OIG Calls For More Action To Reduce Medicare Part D Fraud

The Department of Health and Human Services (HHS) Office of Inspector General (OIG) issued a summary report documenting the results of their work over the last nine years in relation to the Medicare Part D Program.  The report documents key advances in addressing Part D program vulnerabilities and highlights issues that need improvement.   OIG work involved conducting a wide range of investigations, audits, and evaluations.  These efforts resulted in the issuance of legal guidance related to program integrity, fraud prosecutions, and identification of systemic program vulnerabilities related to both inappropriate payments and quality of care.  The report states that, notwithstanding progress, the program continues to be vulnerable to fraud.  This is evidenced by the current level of ongoing investigations that demonstrate serious medical and financial harm to individuals and the program.  Recent growth in casework demonstrates continued Part D vulnerability to widespread fraud, which could be addressed through improved oversight and monitoring of the Part D program.

Furthermore, the OIG has focused on identifying systemic weaknesses and program integrity vulnerabilities that result in fraud and abuse.  The following three key players are charged with safeguarding the program: (1) Part D plan sponsors; (2) the Medicare Drug Integrity Contractor (MEDIC); and (3) the Centers for Medicare & Medicaid Services (CMS).  The OIG provided recommendations to all three actors for strengthening Part D program integrity by addressing the underlying vulnerabilities.  The recommendations advised more effective collection and analysis of program data to proactively identify and resolve program vulnerabilities, and to prevent fraud, waste and abuse before it occurs.  The OIG also advised the three players to fully implement robust oversight to ensure appropriate payments, prevent fraud, and protect beneficiaries. Further, the report listed a number of the OIG’s unimplemented recommendations that would assist in this effort.

OIG Recommendations

1. Require plan sponsors to report all potential fraud and abuse to CMS and/or the MEDIC;
2. Require plan sponsors to report data on the inquiries and corrective actions they take in response to fraud and abuse;
3. Expand drug utilization review programs to include additional drugs susceptible to fraud, waste, and abuse;
4. Implement an edit to reject prescriptions written by excluded providers;
5. Exclude Schedule II drug refills when calculating final payments to plan sponsors at the end of each year;
6. Seek authority to restrict certain beneficiaries to a limited number of pharmacies or prescribers;
7. Develop and implement a mechanism to recover payments from plan sponsors when law enforcement agencies do not accept case referrals;
8. Determine the effectiveness of plan sponsors’ fraud and abuse detection programs; and
9. Ensure plan sponsors’ compliance plans address all regulatory requirements and CMS guidance.