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OIG Issues Report on Duplicate Payments for Hospice Medications

On June 28, 2012 the Office of Inspector General (OIG) for the Department of Health and Human Services issued a report to the Centers for Medicare and Medicaid Services (CMS) that addresses instances of duplicative payments for prescription drugs for hospice beneficiaries. The report includes the results of an audit conducted by the OIG which identified instances where Part D payments were made for prescription drugs for hospice care, when the drugs were already covered under Part A hospice coverage, resulting in duplicate payments for the same drugs.

Hospice care provided under Part A has an all-inclusive per diem which covers all aspects of daily hospice care, including drugs specifically for that care. Some drugs may be used for both hospice and non-hospice care for the same beneficiary. Part A per diem coverage could pay for a drug used for hospice care, while Part D could pay for the same type of drug for the same beneficiary if used for non-hospice care. For instance, a beneficiary could receive pain relief medication for hospice care under Part A. If that beneficiary were to fracture a bone, they could receive the same type of pain relief medication that they already receive for hospice care, but if it is for pain relief associated with the broken bone it could be covered under Part D. The OIG audit and report examine drugs that have been paid for under Part D, but were already paid for under Part A hospice per diem.

The OIG audit, conducted during calendar year 2009, found that beneficiaries paid $3,835,557 in copayments on drugs through the Part D program that should have been covered under Part A per diem payments. During the audit period, Part D sponsors for five plans were contacted by the OIG. All five indicated that they had no procedures in place to identify drugs that should have been covered under Part A per diem payments.

Three recommendations were made to CMS in the report, two of which CMS concurred with:

1. Educate sponsors, hospices, and pharmacies that it is inappropriate for Medicare Part D to pay for drugs related to hospice beneficiaries’ terminal illnesses.

2. 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.

3. Require sponsors to develop controls that prevent Part D from paying for drugs that are already covered under per diem payments.

CMS did not concur with the recommendation that it perform oversight, stating that it requires conclusive evidence that there is an issue before making payment adjustments, and that implementing an oversight program would be costly and difficult. The OIG responded, stating that their audit work proved that duplicate payments were made and CMS should do more to address the issue.

If you have questions about Part D payments, or Part A hospice per diem coverage, please contact an experienced healthcare attorney at Wachler & Associates at 248-544-0888.