- CMS spent $160.8 million in 2016 on prescription drugs for hospice patients under Medicare Part D that were already covered in Medicare’s per diem payments to hospices under Medicare Part A, according to the HHS Office of the Inspector General. That's essentially paying for the medications twice.
- Following up on a similar study in 2012 that found evidence of duplicate payments, OIG also found that CMS spent $261.9 million though Part D on other medications for hospice patients that may not have been directly related to the terminal illness. OIG concluded that hospices should have paid for most of those, too.
- Reiterating a recommendation in the 2012 report, OIG says CMS should develop an oversight program with controls to identify and stop duplicate payments for drugs to treat hospice patients.
CMS makes a daily per diem payment to a hospice to manage all care, including medications, for a terminally ill patient.
As part of the care-planning process, a hospice staff member will review a patient’s current medications, and often decide to continue medications that aren’t directly related to the primary terminal diagnosis, while discontinuing others. In addition, the hospice staff will prescribe new drugs commonly used to alleviate pain, nausea, anxiety and other symptoms in terminally ill patients.
To conduct its study, OIG selected a random sample of 200 records for Part D prescriptions in 2016, with a total cost of $397,121. When asked by OIG staff members, the hospices associated with those prescriptions said they should have paid for 86 of them. “As a result, the Medicare program paid twice for these drugs—once under the Part A hospice benefit and again under Part D,” OIG staff wrote.
The hospices also said the other 108 prescriptions included in the sample were covered appropriately under Part D. The OIG disagreed, saying that hospices should have paid for most of these medications, too. Based on a review of CMS’ communications on the subject, OIG concluded that CMS intends for hospices to cover nearly all medications for hospice patients with the per diem payments.
Drugs in this second group include those related to a patient’s primary hospice diagnosis (such as Alzheimer’s, COPD, congestive heart failure and HIV) and drugs used for secondary diagnoses and preexisting conditions, OIG said.
Based on the sample, OIG estimated the total cost of Part D prescriptions that hospices should have paid for at $160.8 million for 2016. It estimated the total cost of the other drugs covered under Part D at $261.9 million.
In the 2012 study, Medicare Part D paid $33.6 million and hospice beneficiaries paid $3.8 million in 2009 for drugs that should have been covered under the per diem payments, OIG said.
OIG concluded that “CMS must do more to avoid paying twice for the same drugs.” In addition to the recommendation to establish oversight and controls, OIG said, “CMS should work directly with hospices to ensure that they are providing drugs covered under the hospice benefit.”
Since the 2012 report, CMS has focused on ensuring that health insurers sponsoring the Part D prescription plans apply prior authorization criteria before paying for certain medications “and coordinating with providers on drug coverage issues,” OIG said.
In response to the 2012 report, CMS said that an oversight program aimed at stopping the duplicate payments would be costly and difficult to administer, according to OIG.