Medical Waste: Medicare charged hundreds more than drug’s cost at cash value

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GONZALES, La. (WVUE) - Two Louisiana men -- one a patient, and the other a pharmacist -- said they found medical waste that is costing every taxpayer in the country.

Source: Tom Varco / CC BY-SA 3.0 / MGN

Joel Siedel’s wife, Dianne, is battling amyotrophic lateral sclerosis, or ALS. Doctors prescribed her a drug called Riluzole.

“It’s supposed to slow down the progression of ALS,” Siedel said.

For the first six months of the year, Siedel ordered his wife’s medication through the mail via CVS/Caremark.

“There was no copay,” Siedel said.

But when he looked over his explanation of benefits, or EOB online, a number jumped out at him.

“How do you justify that?” he asked.

While Siedel paid nothing, the 90-day supply of the medication cost their insurance plan $1,700. Their insurance is provided through Medicare, which is funded by taxpayers.

Siedel drove to an independent pharmacy in Gonzales and found a startling difference. The same drug there was available for $170.

“It’s all about the money, It really is. There’s no reason this should be happening,” Chris Dupre, a pharmacist in Gonzales, said. “They were charging ten times plus to insurance, Medicare Part D, funded by taxpayer money.”

There were also hidden costs in the Siedel’s medication since the government structures payments in the Medicare program. While initially, patients pay little to no copay, when the total cost of medication reaches $3,820, the patient hits what is referred to as the “Donut Hole" where they pay more money for prescriptions.

Each 90-day supply of that ALS drug for the Siedels cost the Medicare plan $1,700. So after six months, that drug alone would count for $3,430.50. Once they hit $3,820, more comes out of their pocket. Other medications for the Siedels easily pushed them into the “Donut Hole” in March of 2019.

“I feel like she got ripped off," Siedel said.

“I call it excessive profiteering because that’s what it is,” Dupre said.

Dupre has been a pharmacist for 25 years and said there’s little the taxpayer can do about it because of safe harbor protection laws passed by Congress that limit the scope of what these companies are forced to share on prices and costs.

“It’s illegal to find out if they’re doing anything illegal,” Dupre said.

Siedel said he has probably used the CVS mail-order service for the last time, instead opting for companies that are more transparent in their pricing.

In response to this story, CVS/Caremark told by email:

The ALS medication is covered by the patient’s Medicare Part D plan, for which CVS Caremark is the PBM, and the patient’s plan provides an option to receive the medicine through mail order in addition to getting a medication filled at retail pharmacies. The patient’s plan has a zero dollar co-pay when using CVS Caremark mail order and up to a $30 copay at any participating retail pharmacy for a 90-day supply for this drug. Plan members can choose whether to use a mail-order or a retail pharmacy, and it’s unclear why this patient switched from mail to retail, which incurred an additional co-pay cost.

CVS also blamed the pharmacy for the difference in price, writing:

Our reimbursement to pharmacies for this medication is an accurate reflection of its cost in the market. Based on our records of the transaction and our conversation with the pharmacist, the pharmacy first submitted a price that was about 10 times more than the cost, realized the error and resubmitted a claim about 10 times lower than the cost. In both cases, the pharmacy acknowledged to us that the information they input was incorrect. We will work with this pharmacy to correct the claim so that they are reimbursed appropriately.

But Chris Dupre said, “If I charge less, that’s my prerogative as a pharmacist and businessman.” He added, “We didn’t make an error, but instead corrected the amount to what we normally charge.”

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