Discount Drug Plans for May Not Be Saving Medicare Money

http://www.bloomberg.com/news/2013-03-21/discount-drug-plans-for-may-not-be-saving-medicare-money.html

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

While Medicare patients get reduced co-payments in the plans, offered by companies including UnitedHealth Group Inc. (UNH) and Humana Inc. (HUM), the insurers are shifting the burden of those discounts onto the federal government, according to an analysis today 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, Virginia-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.