Medicare Paid for HIV Drugs for Deceased Beneficiaries

WHY WE DID THIS STUDY

Under the Medicare Part D program, CMS contracts with private insurance companies, known as sponsors, to provide prescription drug coverage to beneficiaries who choose to enroll. OIG has had ongoing concerns about Medicare paying for drugs and services after a beneficiary has died.

Drugs that treat the human immunodeficiency virus (HIV) can be a target for fraud, waste, and abuse, primarily because they can be very expensive. Although this report focuses on HIV drugs, the issues raised are relevant to all Part D drugs.

HOW WE DID THIS STUDY

We based this study on an analysis of Prescription Drug Event (PDE) records for HIV drugs in 2012. Part D sponsors submit these records to CMS for each drug dispensed to beneficiaries enrolled in their plans. Each record contains information about the drug, beneficiary, pharmacy, and prescriber. We used the Beneficiary Enrollment Database, the Social Security Administration's Death Master File, and Accurint's Death Records to identify beneficiaries' dates of death.

WHAT WE FOUND

Medicare paid for HIV drugs for over 150 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.

This review looked only at HIV drugs, which account for one-quarter of one percent of all Part D drugs in 2012. However, our findings have implications for all drugs because Medicare processes PDE records for all drugs the same way. Considering the enormous number of Part D drugs, a change in practice would affect all Part D drugs and could result in significant cost savings for the program and for taxpayers.

WHAT WE RECOMMEND

We recommend that CMS 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 for drugs dispensed after a beneficiary's death. Such a change would prevent inappropriate payments for drugs for deceased beneficiaries and lead to cost savings for the program and for taxpayers. CMS concurred with our recommendation.