Managed Healthcare Executive - March 2009 - (Page 9) { LETTER OF THE LAW } prescription drug bene t have overcharged bene ciaries and the program since it began in 2006. The October 2007 report entitled “Medicare Part D Sponsors: Estimated Reconciliation Amounts for 2006” stated that an Proposed legislation puts more faith OIG review of a partially completed CMS in government drug-price negotiation audit of plans in 2006 resulted in $4.4 billion than in the private market in overpayments. More recently in a November 2008 reBY JOHN ERIKSEN port, OIG recommended that CMS should conduct the statutorily required bid audits in a timely manner as well as that “CMS could uch of the healthcare reform demodify the entire bid audit process to: (1) bate has been focused on the recent identify instances in which errors are misrepfour-and-a-half-year reauthorizaresentations and (2) quantify errors that a ect tion and $32.8 billion expansion of SCHIP, payments to plan sponsors. Modifying the bid funded through an increase in federal toaudit process would enable CMS to pursue bacco taxes. stronger enforcement and corrective actions.” That program, touted as a “down payImplementation of the latter would mark ment” on President Obama’s pledge to proan important rst step in shifting CMS’ curvide health insurance coverage to all Ameri- rent rationale for bid audits, which is to cans, expands health coverage to families improve future bid submissions, from a bid with incomes up to 300% of the federal pov- integrity/quality assurance perspective to an erty level. Other discussion has focused on enforcement perspective. Even so, absent of the multi-billion dollar health IT package fraud, CMS is still limited in its mid-planand the funding for comparative e ectiveyear enforcement capacities as it currently ness research. has no legal authority to revise the accepted bid amount or revise plan payments nor John Eriksen is a senior PART D PLAN EFFECTIVENESS does it appear to have a mechanism to reassociate at Epstein, Garnering less focus has been proposed coup erroneous payments after the reconciliBecker and Green, P.C. in its Health Care and Life legislative changes to the Medicare Part ation period is concluded. Sciences practice group D program (HR 684, S 330) introduced Whether Congress will succeed in passand focuses primarily on by Congressional democrats on January 26 ing authorizing legislation or the federal health regulatory, compliand 27, 2008, that directs the Secretary of government can implement an alternative ance, managed care and Health and Human Services to o er one or government Part D option that can eftransactional matters. more Medicare operated prescription drug fectively compete with private plans is not plans with a nationwide service area and yet clear. Equally unclear is if CMS will be enter into negotiations with pharmaceutical given the legal authority or, in the current manufacturers to reduce the purchase cost of economic climate, provided the funding to covered Part D drugs for eligible Part D inpursue more vigorous enforcement of Part dividuals who enroll in such a plan. D. One thing that does appear clear is that The legislation’s sponsors believe that the Congressional democrats especially have private Medicare Part D plans have been less expressed signi cant frustration to the free ective than the government could be in quency and e cacy of CMS oversight of negotiating price concessions. Part D plans. MHE Backers of this legislation have highlighted the HHS O ce of Inspector General This column is written for informational purposes (OIG) ndings that plans under the Medicare only and should not be construed as legal advice. Democrats frustrated with Part D plan oversight M MARCH 2009 9
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