Audits of Medicare drug plans lacking

Nearly three years into the Medicare drug benefit, federal officials have yet to ensure that private drug plans enacted programs to deter fraud and abuse, government investigators say.

About 24 million people are enrolled in Medicare drug plans subsidized by the federal government. The plans are required to develop programs to stem improper spending, but the Centers for Medicare and Medicaid Services has not conducted audits to ensure those programs were up and running properly. That lack of oversight "risks significant misuse of funds in this $39 billion program," the Government Accountability Office said in a report to be publicly released Monday.

To get a better handle on that risk, the GAO looked at whether five unnamed insurance plans met requirements for participation in the drug benefit. For example, the companies must have effective training programs for workers that address pertinent laws and discuss common fraudulent schemes. Only two companies fully met that requirement.

The results were better for some of the other requirements. All five companies were in compliance with having written standards for detecting and preventing waste and abuse.

Investigators recommended that Medicare officials make timely audits of the plans' fraud prevention programs. Medicare officials replied that, while they have not yet conducted onsite audits, they asked plans to complete a self-assessment survey. They also noted that Congress capped funding for its auditing programs at $720 million in 2003. So, they've focused on addressing complaints.

With inflation, the funding cap amounts to doing more oversight with fewer resources. The cap "has seriously degraded CMS' ability to meet its responsibilities in combating fraud and abuse," said Kerry Weems, acting administrator for the Centers for Medicare and Medicaid Services.

Sen. Charles Grassley, R-Iowa, said the companies are acting as federal contractors and should be meeting all conditions for doing business with the government.

"This is unacceptable. Some plan sponsors are dragging their feet on required anti-fraud prevention, and CMS is letting them get away with it," Grassley said.

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On the Net:

Government Accountability Office: http://www.gao.gov