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OIG Audit Raises Concerns About Medicare Part D Plans

John Commins, for HealthLeaders Media, March 8, 2011

In addition, the audit determined that the sponsors had "commonly had complex relationships with their pharmacy benefit managers, and in some cases, these relationships lacked transparency. This lack of transparency raises concerns that sponsors may not always have enough information to oversee the services and information provided by pharmacy benefit managers." The audit found that some sponsors passed the fees that their pharmacy benefit managers received from manufacturers on to the program, while others did not.

OIG did not identify the six sponsors it audited.

The Plan D sponsors reported receiving $6.5 billion in drug manufacturer rebates in 2008, which represents approximately 10% of total gross Part D drug costs. "Rebates can substantially reduce the cost of the Part D program; however, sponsors must accurately report these rebates to the government in order for the government and beneficiaries to receive any cost savings," OIG said.

In a list of recommendations, OIG urged the Centers for Medicare and Medicaid Services to: (1) take steps to ensure that sponsors more accurately include their expected rebates in their bids, (2) require sponsors to use methods CMS deems reasonable to allocate rebates across plans, (3) ensure that sponsors have sufficient audit rights and access to rebate information, and (4) ensure that sponsors appropriately report the fees that pharmacy benefit managers collect from manufacturers. 

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