Skip Navigation
United States Flag

An official website of the United States government. Here's how you know >

A New Look for HHS-OIG. Learn More >>

Change Font Size

Audit (A-18-08-30102)

Medicare Part D – Prescription Drug Event Reconciliation Process

Executive Summary

We contracted with a certified public accounting firm to audit CMS’s Medicare Part D Prescription Drug Event (PDE) reconciliation process. CMS’s reconciliation process compares estimated subsidy payments made to plan sponsors throughout the year with the cost data submitted by plan sponsors through PDE records and direct or indirect remuneration (DIR) data to determine any residual payments required by CMS to plan sponsors or plan sponsors to CMS.

The audit focused on understanding the design and effectiveness of CMS’s controls to (1) accurately calculate and track monthly plan sponsor payments, (2) identify incomplete and/or inaccurate PDE records received, and (3) determine the completeness of PDE records before yearend reconciliation to determine risk-sharing amounts and adjustments to risk corridors.

The audit recommended that CMS (1) strengthen controls over the bid review and audit process, (2) improve controls over the accuracy and completeness of PDE and true out-of-pocket accumulation, (3) strengthen controls to ensure completeness and accuracy of DIR data before reconciliation, and (4) conduct more plan sponsor audit procedures throughout the benefit year. CMS generally agreed with the recommendations.

Complete Report

Download the complete report (PDF)

Adobe® Acrobat® is required to read PDF files.

Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.

Office of Inspector General, U.S. Department of Health and Human Services | 330 Independence Avenue, SW, Washington, DC 20201