UnitedHealthcare says it will stop overcharging some customers for prescription drugs. But experts warn the company will find another way to make up the money - at your expense. When one revenue stream is closed off a non-fiduciary PBM will look to make up for that lost revenue by employing or increasing other hidden cash flows. That is ballooning; watch below.
If you've held a 15-minute introductory phone conversation with me then you're aware of the hidden cash flow tactic referred to as clawbacks.
Our "Medical Waste" investigative series showed how United, the nation's largest health insurer, and Optum, its pharmacy benefit manager, overcharged some customers for prescription medication. The practice forced many customers to pay a copay that's higher than the cost of the drug. United then claws back the extra money from the pharmacist. Optum labeled it an "overpayment program."
"The hand in the cookie jar has been caught," says Doug Hoey of the National Community Pharmacists Association. "There's an old saying that sunlight is the best disinfectant. And I think some sunlight has been poured into their situation, and they're trying to make the best of it. "
United sent us this statement:
"We have reviewed our pharmacy benefits and will update our plans to ensure UnitedHealthcare members pay the lowest price at the pharmacy."
When we asked if this meant United plans to eliminate the "overpayment program" that forced customers to unknowingly overpay for prescriptions, United responded:
"Once fully insured customers move to the updated benefit plans, our members will pay the lowest price at the pharmacy and the repayment program will no longer be necessary."
Tyrone's comment: Wait, what about self-funded employers? Self-funded employers should be checking to verify these overpayments aren't occurring within their plans. Higher OOP (out-of-pocket) expenses for patients leads to non-adherence which ultimately means increased hospital or physician costs.
"They would never say that they are doing something they shouldn't be doing," Hoey says. "But the fact that they're changing their practices… to me, that's an admission that they were over the line."
We kept peppering United with questions, asking if the updated plan will increase premiums. In other words, does United plan to cover the losses they'll see on prescription drugs with an increase in premiums? They told us details are being worked out.
We asked how the change would impact members, when it would happen and, again, whether members will see a premium increase. Again, there was no clear answer from United.
"I think they're realizing that this is wrong, that there's a huge liability here, whether fraud or illegal," says insurance fraud investigator Susan Hayes. "But it's definitely wrong and I think they realize it."
Hayes says these changes will only impact some United customers. You may not realize it, but United offers two types of plans to most businesses: one a fully insured plan, the other a self-funded plan. Large companies may take part in a self-funded plan in which the employer pays all of the costs, like part of the copays, and United simply manages the program.
In a fully insured plan, usually for smaller- to mid-size businesses, United takes the risk - it pays the copays and charges the employer a fee. According to the United email and Hayes' interpretation, the change will only take place for fully insured customers - most likely employees of smaller to mid-size companies.
Hayes tells us United may simply raise premiums on these fully insured plans. She says self-funded plans and customers should be asking United questions.
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