William H. Heino, Sr. v. Eric K. Shinseki, Opinion Number 09-112, decided April 11, 2011 involves VA regulations requiring a veteran pay a co-pay for medication prescriptions.
The facts are simple. The veteran had a prescription for a medication that requires that he split the pill in half and take one half every day. The VA has a $7 prescription drug co-pay and the veteran believed that since he was only getting 15 pills he should only pay a $3.50 co-pay.
38 USC 1722A set the prescription co-pay at “$2 for each 30-day supply of medication” but allowed the VA to increase that amount but said the VA may not require a veteran pay an amount in excess of the cost to the VA of the medication. VA regulations increased the amount to $7 in 2002.
Initially, the Court rejected the veteran’s argument based on the plain language of the statute that requires the co-pay “for each 30-day supply of medication”. “[T]he statute does not require a copayment for 30 doses of medication, but rather for a 30-day supply of medication—regardless of the dosage prescribed for the 30-day period.” Id. at *7. “Moreover, the statute expressly provides that “if the amount supplied is less than a 30-day supply, the amount of the charge may not be reduced.” Id. at *7.
The Court spent a longer time on the limitation of the co-pay amount to the “cost to the Secretary”. The VA argued this cost includes the cost of dispensing the prescription. The Court found the statute’s language does not clearly address administrative costs but found the VA’s interpretation that it does to be reasonable. The Court seemed to accept as a matter of faith that administrative costs drove the amount to at least $7 as there is no plain accounting of these costs in the decision. I think the Court was essentially saying it was administratively more feasible to assume the $7 was fair rather than have the VA do a cost analysis on each drug it prescribes and then set the amount.
Judge Hagel dissenting regarding the inclusion of administrative costs and essentially said the plain language of the statute is the cost of the drug to the Secretary and that should mean what the Secretary paid for it. He also found that private pharmacies manage to determine the prices and profit margins on drugs and isn’t sure why the VA could not do the same.
Overall, I am sympathetic to the Court and the VA’s desire to avoid doing a cost analysis on every single drug but find Judge Hagel to be legally more persuasive.
Decided by Judges Moorman and Schoelen with J. Hagel dissenting.
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