Taxpayers are overpaying for Medicare patient drugs. That was the finding of a recent investigation into Medicare’s payment for a certain class of drugs. The investigation uncovered $334 million in waste due to “locked in” costs by lawmakers.
According to Inspector General investigators at the Health and Human Services Department, Medicare has failed to secure the best costs possible. The Washington Guardian reported on the waste and abuse of the government’s main health program for seniors last week.
“Investigators think $334 million might have been wasted over six years between 2005 and 2011 because Medicare can’t get the right price for its drugs.”
The Guardian awarded their Golden Hammer to the Centers for Medicare and Medicaid Services and Congress for the inexcusable waste and abuse of taxpayer monies.
Investigators uncovered the largest culprit.
The culprit is infusion drugs in durable medical equipment – basically drugs meant to be used in home medical equipment like IV’s, catheters or infusion pumps. But the drugs haven’t been purchased at the optimal sales price, investigators said. Instead, Medicare officials have been following 2003 pricing guidelines set by Congress.
“Our findings—like those of OIG’s previous studies in this area—demonstrate that AWPs are unrelated to the prices of drugs in the marketplace and that the reliance on an AWP-based payment methodology has cost the program hundreds of millions of dollars,” the inspector general said.
“Basing payments for DME infusion drugs on AWPs set almost a decade ago raises concerns about whether Medicare payment levels are appropriate,” the IG said.
For the six years covered by the latest review, investigators estimated the government had been paying between 54 percent and 122 percent more for the drugs than was necessary. Investigators identified the largest single problem, milrinone lactate, a drug used to treat heart failure. According to the IG, Medicare Plan B was paying more than 18 times the actual cost.