Medicare improperly paid out millions for prescription drugs provided to incarcerated persons, a new government report finds.
People who are incarcerated are largely ineligible for federal health care benefits, and are specifically ineligible for coverage under Medicare Part D. But despite the restrictions, Medicare Part D paid out millions for prescription drugs for incarcerated people due to a lack of internal controls, according to a new Department of Health and Human Services’ Office of Inspector General (OIG) report made public Monday.
The OIG estimates that Medicare Part D accepted “unallowable” prescription drug event (PDE) records submitted by sponsors or private prescription drug plans for prescription drugs, resulting in nearly $12 million paid out to people in prisons from 2006-2010.
“[Centers for Medicare and Medicaid Services] inappropriately accepted PDE records submitted by sponsors for prescription drugs provided to incarcerated beneficiaries and used those records to make its final payment determinations,” the report reads. “Specifically, for 49 of the 100 beneficiaries that we sampled, CMS accepted 1,298 PDE records submitted by sponsors for prescription drugs provided to incarcerated beneficiaries. The gross drug costs associated with these 1,298 accepted PDE records totaled $325,903.”
The OIG was unable to verify whether the remaining 51 beneficiaries of the 100 sampled were incarcerated during the dates listed in CMS’ database and therefore “did not question” those beneficiaries’ PDE records.
“On the basis of our sample results, we estimated that CMS accepted PDE records with gross drug costs totaling an additional $11,656,314 for incarcerated beneficiaries,” the report explained.
The report comes after an earlier IOG report detailed how Medicare made $33.6 million in improper payments from 2009-2011 to people providing services to inmates under Part A and Part B.
The IG report made three recommendations, including resolving the 49 improper payments made for people who were found to be in jail, strengthening controls to make sure Medicare is not paying for inmate drugs, and reopening and identifying all improper payments, including the OIG’s estimates. CMS concurred with all the recommendations except the third.
“There is no effective way of fully recovering these payments without first implementing the appropriate policies and procedures, including the relevant system changes. After implementing regulations clarifying the relevant policy, CMS will update the applicable changes to the PDE data,” CMS administrator Marilyn Tavenner wrote in he response to the report.