OIG Reports Show Part D is Vulnerable to Fraud & Provides Tips for Improvement

Last month the Department of Health and Human Services (HHS) announced the largest ever national take down charging 243 individuals for $712 billion in fraudulent billing. Forty-four of those individuals were charged with fraud involving the Part D prescription drug benefit. The Office of Inspector General (OIG) recently released 2 reports on Part D fraud. As prescription drug fraud is on the rise, Part D fraud prevention and oversight is a new OIG priority.

The first report, Ensuring the Integrity of Medicare Part D, summarizes the OIG’s numerous investigations, audits, evaluations, and guidances related to Medicare Part D, and provides updates on the ways the Centers for Medicare and Medicaid Services (CMS) is addressing OIG-identified weaknesses in the Part D program. It notes that ~39 million beneficiaries receive Part D benefits through more than 2,000 plans sponsored by private companies (as of 2013), and that the Part D drug payments are approximately $121 billion per year. The OIG relies on 3 key players to monitor the integrity of the Part D program: Part D plan sponsors, CMS and the MEDIC (the Medicare Drug Integrity Contractor). Part D plan sponsors monitor and pay Part D claims; CMS oversees the program, and contracts with the MEDIC to perform program integrity functions; and the MEDIC investigates potential fraud and abuse referred to it through external sources, and identifies potential fraud and abuse through proactive methods, such as data analysis.

The OIG recommends that CMS, MEDIC, and Part D sponsors all increase their efforts to address Part D fraud and abuse. OIG also advises having increased data collection, including expanded reporting requirements and drug utilization review programs, and for the implementation of even more robust oversight efforts, including mechanisms to recover payments from Part D sponsors.

The second report, Questionable Billing and Geographic Hotspots Point to Potential Fraud and Abuse in Medicare Part D looks at the sharp spending increase on frequently abused opioids in the last 10 years, highlights pharmacy-related fraud schemes related to opioids, and points out “geographic hotspots” for certain non-controlled drugs.

All Part D sponsors, pharmacies and providers should be aware of the OIG’s continuous efforts to identify and combat against potential areas of fraud in the Part D program.  Prescribers in any of the OIG’s current hotspots should also be prepared for increased scrutiny.

For more information, read the full reports:

• Ensuring the Integrity of Medicare Part D
• Questionable Billing and Geographic Hotspots Point to Potential Fraud and Abuse in Medicare Part D