Pharmacy Charging More Than Copay: The Real Cost

Pharmacy charging more than copay can be a real surprise, especially if you're not prepared. According to a recent study, nearly 75% of patients are unaware of the true cost of their medication.

This lack of transparency can lead to unexpected bills, which can be financially devastating for many individuals. One patient, for example, was charged over $1,000 for a medication that was supposed to cost only $50.

The copay system is designed to make healthcare more affordable, but it often hides the true cost of medication. A closer look at the copay system reveals that it can be a complex and misleading system.

Some pharmacies are taking advantage of this system, charging patients more than the copay amount. In one case, a patient was charged $150 for a medication that was supposed to cost only $20.

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Pharmacies collect copayments from patients and pass them to Pharmacy Benefit Managers (PBMs), who then reimburse the pharmacy a negotiated rate to cover drug costs, dispensing fees, and any markup.

The study used data from a survey by the Centers for Medicare & Medicaid Services, which was published for six months beginning in January 2013, to determine the national average reimbursement received by pharmacies for commercially insured patients.

The survey, authorized in the Deficit Reduction Act of 2005, measured per-unit mean reimbursement to retail pharmacies for over 4,000 common outpatient drugs, representing the total cost to the PBM, including dispensing fees and pharmacy markup.

The study's copayment data came from a 25 percent random sample of Optum Clinformatics Data Mart pharmacy claims from commercially insured patients in the first half of 2013, representing 9.5 million prescriptions filled by 1.6 million subscribers.

Reviewing past health care copay rates is essential to understand the changes over time.

The rates for 2024 are effective as of January 1, 2024.

You can also look back at the rates from 2023, which were effective on January 1, 2023.

The 2022 rates were in effect from January 1, 2022.

The rates for 2021 were effective on January 1, 2021.

The 2020 rates were in place from January 1, 2020.

In this study, pharmacies collect patients' copayments and pass them to PBMs, who then reimburse the pharmacy a negotiated rate to cover drug costs, dispensing fees, and any markup.

The researchers used data from a survey by the Centers for Medicare & Medicaid Services, which was published for six months beginning in January 2013. This survey is authorized in the Deficit Reduction Act of 2005, which aimed to reduce spending on mandatory programs like Medicaid.

Over 50 million retail pharmacy transactions from independent and chain pharmacies nationwide were used to calculate the national average reimbursement to retail pharmacies for commercially insured patients.

The researchers also used a 25 percent random sample of Optum Clinformatics Data Mart pharmacy claims from commercially insured patients in the first half of 2013. These data represent 9.5 million prescriptions filled by 1.6 million subscribers.

To identify overpayments, the researchers compared the copayment on each claim to the NARP reimbursement on the same NDC for customers with commercial third-party insurance in the quarter when the claim was filled.

Twenty-three percent of all pharmacy claims involved an overpayment. This means that nearly a quarter of the time, you're paying more than you need to for your prescription.

The overpayment rate for generic drug claims was significantly larger than for brand drug claims, at 28.17% vs. 5.95%. This is a huge difference, and it's worth paying attention to which type of medication you're prescribed.

Among claims with an overpayment, the mean overpayment size was $7.69. This is the average amount that people are being overcharged, and it's a significant amount of money.

For the most commonly prescribed drugs, nine involved overpayments more than 40 percent of the time. This is a staggering statistic, and it highlights the need for vigilance when it comes to pharmacy billing.

The average dollar value of the overpayment, when one existed, ranged from $5.94 on sertraline hydrochloride to $19.95 on Ventolin HFA. This is a huge variation, and it's worth checking your bills to see if you're being overcharged.

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For sixteen of the 20 most commonly prescribed drugs, the size of the average overpayment was more than 50 percent of the NARP reimbursement for the drug. This is a huge problem, and it's not just a matter of a few dollars here and there.

The top drug, zolpidem tartrate, involved an overpayment 60.5 percent of the time. This is an alarming statistic, and it suggests that there may be a systemic problem with pharmacy billing.

Sixty percent of all overpayments were worth $5 or more. This is a significant amount of money, and it's worth paying attention to your pharmacy bills to make sure you're not being overcharged.

Pharmacy charging more than copay can be a significant financial burden for many people.

According to a study, nearly 75% of prescriptions have a copay of $10 or less. However, the out-of-pocket cost can be significantly higher due to various factors.

Pharmacies often charge more than the copay because of the markups on prescription medications. In some cases, the markups can be as high as 1,000%. For example, a study found that a pharmacy charged $1,000 for a medication that cost the pharmacy $10.

The high markups can be attributed to the pharmacy benefit manager (PBM) model, which allows pharmacies to charge higher prices for medications. This model can result in patients paying more for their prescriptions.

In some cases, patients may be able to negotiate the price of their medication with the pharmacy. However, this is not always possible and may not result in significant savings.

The high costs of prescription medications can have a significant impact on patients' financial well-being. In fact, a study found that nearly 25% of patients have to choose between paying for their medication or paying for other essential expenses.

Every little bit counts, especially for seniors taking multiple medications every day and living on fixed incomes. That's because paying an extra few dollars may not seem like much at first, but it can add up quickly.

Four common medications - simvastatin, a cholesterol medication; amlodipine, for high blood pressure; the steroid prednisone; and a sleep medicine called zolpidem tartrate - were involved in overcharges more than half of the time.

At least half a dozen states have already adopted laws to address some aspects of gag clauses or claw-back provisions in pharmacy contracts.

Several major health insurance providers are under investigation for allegedly overcharging customers for prescription drugs. Cigna, UnitedHealthcare, Humana Inc., Aetna, and Kaiser are the companies in question.

These insurance providers may have charged customers more than their copay for prescription drugs. If you're insured by one of these companies, it's a good idea to review your statements to see if you've been overcharged.

A recent investigation by Fox 8 New Orleans found that these insurance providers may have been overcharging customers. It's essential to be aware of any potential overcharging to ensure you're not paying more than you should.

Here are the insurance providers under investigation:

Overcharges can be significant, with some insurers charging customers up to several times the cash price of the same medicine. For example, a $270 copay for a nausea drug could have been purchased for just $15 without insurance.

To measure overcharges, researchers applied a method to Medicare Part D claims and found that only 3.3 percent of claims involved an overpayment. This suggests that overpayments may be less common in Medicare claims compared to commercial claims.

Pharmacists have a term for this practice – "clawback" – which refers to when an insurer pays a pharmacy less than the copay charged to the customer. In some cases, this can result in a significant overcharge, such as the $38.35 overcharge for a $50 copay on a $11.65 medication.

To mitigate overcharges, customers can take a few steps. They can contact their pharmacist to ask whether they're receiving the "retail price" or "lowest price." Some private websites, like LowestMed.com and GoodRX.com, also allow customers to check prescription prices at pharmacies in their area.

Consumers can also look up the National Average Drug Acquisition Cost on Medicaid.gov to compare prices and detect potential overcharges. By taking these steps, customers can better understand their pharmacy bills and avoid overpaying for their medications.

Additional reading: Copay on Medicare

Pharmacists call it a "clawback" when insurance companies overcharge customers by charging a copay that's several times the cash price of the medicine.

You might be surprised to learn that certain insurers are intentionally overcharging their customers in this way. This practice is known as a "clawback", and it's a significant issue in the healthcare industry.

To check your costs, you can start by comparing the copay you're being charged to the cash price of the same medicine. For example, WAVE 3 News reported that a pharmacist in the Northeast was required to charge a customer a $270 copay for a nausea drug, but the insurer only paid the pharmacy $4.50 for the same medication. The insurer received $265 as a "clawback", which is a significant overcharge.

Here are some examples of how much you might be overpaying:

Keep in mind that these prices are just examples, and the actual costs may vary depending on your location and insurance plan. However, it's clear that in some cases, customers are being overcharged significantly.

By checking your costs and comparing the copay you're being charged to the cash price of the medicine, you can make more informed decisions about your healthcare and potentially save money.