CMS Paid Medicare Drug Costs for Deceased Patients, Audit Reveals

The issue involves the program that began Jan. 1, 2006 by which Medicare subsidizes the drug benefit under Plan D for Medicare enrollees by making payments each month to the beneficiaries selected drug plan. Payment is made for the month to cover direct, reinsurance, and low income cost-sharing for the beneficiaries who enrolled.

"If CMS receives health status information that would either increase or decrease the previous monthly payments, it makes retroactive adjustments to correct the payment costs, reinsurance amounts and low-income subsidies after the end of each year," the OIG said. The last allowable payment is for the month the enrollee died.

The OIG recommended that CMS not only recoup the $3.6 million, but also recover improper payments in a timely manner and implement system enhancements to prevent and detect future improper payments for deceased enrollees.