In two recent reports, the OIG identified gaps in CMS oversight of Part D PDP sponsors. The first report, Audits of Medicare Prescription Drug Plan Sponsors,” examined the extent to which CMS conducted seven types of audits developed to identify problems and correct deficiencies in the Part D program: auto-enrollment readiness audits; benefit integrity audits; bid audits; compliance plan audits; long-term-care pharmacy contract audits; pharmacy access audits; and program audits.  Note that there is no legal requirement for CMS to conduct these audits; mandatory financial audits of PDP sponsors are being examined by the OIG for a separate report. The OIG found that CMS did not conduct any of the seven types of audits for 50 of the 125 stand-alone PDP sponsors in 2006 through 2009. For the audits that were conducted, 79% identified problems (the majority of which involved beneficiaries’ coverage status or payment issues). The OIG recommends that CMS establish a comprehensive Part D auditing strategy that ensures that each plan sponsor is audited within a certain timeframe. While CMS plans to complete a bid audit of every PDP parent organization, CMS believes a comprehensive oversight/performance monitoring strategy is more effective than an auditing strategy. CMS concurred with a second recommendation that it ensure that evidence is available to show that corrective actions have been implemented.

A second report, Review of Excluded Providers in the Medicare Part D Program,” found CMS improperly accepted prescription drug event (PDE) data submitted by PDP sponsors for prescriptions written by excluded providers. Specifically, CMS accepted PDE data with gross drug costs totaling $15.1 million for prescriptions written by excluded providers for 2006 through 2008, and information was inconclusive to determine whether CMS accepted an additional $2 million in such drug costs because the prescriptions did not contain unique prescriber identifiers. The OIG recommended that CMS resolve identified improper Part D payments made for prescriptions written by excluded providers and take a series of steps to strengthen internal controls to prevent such payment in the future.