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Requiring Part D plan sponsors to report fraud activity would fix one of the program's many gaps


A week ago, Shantanu Agrawal, M.D., deputy administrator and director for the Center for Program Integrity at the Centers for Medicare & Medicaid Services (CMS), sat in front of the House Subcommittee on Oversight and Investigations and calmly juggled a barrage of questions from representatives who wondered, sometimes aggressively, why CMS isn't doing more to prevent fraud within the Medicare Part D program.

Agrawal stuck to his script. He repeatedly pointed to the rule finalized last year that requires Part D prescribers to enroll in Medicare, and subsequently allows the agency to revoke that status for providers with abusive prescribing habits. He lamented the challenges the large program faces in coordinating fraud prevention efforts. When asked why CMS has not implemented nine outstanding Part D recommendations identified by the Office of Inspector General (OIG), he deflected, saying that CMS "largely agrees," but that the OIG's directives--some of which have been in place since 2006--require a "multifaceted" approach that requires "many levels of implementation."

There are two recommendations that don't, and they both involve reporting by Part D plan sponsors. The OIG recommends plan sponsors 1) report fraud and abuse to CMS and/or Medicare Drug Integrity Contractors (MEDIC), and 2) report data on inquiries and corrective actions related to fraud and abuse.

These aren't new issues by any stretch of the imagination. A 2009 OIG report indicated that MEDICs lacked necessary data to investigate fraud and abuse, and remained unaware of potential fraud schemes because plan sponsors reported incidents voluntarily. Six years later, CMS is haunted by the same problems.

Assistant Inspector General of Evaluation and Inspections at the OIG Ann Maxwell seemed understandably exasperated by the lack of sponsor reporting.

"We cannot arrest our way out of this problem," she said at the hearing, referencing the recent nationwide fraud bust of 243 individuals. "We have to strengthen our defenses."

She went on to acknowledge that Part D sponsors serve as the "first line of defense" in recording and capturing potential fraud, waste and abuse. The massive elephant in the room, however, is the fact that CMS is largely left in the dark when it comes to how those sponsors are managing fraud. Except, instead of ignoring the elephant, everyone is staring dumbly in its direction.