CMS Paid Medicare Drug Costs for Deceased Patients, Audit Reveals

Cheryl Clark, May 27, 2011

The federal government paid $3.61 million to reimburse private drug plans the cost of prescriptions for Medicare patients who had died a month or more earlier, according to an audit by the U.S. Office of Inspector General.

Improper payments were made for 1,500 of 2.7 million deceased enrollees over a 25-month period spanning 2005 to 2007, less than 1% of those who died, but the problem was that the Centers for Medicare & Medicaid Services categorized these deceased enrollees as alive or having different dates of death than those listed in the Social Security Administration's master files.

"Although CMS had correctly stopped payments for the vast majority of deceased enrollees, its system did not always identify and prevent the improper payments," the OIG said. Additionally, "CMS did not always recover payments made on behalf of deceased enrollees," and needs to recoup that $3,610,710 from the sponsors of Medicare prescription drug plans.

Additionally, for another 2,222 deceased enrollees, CMS recovered overpayments for Part D prescription drugs but recovery was delayed by up to 39 months. For nearly half of those 2,222, delay in recovery was 1.5 to two years.

In response, CMS administrator Donald Berwick, MD, wrote that the agency concurs with the recommendation, "but disagrees that CMS has not yet recouped these payments."

Berwick said it has implemented enhancements to allow the agency to detect and recover such payments made for deceased enrollees retroactively.

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