Ensuring the Integrity of Medicare Part D

WHY WE DID THIS STUDY

In the 9 years since Part D began, OIG has produced a wide range of investigations, audits, evaluations, and legal guidance related to Part D program integrity. This work has resulted in the prosecution of individuals accused of defrauding Part D, as well as the identification of systemic program vulnerabilities that raise concerns related to both inappropriate payments and quality of care. OIG has made recommendations to strengthen Part D program integrity, and progress has been made. However, Part D remains vulnerable to fraud, as evidenced by ongoing investigations. OIG has prepared this portfolio to document key progress in addressing Part D program vulnerabilities and to highlight issues that need improvement.

HOW WE DID THIS STUDY

We summarized the results of numerous OIG investigations, audits, evaluations, and legal guidance related to Part D program integrity. The work referenced throughout the portfolio was conducted in accordance with generally accepted government audit, evaluation, investigative, and legal professional standards.

WHAT WE FOUND

OIG has conducted audits and evaluations that identify systemic weaknesses that make Part D fraud and abuse possible. The program integrity vulnerabilities that OIG has identified relate to the three key players charged with safeguarding the program: Part D plan sponsors, the Medicare Drug Integrity Contractor (MEDIC), and CMS. The underlying vulnerabilities in Part D center on two main issues: (1) the need to more effectively collect and analyze program data to proactively identify and resolve program vulnerabilities, and prevent fraud, waste, and abuse before it occurs; and (2) the need to more fully implement robust oversight to ensure appropriate payments, prevent fraud, and protect beneficiaries. Furthermore, Part D remains vulnerable to fraud, as evidenced by ongoing investigations. These investigations have uncovered cases that resulted in financial harm to Part D and serious medical and financial harm to individuals. Recent growth in this casework demonstrates continued vulnerability of Part D to widespread fraud, which could be addressed through improved oversight and monitoring of the Part D program.

WHAT WE RECOMMEND

To fully protect Part D from fraud, waste, and abuse, CMS should take further action and implement OIG's unimplemented recommendations. Specifically, CMS should: (1) require plan sponsors to report all potential fraud and abuse to CMS and/or the MEDIC; (2) require plan sponsors to report data on the inquiries and corrective actions they take in response to fraud and abuse; (3) expand drug utilization review programs to include additional drugs susceptible to fraud, waste, and abuse; (4) implement an edit to reject prescriptions written by excluded providers; (5) exclude Schedule II drug refills when calculating final payments to plan sponsors at the end of each year; (6) seek authority to restrict certain beneficiaries to a limited number of pharmacies or prescribers; (7) develop and implement a mechanism to recover payments from plan sponsors when law enforcement agencies do not accept case referrals; (8) determine the effectiveness of plan sponsors' fraud and abuse detection programs; and (9) ensure that plan sponsors' compliance plans address all regulatory requirements and CMS guidance.