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Reports Highlight Issues with Part D Oversight, Appeal Process for Drug Coverage Determinations

 

Email Alert

February 22, 2008
By Stephanie Vasconcellos and Clay Wortham*

The Department of Health and Human Services (HHS) Office of the Inspector General (OIG) and the Government Accountability Office (GAO) recently released reports relating to the Medicare Part D prescription drug benefit.

On February 20, the OIG released its report identifying the Department of Health and Human Services' "top management and performance challenges." The report, which was initially part of the Fiscal Year 2007 HHS Agency Financial Report, identifies Part D oversight, including fraud and abuse and Medicare payment issues, as the agency's "Management Issue 1." The report notes that CMS primarily relies on complaints to identify Medicare Part D fraud and abuse, and that neither CMS nor the Medicare Drug Integrity Contractor has conducted any significant fraud detection analysis of the Part D program. In addition, the report comments that many Part D sponsors have fraud, waste, and abuse compliance plans that do not meet CMS' requirements. The OIG indicates that CMS is making progress with regards to protecting Medicare Part D from fraud and abuse, but that further safeguards are needed.

On February 21, the GAO issued its report analyzing Part D drug coverage determinations and appeals from those determinations. The report examines the appeals process by which beneficiaries, their appointed representatives, and their physicians ask Part D sponsors to cover prescription drugs that are otherwise restricted under beneficiary plans. The GAO observed that approximately 67% of all such coverage determination requests were approved, noting that in some cases, Part D sponsors issued denials only because the sponsors lacked the information necessary to make a fully-informed determination. The GAO noted that CMS' "oversight of sponsors is hindered by poorly defined reporting requirements" and recommended that CMS more carefully define Part D sponsors' reporting requirements related to coverage requests and approvals.

For more information, access the OIG report and the GAO report.

*We would like thank Stephanie Vasconcellos, Esquire, and Clay Wortham, Esquire (Neal Gerber & Eisenberg LLP, Chicago, IL) for writing this email alert.

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