Report on the Medicare Drug Discount Card Program Sponsor aClaim, Inc.

EXECUTIVE SUMMARY:

The objectives of our review were to determine whether aClaim complied with Federal requirements to (1) ensure that beneficiaries did not exceed their transitional assistance (TA) limits, (2) apply TA funds only to covered drugs, (3) pass on negotiated prices to beneficiaries and offer the lower of the negotiated prices or the usual and customary prices, (4) support the expenditures and withdrawals it reported to CMS, and (5) ensure that beneficiaries were enrolled when aClaim filed their claims. AClaim properly supported the expenditures it made on behalf of beneficiaries and the withdrawals from the Payment Management System. For the 45 claims reviewed for enrollment, all of the beneficiaries were enrolled at the time of the service. However, aClaim did not have proper procedures in place to ensure that it always complied with Federal requirements to ensure that beneficiaries did not exceed their TA fund limits, apply TA funds only to covered drugs, and pass on negotiated prices to beneficiaries and charge the lower of the negotiated prices or the usual and customary prices. As a result, CMS overpaid aClaim $792 for beneficiaries who exceeded their TA limits and $8,088 for excluded drugs for the period July 12, 2004, through July 31, 2005.

We recommended that aClaim: (1) reimburse CMS for the $792 by which it exceeded TA fund limits; (2) determine whether the amount it reimbursed CMS for excluded drugs included any of the $8,808 in TA funds identified in our audit and reimburse the difference; and (3) implement policies and procedures, if it continues in Part D, that it does not pay for statutorily excluded drugs with CMS funds and offers negotiated prices to beneficiaries. In its written comments on our draft report, aClaim did not agree with any of our findings or recommendations.