When CVS discovered that prices listed for brand-name drugs on its SilverScript Medicare site were mistakenly displayed at about 4% less than the drugs were actually being sold for, the company quickly fixed the glitch, according to a report in today’s Wall Street Journal. But what happened to customers who saw the “low” prices and ended up paying more at retail? According to The Journal, CVS cut a deal with the government, allowing the company to offer refunds only to customers who asked for them. CVS then sent letters to the customers that said they could call and discuss “your options,” and made no mention of the possibility of a refund.

According to the Journal, a computer error caused CVS to provide inaccurate prices to SilverScript’s site, as well as the government’s Medicare site and other sources for Medicare information. The incorrect information was online from October 8, 2009 through January 8, 2010. After fixing the info, CVS contacted the government:

CVS notified the federal regulator, the Centers for Medicare and Medicaid Services, about the problem in January. A Medicare spokesman said regulators worked with CVS to craft a response plan, under which CVS would offer a refund for the price difference, but only to consumers who specifically requested that. The Medicare spokesman said CVS also agreed to help unhappy customers switch to another plan.

“The plan’s lapses are … under close scrutiny,” the spokesman said, adding that Medicare has received very few complaints about the problem. …

CVS sent letters of apology to affected customers starting in late March. A letter reviewed by The Wall Street Journal didn’t mention the possibility of a refund, but directed a recipient with questions to call a toll-free number to discuss “your options.”

“Did I pay too much for medication?” the letter said in question-and-answer format. The answer: “No.” The letter said the drugs were “priced correctly at the pharmacy, but may have been higher than what the price-comparison tools estimated.”

That doesn’t sit very well with some consumer advocates, including Judith Stein of the Center for Medicare Advocacy, who told the Journal that customers “should all get their money back” or get the advertised prices for the full year. “The burden should not be on the beneficiary to prove that’s why they chose the plan.”

Meanwhile, at least one customer who called CVS to ask for a refund was told he had to file a “grievance” and provide a printout of the site showing the lower price. CVS says that’s not the company’s policy, and that anyone who paid more than the advertised price is entitled to a refund. If they ask for one, that is.

CVS Charged Medicare Customers More Than Promised [WSJ.com]

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