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Register'Staggering Waste' as Insurers Overcharge Medicare, Patients
'Staggering Waste' as Insurers Overcharge Medicare, Patients
by TexasBlue Sat Mar 05, 2011 5:55 pm
HHS IG: 'Staggering Waste' as Insurers Overcharge Medicare, Patients
Brian Hartman
ABC News
March 04, 2011
A new government investigation finds insurance companies have been overcharging taxpayers and patients by overstating how much they’re paying for drugs. The cost to taxpayers is nearly $2 billion a year.
At issue is Medicare Part D, a program that helps consumers afford prescription drug coverage. Insurers negotiate rebates from drug companies and they are expected to pass savings on to consumers. In fact, the HHS Inspector General found that some insurers failed to report all the rebates they received. And they did not pass savings onto beneficiaries. Insurers received more in rebates than they reported for about 23 million people -- on average about $7 more per beneficiary every month.
“As a result of this underreporting, the total excess rebate payments received by these plans is a staggering $1.98 Billion per year, leading to increased drug costs for seniors and billions of American taxpayer dollars wasted,” said Rep. Diana DeGette, D-Colo.
The report said some of inaccuracies could be explained as honest mistakes.
“It is also possible, however,” the report continued, “that some sponsors may deliberately underestimate their rebates to increase profits.”
“When sponsors underestimate rebates in their bids, beneficiary premiums are higher than they otherwise would be and both the government and beneficiaries overpay for the benefit.”
Investigators say Medicare will get back some of the money it overpaid. Beneficiaries get nothing back.
The full report: http://oig.hhs.gov/oei/reports/oei-02-08-00050.pdf
Brian Hartman
ABC News
March 04, 2011
A new government investigation finds insurance companies have been overcharging taxpayers and patients by overstating how much they’re paying for drugs. The cost to taxpayers is nearly $2 billion a year.
At issue is Medicare Part D, a program that helps consumers afford prescription drug coverage. Insurers negotiate rebates from drug companies and they are expected to pass savings on to consumers. In fact, the HHS Inspector General found that some insurers failed to report all the rebates they received. And they did not pass savings onto beneficiaries. Insurers received more in rebates than they reported for about 23 million people -- on average about $7 more per beneficiary every month.
“As a result of this underreporting, the total excess rebate payments received by these plans is a staggering $1.98 Billion per year, leading to increased drug costs for seniors and billions of American taxpayer dollars wasted,” said Rep. Diana DeGette, D-Colo.
The report said some of inaccuracies could be explained as honest mistakes.
“It is also possible, however,” the report continued, “that some sponsors may deliberately underestimate their rebates to increase profits.”
“When sponsors underestimate rebates in their bids, beneficiary premiums are higher than they otherwise would be and both the government and beneficiaries overpay for the benefit.”
Investigators say Medicare will get back some of the money it overpaid. Beneficiaries get nothing back.
The full report: http://oig.hhs.gov/oei/reports/oei-02-08-00050.pdf
TexasBlue
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