Seniors' drug plans may be costing too much for Medicare

2013-03-22T00:00:00Z Seniors' drug plans may be costing too much for MedicareAlex Wayne Bloomberg News Arizona Daily Star
March 22, 2013 12:00 am  • 

WASHINGTON - Preferred-pharmacy plans that promise lower prices for people who agree to buy their prescription drugs from certain stores may be costing the Medicare program more money to support, pharmacists say.

While Medicare patients get reduced co-payments in the plans, offered by companies including UnitedHealth Group Inc. and Humana Inc., the insurers are shifting the burden of those discounts onto the federal government, according to an analysis Thursday by the National Community Pharmacists Association.

The agency that runs Medicare told insurers in a Feb. 15 letter that it has begun to scrutinize the costs of preferred pharmacies.

Medicare, which provides health coverage for the elderly and disabled, has been trying to reduce excess costs, with government audits this year uncovering $5.1 billion in overpayments to insurers and a similar amount spent on inadequate nursing home services. Preferred pharmacies in one UnitedHealth plan may cost as much as 10 percent more than other stores, the community pharmacists group said.

"These patients are giving up their choice of pharmacy and yet the overall costs are not any lower," B. Douglas Hoey, the Alexandria, Va.-based association's chief executive officer, said by telephone. The question of whether the plans shift costs to taxpayers "needs to be investigated," he said.

Four drugs commonly used by seniors, including generic versions of the cholesterol medicine Lipitor, cost Medicare about 9 percent to 10 percent more when customers used pharmacies in UnitedHealth's AARP Medicare Rx Preferred plan than at non-preferred stores, according to Hoey's analysis.

His group said it's raising the issue because independent pharmacies are typically shut out of preferred-store contracts as insurers rely on larger chains such as Walgreen Co. and Target Corp.

Medicare spent $67 billion in 2011 on its prescription drug benefit, known as Part D, according to the most recent report from the program's trustees. About 38 million people are expected to enroll in the drug plans this year.

UnitedHealth, the biggest U.S. medical insurer, said it meets regularly with the Centers for Medicare and Medicaid Services and the issue of pharmacy costs hasn't been raised.

Humana, the second-biggest private Medicare insurer, uses Walmart Stores as a preferred pharmacy. Alex Kepnes, a spokesman for Louisville, Ky.-based Humana, said the company wouldn't comment on the report.

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