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CVS Charges more for Drugs Paid for With Insurance, Than Cash-- Lawsuit Claims

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posted on Aug, 10 2017 @ 10:49 AM
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This is a somewhat complicated story-But it boils down to money or overcharging insurance paying customers and kicking money back to the pharmacy benefit managers (PBM's) to give CVS more insurance paying customers.

The old pharmacy benefit managers are in the middle of another questionable story, this time with CVS.

Ut oh, CVS charged more to an insurance holding customer than they would have charged a cash paying customer, or so the allegations go.


A California woman is suing CVS, the largest pharmacy chain in America, for allegedly charging more to customers who use insurance to pay for certain generic prescriptions.

The lawsuit, filed on Monday, accuses CVS Health Corporation of participating in a "fraudulent scheme" and claims the plaintiff, Megan Schultz, paid $165.68 for a prescription in July that, had she bought without using insurance, would have only cost $92.
www.nbcnews.com...

The allegations state that the pharmacies kick the co-pays to the pharmacy benefit managers (PBM's are another middle man in the system) who negotiate prices that the insurance companies pay the pharmacies. This system incentivizes CVS to offer the PBM's a portion of their sales so they can get more clients (pharma using customers). So it the PBM's jack up prices CVS wins and then they kick some sweet sweet $$$ back to the PBM's. Cool huh?


The problem, it alleges, is with co-pays sent back to pharmacy benefit managers, or PBMs — the intermediary between insurance companies and pharmacies who negotiate the prices that insurance companies have to pay the pharmacies. PBMs control which pharmacies are in-network for the insurers, incentivizing CVS to offer them a portion of their sales so they can get more clients.
But consumers picking up prescriptions at their neighborhood CVS are blind to that. The agreements between CVS and the PBMs are based on confidential contracts, meaning the "consumer pays the amount negotiated between the PBM and CVS even if that amount exceeds the price of the drug without insurance," the suit says.
As a result, it continues, CVS can overcharge unknowing costumers by collecting co-pays that exceed the pharmacists' price and then remit the excess payment back to the PBMs in what's known as "clawback" payments.


Oh no we didn't, CVS denies any wrong doing and work hard, so hard to offer the lowest out of pocket costs to the "customers". And of course CVS claims there is no kick backs, or clawbacks as they are called in the story, to the PBM's.


CVS denied the allegations, responding in a statement that they "are built on a false premise and are completely without merit."

"Co-pays for prescription medications are determined by a patient’s prescription coverage plan, not by the pharmacy. Pharmacies collect the co-pays that are set by the coverage plans. Our pharmacists work hard to help patients obtain the lowest out-of-pocket cost available for their prescriptions. Also, our PBM CVS Caremark does not engage in the practice of co-pay clawbacks. CVS has not overcharged patients for prescription co-pays, and we will vigorously defend against these baseless allegations," the Woonsocket, Rhode Island-based pharmacy chain said.




edit on 10-8-2017 by seasonal because: (no reason given)




posted on Aug, 10 2017 @ 10:59 AM
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Somebody has to pay the middle man his cut. The pink elephant in the room is that the insurance companies are the true middle men.

Easy solution. Get rid of the insurance companies and the problem is solved.



posted on Aug, 10 2017 @ 10:59 AM
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DP

Which I knew why these keep happening.
edit on 10-8-2017 by NightSkyeB4Dawn because: (no reason given)



posted on Aug, 10 2017 @ 11:00 AM
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a reply to: seasonal

This is of no surprise.

The entire medical industry does this.

I've seen that they have 3 prices. One price for insurance another for the government insurance and a third for uninsured.



posted on Aug, 10 2017 @ 11:00 AM
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a reply to: seasonal

I can see charging more for insurance vs cash. Paperwork and followup is not free. It's also why Doctor's charge more. Filling out Government or insurance forms are a pain in the butt for business even with computer help. One little mistake and they deny your payment.



posted on Aug, 10 2017 @ 11:02 AM
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a reply to: grey580

Nope CVS says they work hard to give it's customer the lowest OUT OF POCKET costs.

Ah word play, I do not like hearing word play with medical coverage or medical supply companies.



posted on Aug, 10 2017 @ 11:04 AM
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a reply to: NightSkyeB4Dawn


I have found that I hit reply too many times and it does a multiple post or double post. Only hit reply once.



posted on Aug, 10 2017 @ 11:05 AM
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a reply to: grey580

The pharmacy sets the price for uninsured based on cost. In small pharmacies like mine, we try to make the meds as cost effective as possible for those without insurance.

Say I see the insurance setting a ridiculous copay for a med that is cheap, I ALWAYS ask the customer if they would like the cash price. Sometimes they say yes, others say no because they want it to be applied to their deductible or doughnut hole gap in coverage.



posted on Aug, 10 2017 @ 11:05 AM
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a reply to: Bramble Iceshimmer

This was way past a small charge for the paperwork. And if you do this millions of times a month, that is HUGE $$$$.



posted on Aug, 10 2017 @ 11:11 AM
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The gas station's the street charges more if you use a credit card than if you pay cash.
Know why? Because the bank charges them for every credit card transaction. They then charge credit card customers more to cover that.
Filing insurance paperwork requires man hours. Those people don't work for free. So the pharmacy charges more for that.



posted on Aug, 10 2017 @ 11:12 AM
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a reply to: Sillyolme

This was way past a small charge for the paperwork. And if you do this millions of times a month, that is HUGE $$$$.



posted on Aug, 10 2017 @ 11:17 AM
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a reply to: seasonal

Millions of times a month would still be one transaction at a time and they still need to pay an employee to file that paperwork . So no there's still no profit. Doing it a million times and filing a million insurance claims keeps it pretty equal.



posted on Aug, 10 2017 @ 11:17 AM
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None of this would be a problem with Universal Health Care.



posted on Aug, 10 2017 @ 11:18 AM
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Please read the story.


The lawsuit, filed on Monday, accuses CVS Health Corporation of participating in a "fraudulent scheme" and claims the plaintiff, Megan Schultz, paid $165.68 for a prescription in July that, had she bought without using insurance, would have only cost $92.
a reply to: Sillyolmewww.nbcnews.com...



posted on Aug, 10 2017 @ 11:20 AM
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a reply to: seasonal
That is just it. No double clicks.

It used to happen when there was a delay in the transmission, and I would get that gray screen showing the posting process. Now it happens so fast that I don't get to see the gray screen, it seems the posting is seamless, and fast, but presto change-o, two post.



posted on Aug, 10 2017 @ 11:23 AM
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a reply to: Krazysh0t

Very good observation. CVS is NOT in favor of universal health care.

UHC will drive costs down to a level that would be close to other industrialized countries. This means less $$ for the system that has it's jack boot on the consumers neck.

UHC can't happen. In the US we pay the most for health care (by far) and we are #37 in health outcomes. Very sad, and the repubs just reinforced the monopoly that is in plain sight.
edit on 10-8-2017 by seasonal because: (no reason given)



posted on Aug, 10 2017 @ 11:24 AM
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Looks like another "Banker's Paradox" is exposed.




posted on Aug, 10 2017 @ 11:24 AM
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a reply to: NightSkyeB4Dawn

don't know then.



posted on Aug, 10 2017 @ 11:26 AM
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I ran a retail business for years. Every expense has to come off the bottom line.
My accounting dept had to provide the profit and loss on every transaction.
What a rug costs, how much to get it to my warehouse, how much I paid the warehouse men to handle it's receipt and its eventual delivery to my customers. Everything went into how much I was going to charge for that rug. Or lamp or side table. So if I had to pay extra for special handling that cost went into the price of the item.
I didn't worry about the 2% the bank charged me for credit card transactions because I maintained a 30% markup on most items anyway. I shot for 45% but when you deal in high end furnishings you have to be able to negotiate lol.



posted on Aug, 10 2017 @ 11:26 AM
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a reply to: annoyedpharmacist

I have several medications that my doctor gives me prescriptions for that I buy over the counter (OTC). Even when I have to take twice as many of the OTC meds, to equal the prescribed dose, it still is much cheaper for me than paying the prescription cost.



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