The Health and Human Services Office of Inspector General (“OIG”) published a report with the results of a study intended to quantify occurrences where Medicare Part D paid for prescription drugs in 2016 that should have been paid for under the Medicare Part A hospice benefit. The OIG found that Medicare Part D paid $422.7 million for prescription drugs for beneficiaries receiving hospice care in 2016, and likely that total amount should have been paid for by Medicare Part A.
Medicare Part A provides a per diem payment to a hospice for each beneficiary in their care, “regardless of the number of services provided.” This per diem payment rate includes the cost of providing prescription drugs to treat the beneficiary’s pain, as well as symptoms related to the terminal illness and related conditions. Thus, if a Medicare Part A hospice beneficiary is also receiving drugs paid for under Medicare Part D, then the drugs are paid for twice.
This study is a follow-up to a prior, similar study conducted in 2012 directed to the same payment issue for 2009. That prior study found that, during 2009, Medicare Part D paid $33.6 million and hospice beneficiaries paid $3.8 million for prescription drugs that should have been paid for by Medicare Part A.
The current audit is directed to $422.7 million in prescription costs paid by Medicare Part D while beneficiaries were receiving hospice care in 2016. OIG took a random sample of 200 Part D records to examine for this study, which accounted for $397,121 in prescription drug costs.
The current OIG audit findings are as follows:
Of the $422.7 million in prescription costs, Medicare Part D paid $160.8 million for prescription drugs in 2016 that should have been paid for by Medicare Part A.
While it was questionable which organization should have paid for the remaining $261.9 million, it was likely the case that hospice organizations or hospice beneficiaries should have paid for many of these drugs, not Part D.
The hospices gave the following reasons for not providing the drugs – they had no knowledge that the medication was prescribed by an outside physician or nursing home staff and filled by an outside pharmacy; they miscoded the drug as non-covered; the drug was dispensed close to the hospice admission, so the hospice election was not yet processed; the pharmacy that dispensed the drug billed Part D in error; and, the hospice thought a third party was paying.
In the 2012 report, the OIG recommended that the Centers for Medicare and Medicaid Services (“CMS”), “perform oversight to ensure that Part D is not paying for drugs that Medicare has already covered under the per diem payments made to hospice organizations.” However, CMS did not concur with that recommendation, and disputed that the OIG study provided “conclusive evidence” that the double-payment issue actually existed. However, between 2012 and 2016, CMS did “communicate[] its views regarding hospice-covered drugs” to all sponsors and hospice providers through a variety of means, including letters and memoranda, and annual proposed and final rules to update the hospice payment rate and wage index.
However, it is clear from the current study that these double payment problems persist. The OIG report notes that “CMS must do more to avoid paying twice for the same drugs,” and makes several recommendations to that end, including working directly with hospices to ensure that they are providing the covered drugs, developing and executing an oversight strategy, and “seeking whatever authorities are necessary to develop proper controls.”
However, as with the 2012 report, CMS seemed skeptical of the OIG’s findings and recommendations, noting that “its current efforts will address the issue,” and that it will “continue to engage in meaningful activities to reduce duplicate payment in this areas, such as ensuring hospice providers are proactively educating beneficiaries on covered services and items (including drugs) and Part D drug plan sponsors are appropriately applying prior authorization criteria and coordinating with hospice providers on drug coverage issues.” The OIG disagreed with those assertions, noting that CMS’s current activities will likely not adequately address the issues and that they “continue to recommend that CMS develop controls to stop the duplicate hospice payments.” So, it seems the stalemate between OIG and CMS on this issue continues.