Managed Care Matters

Health care costs are higher because of waste fraud and abuse. How much higher is a subject of debate, but common wisdom suspects we're paying hundreds of billions more each year than we should.

There are big frauds and abuses and small ones, but my bet is that together the small ones add up to more than all the big ones.

One example - pharmacy. CVS just settled a suit brought by CMS regarding alleged Medicaid fraud. The issue? There are two version of antacid ranitidine, a generic version of Zantac. The tablet form which is much cheaper than the capsule form. CVS allelgedly had a corporate policy of filling Medicaid scripts with the more expensive capsule form, a practice that, if true, would be a direct violation of the law.

While not admitting guilt, CVS did agree to pay the Feds and 15 states almost $37 million, and to stop the practice. The huge pharmacy chain refused to admit guilt, instead an exec gave the usual mumbo-jumbo. But their public comments are revealing - here's how it was reported in the Florida Sun-Sentinel (March 19)

In a statement, CVS Caremark said, "For many years, the company purchased and stocked the capsule form of ranitidine across its chain of retail stores for dispensing to all patients, not just Medicaid recipients, due to the fact that the acquisition cost of capsules was lower than the cost of tablets".

Reads like an admission that CVS knew darn well that the capsule version was generating a lot more profit.

What does this mean for you?

Private payers - check those NDC codes, and check 'em carefully. Chances are you're also paying for versions your docs didn't order.

Thanks to California HealthLine for the heads up.