Dive Brief:
- A new report from the HHS Office of the Inspector General has concluded that a quirk in Medicare regulations has caused the agency to spend millions paying for drugs for deceased patients.
- The payments in question were made due to a Medicare rule allowing for reimbursement for prescriptions filled up to 32 days after a patient's death.
- To examine the impact of this policy, investigators looked only at claims from 2012 for medications used to treat HIV. They found 348 HIV prescriptions dispensed that year for dead beneficiaries, including several patients that had no history of HIV in their Medicare records.
Dive Insight:
This is obviously an embarrassing time for Medicare, which not only paid for drugs for the deceased, but doesn't know where those drugs went. The IG's office says it's likely that they ended up on the underground market for prescription meds, as the resale value is high due to their high cost. And these numbers are just for the HIV drugs paid for in-year; it seems clear that Medicare has been losing millions every year across the $85-billion-a-year Part D program due to this policy. The amount lost is obviously a small percentage of the money laid out overall by Part D, but it's a problem nonetheless.
The policy seems to have arisen originally as a means of helping pharmacies. The agency had said that the date of service listed in billing records from pharmacies could instead reflect when a pharmacy submitted bills for payment. That billing date sometimes occurred after prescription was filled, since some nursing homes and institutional pharmacies submitted bills in a monthly bundle, the Associated Press notes. But investigators found that 80% of the prescriptions for dead beneficiaries got filled at neighborhood pharmacies, making the need for the rule questionable at best.
CMS Administrator Marilyn Tavenner has formally accepted the IG's findings and says the agency is working on fixing the problem. However, there's no indication of whether CMS or any other agency plans to track down the diverted drugs and punish the perpetrators.