OIG Part D – Part A – Hospice Audit

Angie Szumlinski Case Study, News

Why OIG Did This Review

In 2012, the OIG issued a report to the Centers for Medicare and Medicaid Services (CMS) indicating that during 2009, Medicare part D paid for prescription drugs that likely should have been paid for by hospice organizations under the Medicare Part A hospice benefit. They matched Part A and Part D data to identify occurrences when Part D paid for drugs for beneficiaries who were receiving hospice care at the same time. The OIG conducted this audit to follow up and expand on the previous audit.

The objective was to determine whether the Medicare Part D program paid for drugs during 2016 that should have been paid for by hospice organizations under the Medicare Part A hospice benefit.

How the OIG Did This Review

The audit covered $422.7 million in Part D total costs for prescriptions filled while beneficiaries were receiving hospice care.

They selected a stratified, random sample of 200 Part D records and contacted hospice organinzations to find out if they should have paid for the drugs.

What the Audit Showed

Medicare Part D paid for drugs during 2016 that hospices should have paid for under Medicare Part A hospice benefits. On the basis of the sample results, it is estimated that the Part D total cost was $160.8 million for drugs that hospice organizations should have paid for. Additionally, although hospices told us they should not have paid for the drugs associated with the remaining $261.9 million of the $422.7 million total cost, a review of CMS communications with hospices and sponsors between 2012 and 2016 indicates otherwise-hospice organizations or hospice beneficiaries likely should have paid for many of these drugs, not Part D.

What OIG Recommends and CMS Comments

CMS must do more to avoid paying twice for the same drugs. As previously recommended by the OIG, CMS should work directly with hospices to ensure that they are providing drugs covered under the hospice benefit. In addition, we recommend that CMS should develop and execute a strategy to ensure that Part D does not pay for drugs that should be covered by the Part A hospice benefit, which would save at least an estimated $160.8 million a year in Part D total cost, with potentially much higher annual savings associated with the drugs that hospices said they were not responsible for providing. This should include working with Part D sponsors and seeking whatever authorities are necessary to develop proper controls.

In written comments in the OIG draft report, CMS stated that its current efforts will address the issue and help ensure there is no disruption in beneficiary access, indicating that it will continue to engage in meaningful activities to reduce duplicate payment in this area, 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 disagrees with CMS’s assertion that its current activities will adequately address the issue and the OIG will continue to recommend that CMS develop controls to stop the duplicate hospice drug payments.