IUOE News December 2014

Benefits and Pension Plan Report
Exploring the ins and
outs of drug claim
reimbursement
Shawn Hatch,
Administrator
The Operating Engineers Benefits Plan covers the cost of
prescription drugs based on the following reimbursement
formula*:
• 80% up to $1,500.00 per family per year
• After $1,500.00 has been paid, reimbursement reduces to
30%
(*subject to two-year maximum of $20,000.00 for all claims)
Since the introduction of the Pacific Blue Cross Drug Card,
many members are claiming more frequently. As a result,
some members are reaching the 30% threshold for the first
time. It is important to remember that the 30% threshold is
not a new rule. It has been in place for many years.
Some members are also experiencing reimbursement levels
which do not match our 80%/30% reimbursement formula
exactly.
These variances are usually due to the fact that the member’s
pharmacy is charging a dispensing fee greater than the pharmacare
maximum of $10.00, or is charging a manufacturer’s
markup greater than the pharmacare maximum of 8%.
If a pharmacy is charging in excess of these maximum
levels, the member will bear the extra cost resulting in an
overall level of reimbursement which is less than the 80%/30%
formula.
For example, if a member purchases a drug with a
wholesale price of $100.00 at a pharmacy that applies a 15%
markup and a $15.00 dispensing fee, the total charge to the
member will be $130, and 80% of $130.00 is $104.00.
However, on this example the member will not receive
$104.00. When the manufacturer’s markup and dispensing
fee limits are applied, reimbursement will be $94.40 calculated
as follows:
• Wholesale Price $100.00
• Allowable Manufacturers Markup Of 8% $8.00
• Allowable Dispensing Fee $10.00
• Total Eligible Expense $118.00
• Reimbursement At 80% $94.40
Members can shop and compare the price of prescription
drugs by visiting www.pharmacycompass.com. This web site
will enable you to compare the cost of your prescriptions at a
number of different pharmacies in your area.
If you are not sure whether a particular drug is covered by
the plan, visit www.pac.bluecross.ca where you can search the
status of a particular drug in the “Drug Lookup” box. Information
is also available by phone at 604-419-2600.
Fair Pharmacare information can be obtained at www.
health.gov.bc.ca/pharmacare including information on
whether your drug is covered by pharmacare. Information is
also available by phone at (Metro Vancouver) 604-683-7151,
or toll free at 1-800-663-7100.
In closing, we would urge members to purchase generic
alternative drugs whenever medically appropriate. We have
been advised that in over 98% of cases low cost alternative
drugs are medically appropriate.
The cost savings to the plan can be significant. It is estimated
that in 2013 drug costs for our plan could have been
$300,000.00 less if members had purchased low cost alternative
drugs instead of the brand name. Help us help you by
controlling costs wherever possible.
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18 News December 2014