Medicare Part B could have saved $110 million, OIG asserts

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If the Medicare Part B program had used average Medicare Part D drug dispensing and fee rates, it would have saved the government $110 million in 2011, according to a report from the Department of Health and Human Services Office of Inspector General released Sept. 16.

Part B pays for certain medications, including inhalation drugs, immunosuppressive drugs, anticancer drugs, and antiemetic drugs. Those drugs also are available from Medicare Part D, which has private groups that act as payers and insurers for prescription drug benefits.

In one OIG example, Part B paid between $26.40 and $52.80 for inhalation drug dispensing costs. In comparison, the quarterly average dispensing fee that Part D sponsors paid ranged from $4.57 to $4.65, and the quarterly average dispensing fee that state Medicaid programs paid had a similar range.

Medicare Part B also paid pharmacies a $19.20 supplying fee, compared to supplying fees paid by Medicare Part D sponsors that were under $2. That quarterly average dispensing fee for state Medicaid programs ranged from $4.56 to $4.64, the report said.

While the OIG therefore recommended Medicare Part B reduce these fees to the level of Part D and state Medicaid rates, the Centers for Medicare & Medicaid Services didn't agree. It said that pharmacies that give significant amounts of these drugs need higher fees in order to get the medication to Medicare patients, while still covering Part B claims submission.

CMS said that before it would change the fees it would request a study from the OIG asking for specific identification of cost differences. The OIG asserted that doing such a study “is unlikely to be a useful deployment of government resources” and retorted that “Should any such differences exist, the notice-and-comment rulemaking process in which CMS would engage to propose lowered Part B dispensing and supplying fees would offer the pharmacy community adequate opportunity to identify differences and help CMS determine the appropriate fees.”

Click here to read the full report.