Consider This

. . .who pays?

Reading tea leaves might be easier than understanding how Medicaid and Medicare reimbursement plans work. A report released this month by the Office of Inspector General (OIG) at the Department of Health and Human services reveals how difficult it is to track where dollars go and to whom, and why it is imperative to do so.

In Concerns With Rebates in the Medicare Part D Program, the OIG concluded, "Sponsors commonly underestimated rebates in their bids, which led to higher beneficiary premiums." This amounted to $6.5 billion in drug manufacturer rebates (about 10 percent of the cost of the program) in 2008. Their recommendations were based on six plans for Medicare Part D that covered about one-quarter of those enrolled in 531 plans contracted with pharmacy benefit managers. The six plans "encouraged beneficiaries to use certain drugs."

The OIG concluded that the average of $275 per person, which was supposed to be rebated to the beneficiary, wasn't, at least not in those amounts. Returns were inconsistent at best. They further concluded that opaque and complex transactions complicated the ability of CMS to monitor and review the arrangements.

Who pays for this? Taxpayers.


OIG recommendations and the CMS responses are included in the pdf available for download: Concerns With Rebates in the Medicare Part D Program.

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