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Patients Overpay for Prescriptions 23% of the Time

A new study released by the University of Southern California found that the 1.9 million people that filled 9.5 million prescriptions in the first 6 months of 2013 overpaid for those prescriptions 23% of the time for a total of $135 million in overpayments.

Turns out, their copay was higher than the full cost of the drug. Referred to as a "clawback", the middlemen that handle drug claims essentially "claw back" the difference between the higher copay and the lower cost of the drug from the retail drug store. 

Although the amount per prescription that is clawed-back is often small, the frequency with which this happens results in significant overpayments. Clawbacks on generic drugs averaged $7.32 and were $13.46 on brand-name drugs.

Patients aren't often told they could pay less if they don't use their insurance.

Some insurance companies actually prohibit pharmacists from telling paitents. On March 14, bi-partisan federal legislation was introduced to ban "gag clauses" prohibiting pharmacists from informing patients they could save money if they paid in cash. Several states have already passed legislation to rein in clawbacks and prohibit gag clauses.

There has been increased legal activity around clawbacks and gag clauses in recent years with cases against UnitedHealth, Cigna, Humana, and OptumRX. This month, a federal judge allowed a proposed class action law suit against Cigna to proceed.

Employers should review their health plan and PBM contracts to determine how these types of overpayments are handled. Gregory I. Madsen of Innovative Rx Strategies recommends that employers include "the lowest of" language to ensure that their employees pay the lowest of the discounted ingredient cost, the pharmacy's usual & customary, or the co-pay, and not just automatically the co-pay.

Information for this article was provided by Bloomberg NewsCFO Daily News, and Kaiser Health News.

Posted by Cristie Travis at 3:00 PM

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