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Oversight of Medicare Prescription Drug Decisions

Ann Maxwell, Regional Inspector General in Chicago for the Office of Evaluation and Inspections, sits down with Roberta Baskin, Director of Media Communications.


[Roberta Baskin] I'm Roberta Baskin, Director of Media Communications, speaking with Ann Maxwell, Regional Inspector General in Chicago for our Office of Evaluation and Inspections. Let's talk about your recently released evaluation that found gaps in the oversight of conflicts of interest in Medicare's prescription drug program. It's a huge program. What kind of conflicts did you focus on?

[Ann Maxwell] We looked at how insurance companies that offer prescription drug coverage to Medicare beneficiaries make sure that Pharmacy and Therapeutic Committees are not making drug decisions based on committee members pushing financial interests. We also looked at the oversight of insurance companies' efforts to prevent conflicts provided by the Centers for Medicare & Medicaid Services, known as CMS.

[Roberta] So, tell me more about these committees and the decisions they make.

[Ann Maxwell] Sure. The committees are commonly referred to as P&T committees. Each Medicare prescription drug plan offered by insurance companies is required to have a P&T committee. The committee makes decisions about which drugs can be covered by the insurance. These coverage decisions can affect a both the beneficiaries access to specific drugs and the cost of drugs to the beneficiaries and the Federal Government.

[Roberta Baskin] I assume there are rules about how these committees should decide what drugs the insurance plans will cover.

[Ann Maxwell] Absolutely. Federal law requires these committees to make drug coverage decisions based on scientific evidence and standards of practice. Therefore, insurance companies must prevent committee members from giving preference to certain drugs based on their personal financial interests.

And, insurance companies must comply with the Federal requirement that at least one physician and one pharmacist on each committee be independent and free of conflict with insurance companies and pharmaceutical manufacturers.

[Roberta Baskin] And what did you find? Are committees following those rules?

[Ann Maxwell] We couldn't tell. The data collected to monitor compliance are so full of discrepancies that we couldn't clearly identify the current members of the P&T committees. Without identifying the members on each committee, we couldn't tell whether the committees met Federal requirements.

[Roberta Baskin] So, what kind of oversight is there?

[Ann Maxwell] We found very little oversight by the insurance companies and CMS. In particular, the majority of committees have no definitions of conflict, which reduces reduce the number of situations actually defined as a conflict. Also, many insurance companies' allow the committee members to self-determine whether they have conflicts and what to do about it. Finally, we found that CMS does not directly oversee an insurance companies' compliance with Federal conflict of interest requirements. One of the reasons the compliance data is so bad is that CMS (CAN'T HEAR THIS2:36)

[Roberta Baskin] But did you find any evidence of conflicts among committee members.

[Ann Maxwell] In this evaluation, we were focused on the oversight mechanisms being used to protect the program. We didn't attempt to uncover actual conflicts of interest. In fact, it would be proved difficult to detect actual conflicts without some insider information.

Limited oversight does not necessarily indicate that financial interests are influencing coverage decisions. But, it sure does expose the program to that possibility. And as we know from other research in health care, financial interests in the pharmaceutical industry are common. In fact, there is widespread evidence that financial interests exist between pharmaceutical manufacturers and health care providers, and that these relationships influence behavior.

[Roberta Baskin] So you think there is reason to be concerned?

[Ann Maxwell] I do. If conflicts of interest within the Medicare prescription drug program go undetected or are not well managed, beneficiaries may not get the best treatment available, Medicare dollars may be wasted on inappropriate treatment, and public confidence in the Federal Government is undermined.

[Roberta Baskin] So you've laid out a serious problem. What should be done about it?

[Ann Maxwell] The OIG calls for more effective oversight. We recommend that CMS establish minimum expectations for insurance companies' to make sure they have the basic processes in place to detect and manage conflicts of interest. We also recommend that CMS do more directly to ensure committees are complying with Federal conflict of interest requirements.

[Roberta Baskin] Thank you, Ann Maxwell, Regional Inspector General for the Office of Evaluation and Inspections, for sharing this important work on conflict of interest in the Medicare prescription drug program.

[Ann Maxwell] Thank you, Roberta.