OIG reports revisit questionable billing and fraud within Medicare Part D

Two new reports released by the Office of Inspector General (OIG) indicate that rising Medicare Part D costs linked to commonly abused opioids, coupled with questionable billing practices and geographic fraud hotspots, point to missed opportunities for fraud prevention by the Centers for Medicare & Medicaid Services (CMS).

In last week's national fraud takedown, 44 of the 243 implicated individuals were arrested for prescription drug fraud tied to Medicare Part D. The OIG reports released Tuesday highlight data that indicate Part D fraud is a growing fraud trend.

The first report, revealing questionable billing practices and geographical hotspots of Part D fraud, indicates that Part D spending on commonly abused opioids has grown 156 percent in the last nine years, reaching $3.9 billion in 2014. These types of drugs significantly outpaced other prescriptions. The total number of beneficiaries receiving commonly abused opioids grew 98 percent, compared to 68 percent for all other drugs.

The OIG also found that more than 1,400 retail pharmacies had questionable billing practices for Part D drugs in 2014, totaling $2.3 billion. Improper billing and potential fraud with particular drugs such as Solaraze, Vescepa and Lovaza occurred in five geographical hotspots, according to the report:

  • Los Angeles, California
  • McAllen, Texas
  • San Juan, Puerto Rico
  • Miami, Florida
  • New York, New York

"CMS has made progress in its Part D program integrity efforts. However, the findings in this data brief and previous OIG work demonstrate that more needs to be done to address fraud and abuse," the report concludes.

The second report touches on that very issue, revealing that CMS has missed opportunities to identify and prevent fraud associated to with Part D plans. The report notes that over the past nine years, the OIG has seen an increase of Part D fraud complaints and has issued legal guidance in an effort to prevent frauduland behaviors. Last year, the OIG called on CMS to improve anti-fraud oversight related to Part D plans. CMS countered with a new rule targeting Part D fraud and abuse.

Previous audits, reports, and evaluations have found that vulnerabilities in Part D fraud stem from two issues: Better program data collection and analysis, and more robust oversight. In its latest report, OIG outlines nine recommendations pushing CMS to take further action on OIG's previously unimplemented fraud prevention suggestions, including requiring Part D plan sponsors to report potential fraud and abuse to CMS.

For more:
- here's the OIG report about Part D spending on commonly abuse opioids
- here's the OIG report on fraud prevention recommendations

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