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Most CMS Audits of Medicare Part D Prescription Drug Plans Revealed Deficiencies, Many Plans Yet to Be Audited

Written by Roy Albert and Susan Berson

The HHS OIG recently issued a Report concluding that the vast majority of audited Medicare Part D Prescription Drug Plans (PDP) in existence between 2006 and 2009 had problems, many of which resulted from beneficiaries’ coverage status or payment issues.  During this same time period, a number of other PDPs were never audited.  The HHS OIG further concluded that CMS did not have evidence to show that audited PDPs instituted corrective actions as a result of adverse findings. 

The Report focuses on stand-alone PDPs and seven types of audits (not including financial audits) used by CMS between 2006 and 2009.  The results of the review led the HHS OIG to recommend that CMS: 

  • establish a comprehensive Part D auditing strategy that includes timely auditing of all sponsors; and
  • ensure that evidence is available to show that PDPs implemented corrective actions.

CMS only partially concurred with the HHS OIG’s first recommendation, stating that “a comprehensive oversight strategy, developed in coordination with the offices responsible for the management of the Part D program, is more effective than an auditing strategy” and that “auditing is just one facet of CMS’ overall oversight strategy.”  CMS concurred with the HHS OIG’s second recommendation and stated that CMS now maintains documentation of corrective actions implemented for all audits.  

This Report demonstrates that many sponsors of PDPs did not fully comply with Medicare Part D’s comprehensive statutory and regulatory requirements during the early stages of the Program.  Sponsors should be aware that the Report’s findings could result in greater audit activity and increased oversight of PDPs from CMS and the HHS OIG.

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Karen S. Lovitch

Member / Chair, Health Law Practice

Karen S. Lovitch is a Mintz attorney who represents health care companies in regulatory, transactional, and operational matters. She advises them on health care regulations such as the Stark Law and the Clinical Laboratory Improvement Amendments of 1988.

Susan W. Berson

Member / Managing Member, DC Office; Chair, Health Law, Communications, Antitrust & ML Strategies Division

Susan W. Berson is part of Mintz's leadership team. She's an attorney who advises managed care organizations, pharmaceutical services providers, industry investors, and other health care clients. She also provides counsel on the Medicare and Medicaid programs.