Case Flash: Getting Coverage of Outpatient Prescription Drugs
at the Hospital Pharmacy

In September, Mr. Y went to the emergency room because he thought he was having a heart attack. It turned out to be a bad case of heartburn, and Mr. Y was able to go home the same day. However, while he was in the hospital, he needed to take a dose of Prednisone, which he takes regularly to manage his arthritis. Because in his hurry he had not brought his prescription with him, Mr. Y was told that he would need to buy his pill at the hospital pharmacy. Mr. Y bought one pill of Prednisone at the hospital pharmacy for $30.75. That was more than he would normally pay through his Medicare Part D prescription drug plan for a full month’s prescription at his regular pharmacy.

Mr. Y paid for his Prednisone pill, but did not understand why it was so expensive. He called the Medicare Rights Center’s national hotline for help. The hotline counselor explained that because Mr. Y was admitted as an outpatient, Part B covered the medical care that he received in the emergency room. However, any drugs he took on his own (self-administered) to treat conditions unrelated to the hospital visit—like the Prednisone for his arthritis—would need to be covered under Part D. Because the hospital pharmacy was not in Mr. Y’s Part D plan’s pharmacy network, he was charged the hospital’s full price for the medication rather than the low Part D copayment he was used to paying at his own pharmacy.

However, the counselor told Mr. Y that he could still argue that his Part D plan should pay for the drug. In an emergency, Part D plans will cover you to get your prescription at an out-of-network pharmacy if you can show that you could not reasonably obtain the medication from a network pharmacy and you do not routinely use out-of-network pharmacies. It should be noted, however, that a Part D plan is only required to reimburse you for the amount the plan usually pays, so you may be responsible for the difference between what the plan pays and what the out-of-network pharmacy charges. This means that if you buy a drug from an out-of-network pharmacy, you will most likely receive a reimbursement from a Part D plan that is less than what you paid out of pocket for the drug.

Since Mr. Y was in the hospital when he needed his drug, he could not be reasonably expected to go to a network pharmacy, and Mr. Y does not normally fill his prescriptions at out-of-network pharmacies. The hotline counselor suggested that Mr. Y submit his receipt for reimbursement with a letter explaining the situation. The counselor warned that the plan could still charge Mr. Y more for using an out-of-network pharmacy (the difference between the hospital’s price and the plan’s allowance for the drug) but that he would likely receive at least some compensation. Mr. Y received a reimbursement, but it was significantly less than what he paid at the hospital for the drug.

-Adapted from “Case Flash: Getting Coverage Of Outpatient Prescription Drugs At The Hospital Pharmacy”, MEDICARE WATCH, a biweekly electronic newsletter of the Medicare Rights Center, Vol. 12 , No. 12: June 16, 2009.

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