by bvernia | November 2nd, 2009
OIG-HHS released an audit report today on the performance through 2008 of the Medicare Drug Integrity Contractors (MEDICs) in detecting and preventing fraud and abuse in the Medicare Part D prescription drug benefit.
When Congress enacted Part D, it hoped that the MEDICs – private contractors hired by CMS – would use data mining techniques and Internet searches to identify fraud in the program. This report, the third by OIG-HHS of efforts to combat fraud in Part D, essentially concludes that the program is not working as anticipated, and that most of the cases reviewed by the MEDICs were not developed from Medicare data, but instead came in as referrals from external sources.
The OIG makes five main findings:
- Most (87%) of the incidents handled by MEDICs (1320 investigated out of 4194 reported to MEDICs) came in from external sources;
- Problems accessing data hampered the MEDICs’ ability to identify and investigate fraud and abuse;
- MEDICs’ lack of authority to obtain records from providers other than Part D sponsors hindered their ability to investigate;
- Part D sponsors are not required to report fraud incidents to MEDICs;
- CMS has not given MEDICs approval to audit Part D plan sponsors’ compliance programs.
The Prescription Drug Events (PDE) data to which MEDICs had access frequently suffered from misfiling some data in the wrong fields, the OIG found, and the transition to a complete, integrated data system which would permit the MEDICs to perform the job they contracted to do has taken longer than expected.
The OIG noted that in 2008, it had found that one-quarter of all Part D sponsors had made no fraud referrals to MEDICs, and, in fact, that 89% of all such referrals came from just two plan sponsors.
The top five types of fraud investigated by MEDICs were:
- Drug diversion by beneficiaries
- Inappropriate billing
- Inappropriate prescribing
- Marketing schemes (i.e., marketing of Part D plans)
- Theft of beneficiary identity/money
The report should be required reading for those considering anti-fraud measures in this year’s health care reform debate. It suggests that it’s folly to put faith in data-mining and other technological fixes for fraud, without at least providing the data infrastructure necessary to implement those fixes.
