Medicare Part D plans "overcharged" $4.4B

The Office of Inspector General, part of the US Department of Health and Human Services, has accused the Centers for Medicare and Medicaid  Services (CMS) of failing to perform required audits of payments under  the Part D prescription drug benefit for seniors. As a result of this  alleged lapse in 2006, an estimated $4.4 billion was overcharged by  about 80% of plan providers.

The damning report follows another by the Government Accountability  Office, which noted that profits for insurers were $1.3 billion above  expectations, although this was explained by deeper than expected  discounts for prescription medicines negotiated by prescription benefit  managers (Marketletter January 5 & 12).

The CMS admitted that it had not conducted most of the 165 audits it was  supposed to complete for the 2006 period. The GAO said that in April  2007 only seven had been carried out, although the CMS now states that  103 have been either completed or are underway.