HHS Inspector General Finds Insurers Overcharged Beneficiaries, Taxpayers By Billions For Medicare Part D

Main Category: Medicare / Medicaid / SCHIP
Also Included In: Health Insurance / Medical Insurance;  Public Health
Article Date: 03 Feb 2009 - 5:00 PDT

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Private health insurers that operate plans under the Medicare prescription drug benefit have overcharged beneficiaries and the program by several billion dollars since the program began in 2006, but CMS remains unaware of the total impact of the practice because of a failure to perform required audits, according to a report recently released by the HHS Office of Inspector General, McClatchy/Raleigh News & Observer reports. According to the report, for 2006, 80% of health insurers that operate plans under the Medicare prescription drug benefit overcharged the program by about $4.4 billion.

CMS must audit at least one-third of all health insurers that operate plans under the Medicare prescription drug benefit. However, of the 165 audits that CMS should have conducted for 2006, the agency had begun only seven as of April 2007, the report found. The report states that CMS likely will not address the problems found with the audits for 2006 before 2010. "Delaying financial audits increases the risk that (the companies) will use inaccurate and unsupported ... data to estimate the cost of providing Part D benefits in future plan years," according to the report.

In response to the report, CMS officials said that the agency had begun or completed 103 of the 165 audits for 2006. Sen. Claire McCaskill (D-Mo.) said of the report, "It shows a mindset that could care less about wasting taxpayer money, that has no problem with padding profits of drug companies with hard-earned taxpayer dollars" (Goldstein, McClatchy/Raleigh News & Observer, 2/1).

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