Prescription-drug plans that were a part of Medicare Part Ds inaugural year were overpaid by the CMS some $4.37 billion, according to a new HHS inspector generals office report.
All told, 180 out of the 224 Part D plans, or 80%, were overpaid a net amount of $4.37 billion, while the federal agency owes 44 plans about $816 million in payments, according to the inspector generals office. The majority of the money overpaid was from risk-sharing requirements where the prospective payments made by Medicare were significantly greater than the costs the plans accrued.
The inspector generals office recommended that the CMS modify its Part D contracts so that it could either recoup or pay out money on a quarterly basis, or request interim settlements from plans that owe money to the government.
In a written statement, Rep. Pete Stark (D-Calif.), chairman of the House Ways and Means Health Subcommittee, said that the report proves that the insurance industry is getting multibillion-dollar, zero-interest loans from Medicare.
The CMS, however, called the inspector generals criticisms unreasonable and premature. CMS spokesman Jeff Nelligan attributed payment disparities to the newness of the program and the programs huge size and scope. Nelligan said the CMS has already retrieved $3 billion of the money owed and plans to recoup the remainder. -- by Matthew DoBias
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