That's correct. 09:30:56 18 Q And what is CIGNA? 09:30:57 19 A CIGNA is an insurer. 09:30:58 20 Q Would it also go under the name of a 09:31:00 21 third-party plan? 09:31:02 22 A HealthSpring. So HealthSpring was their 09:31:03 23 Medicare division. 09:31:07 24 And at the time I was at HealthSpring, CIGNA 09:31:08 25 acquired HealthSpring. 09:31:12 PLANET DEPOS 888.433.3767 | WWW.PLANETDEPOS.COM 6 Transcript of Michael D. Reichardt Conducted on December 20, 2016 30 1 Q All right. You left CIGNA in 2013 and went 09:35:35 2 to Blue Cross Blue Shield; is that correct? 09:35:41 3 A That's correct. 09:35:44 4 Q What did you do there? 09:35:44 5 A I worked basically negotiating contracts and 09:35:45 6 contract strategy for our Medicare -- our dual 09:35:50 7 eligibles that we've mentioned earlier and the 09:35:54 8 commercial plan. My main responsibilities were 09:35:58 9 around the Medicare and dual eligibles. 09:36:01 10 Q And did you negotiate pharmacy drug benefits 09:36:05 11 for the Medicare members and the dual-eligible 09:36:10 12 members? 09:36:14 13 A No, I did not. 09:36:14 14 Q Did you negotiate with pharmacy providers 09:36:16 15 during that time? 09:36:21 16 A No, sir. 09:36:22 17 Q Who did you negotiate with? 09:36:23 18 A With hospitals, ancillary providers, and 09:36:24 19 physicians. 09:36:29 20 Q Did you have any professional contacts with 09:36:30 21 pharmacies in that position? 09:36:36 22 A No, I did not. 09:36:37 23 Q All right. When you left Blue Cross in 09:36:38 24 October of 2014, what was your next position? 09:36:49 25 A At Catamaran as the senior director of 09:36:52 PLANET DEPOS 888.433.3767 | WWW.PLANETDEPOS.COM 6 Transcript of Michael D. Reichardt Conducted on December 20, 2016 31 1 then-provider relations. 09:36:59 2 Q And what is Catamaran? 09:37:00 3 A Catamaran is a pharmacy benefit manager. 09:37:02 4 Or PBM. 09:37:10 5 Q All right. And did you start with them in 09:37:12 6 January of 2015? 09:37:13 7 A Yes. 09:37:14 8 Q Do you know the exact date -- or your best 09:37:14 9 estimate of the exact date? 09:37:17 10 A I think it was about the 19th. Of January. 09:37:18 11 Q All right. And -- and between October in 09:37:27 12 2014, when you left Blue Cross, and January -- 09:37:31 13 approximately January 19th -- when you began at 09:37:35 14 Catamaran, were you employed? 09:37:37 15 A No. 09:37:38 16 Q Were you doing any consulting? 09:37:40 17 A No, I was not. 09:37:42 18 Q Were you doing anything in the professional 09:37:43 19 health care world at that time? 09:37:48 20 A No. 09:37:49 21 Q And what was your first position at 09:37:50 22 Catamaran? 09:37:56 23 A I think I previously stated it was the 09:37:57 24 senior director of provider relations. 09:37:59 25 Q And what kind of providers were you dealing 09:38:01 PLANET DEPOS 888.433.3767 | WWW.PLANETDEPOS.COM 6 Transcript of Michael D. Reichardt Conducted on December 20, 2016 34 1 Q Prior to 2015, had you ever heard of a 09:40:54 2 definition of "U&C" other than "cash price including 09:40:57 3 discounts"? 09:41:00 4 A In the medical arena, yes. 09:41:01 5 Q How about in the pharmaceutical benefit 09:41:06 6 arena? 09:41:12 7 A I had not. 09:41:13 8 Q And when did -- I'm sorry. 09:41:14 9 In terms of the 80 contracts that you 09:41:22 10 negotiated since beginning your work at Catamaran, 09:41:24 11 were those all with pharmacy providers? 09:41:28 12 A Yes. 09:41:30 13 Q And does that include chains and independent 09:41:31 14 pharmacies? 09:41:35 15 A It does. 09:41:36 16 Q Are there other kinds of pharmacies other 09:41:36 17 than the two I mentioned? 09:41:38 18 A They break down in kind of specialty 09:41:42 19 pharmacies that might only do workers' compensation, 09:41:45 20 but, in general, they all have an NCPDP number, 09:41:46 21 which would be an independent or chain code, which 09:41:52 22 would be a chain. Beyond that I think you covered 09:41:54 23 the two broad categories. 09:41:55 24 Q So in the area of -- of chain pharmacies, 09:41:57 25 did you negotiate a contract with CVS? 09:42:01 PLANET DEPOS 888.433.3767 | WWW.PLANETDEPOS.COM 6 Transcript of Michael D. Reichardt Conducted on December 20, 2016 35 1 A I assisted with that, correct. 09:42:03 2 Q Was that the one that was signed in late 09:42:06 3 January 2015? 09:42:08 4 A No, it was not. 09:42:09 5 Q What is the one you assisted with? 09:42:11 6 A The recent one that we have negotiated, 09:42:16 7 effective 1/1/17. 09:42:18 8 Q What was your role in the CVS-Optum contract 09:42:20 9 signed in late January 2015? 09:42:25 10 A Really, to service the contract and the 09:42:26 11 account and to take it over postnegotiation or 09:42:31 12 signature. 09:42:35 13 Q So is it fair to say you didn't participate 09:42:35 14 in the negotiation? 09:42:38 15 A That's correct. 09:42:39 16 Q You didn't participate in the drafting? 09:42:39 17 A Correct. 09:42:43 18 I wasn't employed at the time by Catamaran. 09:42:48 19 Q And Catamaran was -- after you began your 09:42:52 20 employment with Catamaran, they were -- they were 09:42:57 21 taken over by another company? 09:42:59 22 A They were acquired. 09:43:00 23 Q Acquired. And who acquired them? 09:43:02 24 A Optum Health Services. 09:43:04 25 Q And approximately when was that? 09:43:07 PLANET DEPOS 888.433.3767 | WWW.PLANETDEPOS.COM 6 Transcript of Michael D. Reichardt Conducted on December 20, 2016 81 1 Q And that was the definition used by Optum 10:51:14 2 and CVS for the 16-year period from 1999 to 2015; 10:51:16 3 correct? 10:51:22 4 A That's my understanding. 10:51:22 5 Q And no other definition was ever used? 10:51:23 6 A That's my understanding. 10:51:26 7 Q And during that time frame, this definition 10:51:28 8 was consistent with the industry definition of 10:51:31 9 "usual and customary"; correct? 10:51:35 10 MR. GEYERMAN: Objection to form. 10:51:37 11 A I can make an assumption. Again, my tenure 10:51:38 12 started after that, but my general assumption is 10:51:44 13 I think that is generally consistent. 10:51:46 14 Q And that assumption is based on your own 10:51:49 15 experience; correct? 10:51:50 16 A Yes. 10:51:52 17 Q In paragraph 8 you talk about the new 10:51:54 18 agreement of January 29th, 2015. 10:52:03 19 Just to clarify, you did not participate in 10:52:07 20 the negotiation or the drafting of that agreement; 10:52:10 21 correct? 10:52:12 22 A That is correct. 10:52:12 23 Q You didn't participate in any discussions 10:52:13 24 about any changes in the new agreement; correct? 10:52:15 25 I'm sorry. 10:52:20 PLANET DEPOS 888.433.3767 | WWW.PLANETDEPOS.COM 6 Transcript of Michael D. Reichardt Conducted on December 20, 2016 82 1 Any discussions leading up to the signing of 10:52:21 2 the contract on January 29th, 2015. 10:52:25 3 A That's correct. 10:52:28 4 Q Do you know who at Optum did participate in 10:52:30 5 those discussions? 10:52:36 6 A I know a few individuals that did, yes. 10:52:37 7 Q Who was that? 10:52:42 8 A Carrie Tichey and Todd Borowski. 10:52:43 9 Q And have you talked to them about this 10:52:48 10 negotiation? 10:52:54 11 A I have not. 10:52:54 12 About -- can I ask for a clarification? 10:52:57 13 Q Sure. 10:52:59 14 A About the negotiation that took place prior 10:52:59 15 to the January 29th, 2015, agreement? 10:53:03 16 Q Yes. 10:53:06 17 A No, I have not discussed that with them. 10:53:07 18 They're no longer with the company. 10:53:15 19 Q And in paragraph 9 you give the new 10:53:17 20 definition of "usual and customary charge" in the 10:53:31 21 new contract from January 29th, 2015; correct? 10:53:35 22 A Yes. 10:53:38 23 Q And the new definition changed the word 10:53:39 24 "including" to the word "excluding" in relation to 10:53:44 25 certain discounts; correct? 10:53:48 PLANET DEPOS 888.433.3767 | WWW.PLANETDEPOS.COM 6 Transcript of Michael D. Reichardt Conducted on December 20, 2016 108 1 agreement -- the numbers are in the lower right-hand 11:31:01 2 corner. 11:31:07 3 A (Complied.) 11:31:09 4 Q Section 9.1 is an integrated agreement or 11:31:10 5 something called an integration clause. Are you 11:31:15 6 familiar with what that means? 11:31:18 7 A Give me a minute to read through it. 11:31:18 8 Q Sure. 11:31:22 9 A Yes, I am. 11:31:42 10 Q And is it fair to say that it means that 11:31:43 11 this agreement can only be amended by a written 11:31:46 12 document executed by both CVS and Optum? 11:31:50 13 MR. GEYERMAN: Objection to form. 11:31:53 14 A I'm just reading through it one more time. 11:31:56 15 Q Sure. 11:32:01 16 A And can you paraphrase the question one more 11:32:15 17 time? 11:32:19 18 Q Yeah. I understand you're not a lawyer. 11:32:19 19 I'm asking you if you have an understanding 11:32:21 20 that what this means is that this agreement and its 11:32:23 21 terms cannot be amended without a written instrument 11:32:27 22 executed by both CVS and Optum. 11:32:30 23 A That would be my interpretation based on the 11:32:32 24 last sentence of 9.1. 11:32:35 25 Q And you have no personal knowledge how this 11:32:38 PLANET DEPOS 888.433.3767 | WWW.PLANETDEPOS.COM 6 Transcript of Michael D. Reichardt Conducted on December 20, 2016 109 1 agreement was interpreted from 1999 to January 28th, 11:33:00 2 2015; correct? 11:33:08 3 MR. GEYERMAN: Objection to form. 11:33:09 4 A No, I do not. 11:33:10 5 Q And if you turn to page 12, there's a 11:33:12 6 definition of "usual and customary." 11:33:28 7 Do you see that? 11:33:31 8 A I do. 11:33:32 9 Q And that's the same definition that you've 11:33:35 10 put in paragraph 7 of your declaration; correct? 11:33:37 11 A If you give me a minute, I'll just verify 11:33:45 12 that. 11:33:55 13 That's correct. 11:34:02 14 Q And that was the definition in all Optum 11:34:03 15 contracts from 1999 up until January 28th, 2015; 11:34:08 16 correct? 11:34:15 17 MR. GEYERMAN: Objection to form. 11:34:16 18 A All Optum contracts excluding Catamaran. 11:34:17 19 Q Excluding Catamaran. Which is the exhibit 11:34:20 20 we looked at earlier? 11:34:23 21 A That's correct. 11:34:24 22 Q All right. And this -- based on your 11:34:24 23 knowledge, this would be a typical definition used 11:34:28 24 in the industry during the years 1999 to 2015; 11:34:31 25 correct? 11:34:35 PLANET DEPOS 888.433.3767 | WWW.PLANETDEPOS.COM 6 Transcript of Michael D. Reichardt Conducted on December 20, 2016 110 1 MR. GEYERMAN: Objection to form. 11:34:36 2 MR. HEENAN: Join. 11:34:38 3 A I would have to make a general assumption 11:34:39 4 because I really wasn't in the pharmacy industry at 11:34:41 5 that time. I was in, quote, "the medical industry." 11:34:45 6 Q So you don't have any personal knowledge 11:34:52 7 whether it was used throughout the industry from 11:34:53 8 1999 to 2015? 11:34:57 9 A I do not. 11:34:58 10 Q And if you turn to page 14, this is an 11:34:59 11 example -- what is Exhibit D on page 14? 11:35:12 12 A Just give me a minute to review that. 11:35:17 13 It's a compensation schedule for 11:35:39 14 reimbursement. 11:35:40 15 Q All right. And it includes one of those 11:35:41 16 "lower of" clauses in the middle of the page that we 11:35:43 17 talked about earlier in the deposition; correct? 11:35:46 18 MR. GEYERMAN: Objection to form. 11:35:49 19 Q There's an asterisk that says, "If the 11:35:53 20 calculated price" -- 11:35:56 21 A Yes, so -- 11:35:58 22 MR. GEYERMAN: Objection to form. 11:35:58 23 A THE WITNESS: Sorry. 11:35:58 24 A (Continuing.) Yes, it does, in the A and 11:36:00 25 B sections. 11:36:05 PLANET DEPOS 888.433.3767 | WWW.PLANETDEPOS.COM 6 Transcript of Michael D. Reichardt Conducted on December 20, 2016 118 1 MR. LEWIS: I understand. I withdraw the 11:47:27 2 question. 11:47:28 3 Do you have the cover e-mail and the markup? 11:48:01 4 That would be 69 -- 11:48:18 5 THE COURT REPORTER: 7. 11:48:19 6 MR. LEWIS: -- 7. 11:48:22 7 (Plaintiffs' Exhibit 697 marked for 11:48:26 8 identification and attached to the transcript.) 11:48:42 9 BY MR. LEWIS: 11:48:42 10 Q Mr. Reichardt, I'm showing you Exhibit 697. 11:48:44 11 There's a cover e-mail and then a document behind 11:48:47 12 it. Let's start with the cover e-mail. 11:48:49 13 Do you know who Debbie Veale is? 11:48:55 14 A I do. 11:48:59 15 Q And do you -- do you have any knowledge 11:49:01 16 related to whether CVS was negotiating with Optum in 11:49:08 17 2013 and asked for changes in the agreement? 11:49:12 18 MR. GEYERMAN: Objection to form. 11:49:16 19 A Other than the document you've presented, no. 11:49:17 20 Q Have you ever seen the document -- either 11:49:23 21 the cover e-mail or the document I've presented? 11:49:26 22 A As of yesterday I did. 11:49:28 23 Q All right. Did you review documents 11:49:31 24 yesterday to prepare for the deposition? 11:49:36 25 A I did. 11:49:38 PLANET DEPOS 888.433.3767 | WWW.PLANETDEPOS.COM 6 Transcript of Michael D. Reichardt Conducted on December 20, 2016 124 1 A Let me just read through it one more time. 11:57:53 2 Q Sure. 11:57:57 3 A Correct. 11:57:59 4 Q All right. And you've stated in your 11:58:26 5 declaration that it was Optum's understanding that 11:58:30 6 the HSP prices did not need to be included as 11:58:36 7 U&C prices during the time frame the HSP program 11:58:42 8 existed from 2008 up until the new contract in 11:58:46 9 January of 2015; correct? 11:58:52 10 A Correct. 11:58:56 11 Q Then why did they need to change the 11:58:57 12 language if they had an understanding in place for a 11:59:01 13 seven-year period? 11:59:07 14 MR. GEYERMAN: Objection to form. 11:59:10 15 A So we're asking me the intent. It's hard, 11:59:16 16 as a contract negotiator, to know if you're not 11:59:18 17 there. Are you asking for my opinion? 11:59:21 18 Q Yes. 11:59:22 19 A That the market changes, language becomes 11:59:23 20 out of date, definitions become obsolete or in need 11:59:30 21 of a change. 11:59:33 22 Those are some of the reasons we often 11:59:41 23 update definitions or change them. Sometimes you 11:59:43 24 have the "included but not limited to" language, and 11:59:45 25 there needs to be more clarification around what 11:59:49 PLANET DEPOS 888.433.3767 | WWW.PLANETDEPOS.COM 6 Transcript of Michael D. Reichardt Conducted on December 20, 2016 125 1 that means but not exhaust all the options. 11:59:50 2 Q Do you ever remember making a contract 11:59:54 3 change when you took a word like "include" and you 11:59:58 4 substituted a word like "exclude," which was the 12:00:01 5 opposite? 12:00:05 6 MR. GEYERMAN: Objection to form. 12:00:06 7 A In this particular situation -- 12:00:07 8 Q Any situation where you took a word that 12:00:09 9 meant something and then you took a word that meant 12:00:12 10 the opposite and substituted it in. 12:00:14 11 A Yes. 12:00:18 12 Q When was that? 12:00:18 13 A There are several occasions when we 12:00:19 14 negotiate risk contracts for medical providers. 12:00:25 15 Sometimes you include a service -- for example, in a 12:00:27 16 capitation -- that would pay them. Sometimes you 12:00:30 17 exclude it. 12:00:34 18 Q Sometimes you -- you include it for a number 12:00:36 19 of years and then you change your mind and decide to 12:00:37 20 exclude it? 12:00:39 21 A We usually change our decision based on some 12:00:40 22 relevant facts and data. 12:00:43 23 Q But if it was already excluded under your 12:00:44 24 prior interpretation, why would you change the 12:00:46 25 language? 12:00:50 PLANET DEPOS 888.433.3767 | WWW.PLANETDEPOS.COM 6 Transcript of Michael D. Reichardt Conducted on December 20, 2016 126 1 MR. GEYERMAN: Objection to form. 12:00:51 2 A Again, I wasn't part of the negotiations, so 12:00:51 3 the exact reason why I can't interpret. 12:00:54 4 But going back to my previous examples, 12:00:58 5 there might have been services that the hospital, 12:01:03 6 for example, did not offer but they built a new wing 12:01:05 7 and now they have an MRI or they have a cancer 12:01:08 8 center. And we include those services. 12:01:10 9 Q Okay. So the HSP was in place from 2008 to 12:01:15 10 2016; correct? 12:01:18 11 A That's my understanding. 12:01:20 12 Q And from 2008 through January 1st of 2015, 12:01:20 13 Optum had an understanding of what it -- of what its 12:01:26 14 contract and its definition of "U&C" meant; correct? 12:01:30 15 A I would believe so. 12:01:38 16 Q And their understanding was U&C doesn't -- 12:01:39 17 doesn't include HSP; right? That's their 12:01:42 18 understanding? 12:01:44 19 A Correct. 12:01:44 20 Q So there was no need to change the language? 12:01:45 21 They already had an understanding; correct? 12:01:52 22 MR. GEYERMAN: Objection to form. 12:01:58 23 A Again, not being part of the negotiations, 12:02:02 24 it's hard for me to say yes or no. But, again, 12:02:03 25 these definitions from time to time need to be 12:02:06 PLANET DEPOS 888.433.3767 | WWW.PLANETDEPOS.COM 6 Transcript of Michael D. Reichardt Conducted on December 20, 2016 137 1 that the HSP price was not the cash price; correct? 12:19:03 2 A Can you repeat the question again? 12:19:07 3 Q Sure. 12:19:30 4 Based on your declaration, Optum believed 12:19:32 5 that the HSP price was not the cash price; correct? 12:19:34 6 A That's correct. 12:19:37 7 Q Did CVS tell you that? 12:19:47 8 A Tell me personally or someone that worked 12:19:50 9 for the company? 12:20:00 10 Q Tell you or anybody at Optum. 12:20:01 11 A Given that I didn't negotiate the agreement, 12:20:06 12 I can't confirm or deny. 12:20:07 13 Q How is it that you're able to say in your 12:20:10 14 declaration what Optum believed about whether it was 12:20:15 15 appropriate for CVS to not report the HSP as the 12:20:18 16 cash price but, when I ask you a question about 12:20:26 17 that, you say "Well, I wasn't involved"? 12:20:31 18 How can you have an opinion in paragraph 9, 12:20:34 19 10, 11, and 12, and then say -- 12:20:37 20 A Were you asking me -- 12:20:37 21 Q -- "I wasn't involved"? 12:20:39 22 A Were you asking me to confirm or give my 12:20:41 23 opinion? 12:20:45 24 Q Are these opinions -- when you say in 12:20:45 25 paragraph 10 "Optum understands," is that your 12:20:49 PLANET DEPOS 888.433.3767 | WWW.PLANETDEPOS.COM 6 Transcript of Michael D. Reichardt Conducted on December 20, 2016 267 1 department. It's not to say that pharmacy analytics 16:28:00 2 or another team did. 16:28:03 3 Q That would be speculation on your behalf? 16:28:04 4 A Correct. 16:28:08 5 Q Now, during the years 2008 up until the time 16:28:08 6 you got to Catamaran in mid-January of 2015, you had 16:28:26 7 no role in interpreting any CVS, Catamaran, or Optum 16:28:32 8 contracts as it relates to the U&C; correct? 16:28:41 9 A That's correct. 16:28:43 10 Q So anything you know now about 16:28:44 11 interpretation during that time frame is secondhand 16:28:56 12 information you must have gotten from somebody else; 16:28:51 13 correct? 16:28:53 14 A That's correct. 16:28:54 15 Q And you're not testifying that, during 16:29:07 16 the years that 11.99 was the HSP price, that CVS 16:29:12 17 didn't routinely offer that same price to cash 16:29:18 18 customers who had no benefit? 16:29:23 19 A Can you paraphrase that one? 16:29:26 20 Q Yeah. 16:29:31 21 You're not giving an opinion today, during 16:29:33 22 the years that the HSP price was 11.99, during those 16:29:35 23 same years that CVS wasn't charging that same price 16:29:39 24 to people outside the program who had no benefit? 16:29:42 25 MR. HEENAN: Object to form. 16:29:48 PLANET DEPOS 888.433.3767 | WWW.PLANETDEPOS.COM 6 Transcript of Michael D. Reichardt Conducted on December 20, 2016 286 1 CERTIFICATE OF COURT REPORTER - NOTARY PUBLIC 2 3 I, Melanie L. Humphrey-Sonntag, Certified 4 Shorthand Reporter No. 084-004299, CSR, RDR, CRR, 5 CRC, FAPR, and a Notary Public in and for the County 6 of Kane, State of Illinois, the officer before whom 7 the foregoing deposition was taken, do hereby 8 certify that the foregoing transcript is a true and 9 correct record of the testimony given; that said 10 testimony was taken by me stenographically and 11 thereafter reduced to typewriting under my 12 direction; that reading and signing was not requested; 13 and that I am neither counsel for, related to, nor 14 employed by any of the parties to this case and have 15 no interest, financial or otherwise, in its outcome. 16 IN WITNESS WHEREOF, I have hereunto set my 17 hand and affixed my notarial seal this 2nd day of 18 January, 2017. 19 20 My commission expires: May 31, 2017 21 22 _____________________________ 23 Notary Public in and for the 24 State of Illinois 25 PLANET DEPOS 888.433.3767 | WWW.PLANETDEPOS.COM