Whitehall Pharmacy, doing business as Doctor’s Orders Pharmacy, has filed Chapter 11 reorganization in U.S. Bankruptcy Court for the Eastern District of Arkansas-Central Division.
Lelan Stice, CEO of Whitehall Pharmacy, announced that the filing took place Monday, adding it was necessary to allow the company to continue to operate and serve 90,000 clients in Central Arkansas. He said Chapter 11 does not change Doctor’s Orders’ hours or service at its five locations in Star City, Pine Bluff, White Hall and Sherwood.
The filing, Stice said, was caused by litigation between the pharmacy and Jefferson Regional Medical Center. Jefferson Regional, under its parent name Jefferson Hospital Association, sued the pharmacy in 11th West Circuit Court in May 2023, accusing it of failure to pay 24 total invoices issued on Jefferson Regional’s behalf to the pharmacy between July 1, 2022, and March 24, 2023. The hospital said in the lawsuit it was due $1,021,027.
“Whitehall Pharmacy was facing a large litigation risk and expenses to dispute the claims for reimbursement by Jefferson Regional Medical Center,” Stice said in a Thursday news release. “Litigation caused the Chapter 11 reorganization filing. The pharmacy is current with all its obligations and is in compliance with all healthcare regulations. The pharmacy disputes the claims by JRMC. The Pharmacy will continue to operate and provide services for its clients.”
Pharmacy attorney Skip Davidson said Chapter 11 reorganization allows a company to operate “in the ordinary course of business” while dealing with disputed claims in bankruptcy court.
Independent reporting for Pine Bluff & Jefferson County since 1879.
“Chapter 11 protects everyone, including clients, vendors, employees and unsecured claims like Jefferson Regional Medical Center,” he said.
An exhibit in the lawsuit reveals both Doctor’s Orders and Jefferson Regional signed a 340B contract in October 2019. The 340B Program allows the hospital to participate in a federal drug discount program established under Section 340B of the federal Public Health Service Act. It contracted Doctor’s Orders to serve patients eligible to receive 340B-discounted drugs.
The agreement obligated Doctor’s Orders to bill all third-party insurers and collect all copays for 340B drugs the hospital purchased, according to the lawsuit. The hospital adds the pharmacy agreed to remit to Jefferson Regional the total amount it received for the distribution of drugs to patients under the program, to be invoiced by the hospital, and all invoiced amounts more than 30 days past due would be subject to 1.5% interest per month.
As of May 2, 2023, according to the lawsuit, the pharmacy owed $62,961 in interest on past due invoices with $503.52 of interest continuing to accrue each additional day.
Jefferson Regional said it terminated the agreement with Doctor’s Orders on Feb. 10, 2023. It seeks $1,083,988 in damages, including the past-due amount and the accumulated interest, as well as all interest continuing to accrue, costs and expenses incurred in the suit.
The case went to mediation on July 2 of this year, but mediator Frank Hamlin determined it unsuccessful, according to online court records. Second Division Circuit Judge Rob Wyatt denied the hospital’s request for a summary judgment on July 16.
The hospital is represented by Mitchell, Williams, Selig, Gates & Woodyard PLLC.