CMS's Enhanced Controls Did Not Always Prevent Terminated Drug Utilization in Medicare Part D

The steps the Centers for Medicare & Medicaid Services (CMS) has taken to address terminated drug utilization in Medicare Part D were not entirely effective and, as a result, CMS continued to accept some prescription drug event (PDE) data for terminated drugs in calendar years (CYs) 2014 and 2015. Although CMS has made improvements to prevent terminated drug utilization in Part D, it accepted PDE data totaling $31.9 million in gross drug costs for 3,705 terminated drugs in CYs'2014 and 2015. CMS did not compare the information on termination dates in its quarterly Medicaid drug rebate files with the Food and Drug Administration's (FDA) file, did not investigate the discrepancies that existed between these two data sources, and did not update its system edits in a timely manner.

We recommended that CMS continue to strengthen its internal controls to ensure that all PDE data for terminated drugs are rejected by working with FDA to verify the accuracy of drug termination dates, to include comparing the information on termination dates in its two data sources, investigating discrepancies between the data sources, and verifying termination dates with the manufacturers; and by updating its system edits with a new version of FDA's file on a more timely basis.

CMS concurred with our second recommendation but not with our first recommendation, stating that although it remains committed to strengthening its internal controls to ensure that PDE data for terminated drugs are rejected, it regards FDA as the expert authority and source for national drug code listing information. We maintain that our findings and recommendations remain valid, and we continue to assert that it is CMS's responsibility to use the information in the drug rebate files to identify differences between the two data sources.