Transcript of CMS Director Jonathan Blum’s testimony on Medicare Part D prescription abuse

Transcript of testimony by Jonathan Blum, Deputy Administrator and Director of the Center for Medicare and Medicaid Services, on Medicare Part D prescription drug abuse before Subcommittee on Federal Financial Management on Oct. 4, 2011:

“Chairman Carper, Senator Brown, I’d like to thank you and the committee for your focus to ensure that the Medicare Part D program is as strong as possible.

“Today, the Medicare Part D program provides outpatient prescription drug benefits to more than 29 million Medicare beneficiaries. There are more than 3,400 Part D plans that provide drug benefits to Medicare beneficiaries. Medicare beneficiaries may choose from a multitude of plans to deliver their benefits. The majority receives benefits in standalone Part D drug plans – that is private plans that only provide outpatient drug benefits.

“By many measures, the Part D program has been a great success. Overall, costs have risen more slowly than the original CBO projections. A majority of beneficiaries report being satisfied with the benefits. But we know that the benefit is not perfect.

“While the program is stronger today than ever before, we know there are vulnerabilities which must be addressed.

“I want to thank the GAO for its work highlighting the potential fraud and abuse in the program, specifically related to controlled substances.

“We have reviewed carefully the GAO’s report and its recommendations. We agree with the GAO that the misuse of controlled substances is a growing problem to the Medicare Part D program.

“It is difficult to quantify the extent of the problem, but we agree that the program can do more to curb potential fraud and abuse. At a time of scarce resources and significant budget deficits, we must ensure that every federal dollar is spent as wisely as possible.

“The Part D program is relatively new. To date, our focus at CMS has been to ensure that medicare beneficiaries receive the drugs they are entitled to.

“The Medicare Part D program pays private Part D plan a capitated payment and works to make sure that the Part D plan provider provide drugs consistent with the program’s requirements.

“Our compliance efforts in recent years have been focused on the under-utilization of drugs. We placed significant audit and oversight resources to ensure that beneficiaries receive the drugs they need at the point of sale. We have placed significant sanctions on Part D plans that have failed to deliver benefits consistent with the law and our regulations.

“But the Part D program has reached a new state of maturity that we now need to shift our oversight focus. We cannot just focus on the under-utilization of Part D drugs. We must shift our focus on the over-utilization of Part D drugs. To this end, we have recently taken the following steps.

“First, last week, CMS put out new guidance to plans to ensure they’re putting into place more comprehensive drug utilization review programs to ensure they are screening for misuse of controlled substances and other drugs. If clinical reviews reveal misuse, we will expect our Part D plans to stop payment and report the fraud to law enforcement.

“Yesterday, CMS proposed new rules for the Part C and Part D programs that would ensure that the prescriber ID number is put on all Part D drug plans. This will ensure that we can produce more sophisticated data analyses and spot those prescribers that present vulnerabilities to the Part D program.

“CMS also shares concern over the high use of anti-psychotic medications given to beneficiaries in nursing homes. There’s evidence that the financial relationships between long-term care pharmacies and drug manufacturers can lead to this over-utilization. Our proposed rules put out last night suggest possible steps CMS could take to address this over-prescribing.

“CMS is also using data much more proactively. Again, our data analysis and data mining to date have been primarily focused on plans that may discourage the appropriate prescribing, denying our beneficiaries the needed drugs. Our data analysis will now also include proactively focusing on drug over-utilization.

“The GAO report suggests that CMS should consider a program whereby restricts prescribing of controlled substances to a single physician, dispensed by a single pharmacy. CMS does not believe that such a measure, which has been employed by state Medicaid programs, would work well in the Part D program.

“Part D in its current form cannot restrict a beneficiary to a single physician or a single pharmacy. CMS believes that responsibility to prevent Part D drugs rests with Part D sponsors. We must also be very concerned that beneficiaries do not face undue restrictions to necessary medications. Beneficiaries seeing many doctors may have very complicated health care needs or may be victims to a dysfunctional health care delivery system.

“Any program, in our belief, to curb overuse, misuse, or over-utilization must always involve strong clinical review and judgment to ensure that those in need do not go without or face arbitrary restrictions.

“CMS’s response to this growing problem will continue to follow these principles.”



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One Comment on “Transcript of CMS Director Jonathan Blum’s testimony on Medicare Part D prescription abuse

  1. Pingback: GAO audit uncovers prescription drug fraud by Medicare Part D beneficiaries | What The Folly?!

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