Medicare Part D Payments Made to Deceased Beneficiaries
An OIG report found that Medicare Part D paid HIV drugs for over 150 deceased beneficiaries in 2012.
- The Department of Health and Human Services (HHS) Office of Inspector General (OIG) has released a study of the Centers for Medicare & Medicaid Services (CMS) Medicare Part D program. Specifically, the study examined HIV drug coverage, which accounts for one-quarter of one percent of all Part D, and found that in 2012, Medicare paid HIV drugs for over 150 deceased beneficiaries, in some cases more than once.
The Medicare Part D program contracts with private insurance companies, known as sponsors, to provide prescription drug coverage to beneficiaries who choose to enroll. OIG has had concerns that paying for drugs and services after a beneficiary’s death was ongoing and HIV drugs could be a target for fraud or abuse because they are “very expensive.”
The OIG analyzed Prescription Drug Event (PDE) records for HIV drugs in 2012. These records are submitted by sponsors to CMS for each drug dispensed and include information about the drug, beneficiary, pharmacy and prescriber. Then, beneficiary Enrollment Database, the Social Security Administration’s Death Master File, and Accurint’s Death Records to identify beneficiaries’ dates of death.
However, it was discovered that Medicare paid for HIV drugs for over 150 deceased beneficiaries because of problems in the current practices. CMS system processes in place reject PDE records for drugs with dates of service more than 32 days after death and payments are allowed for drugs that do not meet Medicare Part D coverage requirements. A majority (81 percent) of these drugs were dispensed by retail pharmacies, while long-term care facilities, clinics and mail orders were also responsible.
The OIG recommended that the CMS change its practice of paying for drugs that have a date of service within 32 days after the beneficiary’s death by eliminating or at least shortening the window it accepts PDE records for drug dispensing. This change would prevent inappropriate payments for drugs for deceased beneficiaries and lead to cost savings for the program and for taxpayers. CMS agreed with these recommendations
While this report only covers HIV drugs, which are a tiny fraction of what Part D handles, it could point to a larger problem that is going unaddressed. Namely, Medicare processes all PDE records the same. So if there there is a problem with HIV drugs, it can be assumed that it is happening elsewhere.
“Our review focuses on HIV drugs; however, the findings have implications for all Part D drugs because Medicare processes PDE records for all drugs the same way,” the report reads. “A change in CMS’s practice would affect all Part D drugs, not just HIV drugs. Considering the enormous number of Part D drugs, a change in practice could result in significant cost savings for the program and for taxpayers.”
