The Centers for Medicare and Medicaid Services (CMS) paid nearly $300,000 for drugs for dead people, according to a new inspector general report.
The Health and Human Services (HHS) Office of Inspector General (OIG) found that drugs purchased through Medicare Part D are vulnerable to waste, fraud, and abuse since CMS allows for a 32-day window for purchases of prescription drugs after a person’s death. Drugs for HIV patients are of special concern because of their high cost.
"The Office of Inspector General (OIG) has had ongoing concerns about Medicare paying for drugs and services after a beneficiary has died," the audit said.
"Medicare paid for HIV drugs for over 150 deceased beneficiaries," they said. "CMS’s current practices allowed most of these payments to occur. Specifically, CMS has edits (i.e., systems processes) in place that reject [Prescription Drug Event] PDE records for drugs with dates of service more than 32 days after death."
In all, the OIG found that in 2012 Medicare paid for 348 HIV drugs for 158 deceased beneficiaries, costing a total of $292,381.
For instance, one dead person in Miami had three HIV drugs paid for him after his death, costing $7,160.
The problem is not new. In 2011, CMS issued $21 million in Medicare Part C and D payments for dead people. Another OIG report found that CMS paid $3.6 million for deceased beneficiaries in 2006 and 2007.
Though HIV drugs make up a small amount of drugs administered through Medicare Part D, the OIG said the audit has wide implications for fraud throughout the program.
"This review looked only at HIV drugs, which account for one-quarter of one percent of all Part D drugs in 2012," the audit said. "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."
Aside from paying for drugs for dead patients, the OIG has found widespread fraud in the issuing HIV drugs.
In 2012, Part D paid $32 million for drugs for beneficiaries who had "no indication of HIV in their Medicare histories."
In addition, the 1,600 beneficiaries received "excessive" doses, and drugs from numerous different pharmacies.
"These questionable patterns indicate that beneficiaries may be receiving inappropriate or unnecessary drugs," the OIG said. "It may also indicate that a pharmacy is billing for drugs that a beneficiary never received, or that a beneficiary’s identification number has been stolen."
The OIG recommended that CMS eliminate the 32-day window, which CMS said is in place for pharmacies that bill only once a month.
"Having no window or a short window would prevent inappropriate payments for drugs for deceased beneficiaries and lead to cost savings for the program and for taxpayers," the audit said.
CMS agreed with the findings.