Medicare Could Be Paying Twice for Prescription Drugs for Beneficiaries in Hospice

During calendar year 2009, Medicare Part D paid for prescription analgesic, antinausea, laxative, and antianxiety drugs, as well as prescription drugs used to treat chronic obstructive pulmonary disease and amyotrophic lateral sclerosis, that likely should have been covered under the per diem payments made to hospice organizations. As a result, the Medicare program could be paying twice for prescription drugs for hospice beneficiaries: once under the Medicare Part A hospice per diem payments and again under Medicare Part D.

To be eligible for Medicare hospice care, a beneficiary must be entitled to Part A of Medicare and be certified as terminally ill (i.e., having a medical prognosis that life expectancy is 6 months or less if the disease runs its normal course). Under the Medicare Part D program, individuals entitled to benefits under Medicare Part A may obtain voluntary coverage for prescription drugs.

We recommended that CMS (1) educate sponsors, hospices, and pharmacies that it is inappropriate for Medicare Part D to pay for drugs related to hospice beneficiaries' terminal illnesses; (2) perform oversight to ensure that Part D is not paying for drugs that Medicare has already covered under the per diem payments made to hospice organizations; and (3) require sponsors to develop controls that prevent Medicare Part D from paying for drugs that are already covered under the per diem payments. CMS concurred with our first and third recommendations but did not concur with our second recommendation.