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A study of Medicare Part D disbursements for 2012 HIV patients revealed that the Centers for Medicare and Medicaid Services (CMS) paid nearly $292,381 for drugs for dead people, according to a new inspector general report. Since HIV patients account for only 0.5% of all Medicare Part D drugs finding a way to fix that problem would result in significant cost savings for the for taxpayers.

The Health and Human Services (HHS) Office of Inspector General (OIG) found that like most of the rest of the federal government, drugs purchased through Medicare Part D are subject to waste, fraud, and abuse since CMS allows for a 32-day window for purchases of prescription drugs after a person’s death. Drugs for HIV patients were chosen for study because of their very high costs. For example, one common HIV drug costs about $1,700 for a month’s supply. Although the report focuses on HIV drugs, the issues raised are relevant to all Part D drugs because controls to prevent payments after death are not specific to HIV drugs.

The Office of Inspector General (OIG) has had ongoing concerns about Medicare paying for drugs and services after a beneficiary has died” according to the IG study which is embedded below. Medicare paid for HIV drugs for 158  deceased beneficiaries. CMS’s current practices allowed most of these payments to occur. Specifically, CMS has edits (i.e., systems processes) in place that reject PDE records for drugs with dates of service more than 32 days after death. CMS’s practices allow payment for drugs that do not meet Medicare Part D coverage requirements. Most of these drugs were dispensed by retail pharmacies.

A similar report done for FY 2011, showed CMS issued $21 million in Medicare Part C and D payments for dead people. An even earlier OIG report found that CMS paid $3.6 million for deceased beneficiaries in 2006 and 2007.

Another OIG report of HIV drug recipients found that there may be other forms of over or mis- payments. The report found that..

..nearly 1,600 Part D beneficiaries had questionable utilization patterns for HIV drugs in 2012.18 In total, Medicare paid $32 million for HIV drugs for these beneficiaries. These beneficiaries had no indication of HIV in their Medicare histories, received an excessive dose or supply of HIV drugs, received HIV drugs from a high number of pharmacies or prescribers, or received contraindicated drugs. These questionable patterns indicate that beneficiaries may be receiving inappropriate or unnecessary drugs. It may also indicate that a pharmacy is billing for drugs that a beneficiary never received, or that a beneficiary’s identification number has been stolen.

As a result of the study, the OIG recommended the Centers for Medicare and Medicaid Services change its practice of paying for drugs that have a date of service within 32 days after the beneficiary’s death.

CMS should eliminate or—if necessary for administrative processing issues—shorten the window in which it accepts PDE records after a beneficiary’s death. Having no window or a short window would prevent inappropriate payments for drugs for deceased beneficiaries and lead to cost savings for the program and for taxpayers.

Granted, today is Halloween but that doesn’t mean our government should be paying money to real ghosts.

The full study is embedded below:

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