Chairman Carper Responds to Inspector General Report on Medicare Prescription Drugs

Improper Payments Made for Incarcerated Individuals

WASHINGTON- Today, Homeland Security and Governmental Affairs Committee Chairman Tom Carper (D-Del.) highlighted a report by the Department of Health and Human Services (HHS) Office of the Inspector General (OIG) with estimates that Medicare had paid more than $11 million between 2006 and 2010 for prescription drugs for beneficiaries who were incarcerated. Federal regulations stipulate that prisoners are not eligible for benefits under Medicare’s prescription drug benefit program and that the Centers for Medicare and Medicaid (CMS) should not provide reimbursements to providers for these beneficiaries.

“Today’s report is a reminder that we have a lot of work to do to combat waste in Medicare,” said Chairman Carper. “The Medicare program was never designed to provide healthcare benefits to men and women who are incarcerated. As the Inspector General points out, some basic reforms and new internal controls for Medicare will help curb these improper payments and save millions of taxpayer dollars. This is exactly the type of low hanging fruit that we should be targeting to save our taxpayers’ hard earned money. That’s why I have been working to pass legislation that will give the Centers for Medicare and Medicaid Services the tools necessary to cut down on improper payments.”

In its report, the HHS OIG noted that CMS had inappropriately paid for prescription drugs for incarcerated beneficiaries due to inadequate internal controls. In addition to identifying and resolving the problem, the HHS OIG recommends that CMS strengthen internal controls to ensure that Medicare does not pay for prescription drugs for incarcerated beneficiaries.  The HHS OIG also recommended that CMS make available to the Medicare prescription drug plan companies the data on incarcerated beneficiaries.

In June 2013, Chairman Carper held a hearing to review prescription drug abuse in Medicare, including improper payments to ineligible beneficiaries.  Additionally, the HHS OIG released a similar report, Medicare Improperly Paid Providers Millions of Dollars for Incarcerated Beneficiaries Who Received Services during 2009 through 2011 (A-07-12-01113), which found that CMS paid $33.6 million in claims to medical providers for services to more than 11,000 beneficiaries who were incarcerated between the years 2009 and 2011.