Drug plan pay system leaves user in quandry
In early March, Ruth Chandler bought a one-month, 60-pill supply version of the cold sore medicine Acyclovir. Since Chandler was enrolled in a Medicare drug plan, she was charged only a $5 co-pay. Her insurance plan, Keystone 65, paid $8.20.
Chandler was pleased that the medicine she bought from Eckerd was working. And she was comfortable with the expense since she needed to avoid what is known as the "doughnut hole" -- the point at which annual expenses for a single consumer reach $2,250, and Medicare often stops paying until the costs reach $5,100.
On March 20, Chandler mail-ordered a three-month, 180-pill supply of the generic form of Acyclovir from Caremark. She again was charged a $5 co-pay.
She figured that the Caremark charge toward her insurance would be no more than triple the Eckerd charge since she bought three times the number of pills. She expected a charge of $24 or $25. She was stunned when her statement showed a charge of $140.98.
"What right does Caremark have to charge so much more for the medicine than Eckerd?" Chandler said. "I thought it would be cheaper since I was buying it in bulk and through the mail."
But what most troubled the 66-year-old was that she is unable to determine how much her plan is being charged before she buys medicine. Insurance companies and pharmacies are under contracts that prohibit them from disclosing the amount in advance of purchases.
"You should be allowed to know how much you paid for it," said Chandler, who lives in Kennett Square, Pa. "You should know what's going to be charged to your Medicare plan every time you pay."
Chandler discovered something about the federal prescription drug benefit that is unknown to many.
Insurance companies and pharmacies are obligated under contracts to refrain from disclosing the cost up front. The Centers for Medicare and Medicaid Services does not have oversight over that issue and that kind of contract is not illegal in Delaware, said Insurance Commissioner Matt Denn.
"Under a normal insurance plan it's not an issue because there's no cap," he said. "There's no state law that prohibits it. But in this situation, something obviously needs to be done to let seniors make more informed purchases."
Making calls
Once Chandler received her bill statement, she began calling pharmacies to find out how much they would have charged her plan. Keystone 65 is run by Independence Blue Cross, located in Philadelphia.
Chandler called Eckerd, Happy Harry's, CVS, Acme and Giant.
But none of the pharmacists knew what Independence Blue Cross was being charged. The negotiated price between pharmacies and Independence Blue Cross is not displayed when patients buy medicine.
Keystone 65 is not alone. Charges also are not revealed to people in other insurance plans.
That means Chandler can't check prices ahead of time to avoid falling into the coverage gap.
Almost 47,000 people in Delaware are enrolled in such drug plans, according to the Centers for Medicare and Medicaid Services.
"It makes me wonder about the rest of the drugs I take," Chandler said. "How come I can't know if there's a place where I can get my medicine that will charge my insurance less? The whole idea is that you don't want to go into that doughnut hole any sooner than you have to."
Confidential information
Emilio Ruocco, spokesman for Caremark, a Nashville-based pharmacy benefits manager for Independence Blue Cross, said details of Caremark's contract with Independence Blue Cross are confidential.
Such a disparity in prices for the same medicine is atypical. Caremark had bought the generic form of Acyclovir for a higher price during negotiations compared to what Eckerd paid for it, Ruocco said.
"Our real acquisition cost may result in a drug costing more in the mail than it would at someplace else," he said.
Ruocco said there is no way for the patient to find out the charge to the insurance company ahead of time.
Even on www.medicare.gov, the site where potential clients can compare benefit plans, senior citizens are unable to ascertain how much each pharmacy is charging an insurance plan for the same medicine, said Lorraine Ryan, spokeswoman for the Centers for Medicare and Medicaid Services.
Once Chandler discovered the cost disparity, she filed a grievance with both the Centers for Medicare and Medicaid Services and Independence Blue Cross. On June 9, she heard from a Independence Blue Cross representative, who told her that she would not be reimbursed for the difference in the Caremark charge.
She also received a letter from Independence Blue Cross.
"Please be advised that a retail pharmacy can not give you the price of a prescription with out completing the full transaction of processing the claim," the letter said. "Please accept our apologies for any inconvenience this may have caused you."
Chandler doesn't think that's right.
"You should be able to go to anybody and find out how much it costs," she said, "even if it's not out of your pocket directly at the moment."
THE PROBLEM
Insurance companies and pharmacies are obligated under contracts to refrain from disclosing the cost upfront. The Centers for Medicare and Medicaid Services does not have oversight over that issue and that kind of contract is not illegal in Delaware, said Insurance Commissioner Matt Denn.
ONE PERSON’S COSTS
Ruth Chandler’s different charges for the same medicine:
posted by Kathie Bracy at 11:56 AM
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