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Office of Inspector General finds that Part D plans inappropriately deny drug coverage

Written by Diane Archer

A new report from the HHS Office of the Inspector General (OIG) finds that Medicare Part D drug plans are inappropriately denying drug coverage to their members. Consequently, thousands of people with Medicare are forced to pay for drugs that should be covered or to forego filling their prescriptions.

The OIG report explains that, much like Medicare Advantage plans, Part D plans are coming between patients and their doctors, second-guessing whether their members need the drugs their doctors have prescribed. It also shows that Part D insurers are putting their profits ahead of the health care needs of their members. The question is whether the federal government has a way to hold these private insurers accountable for their misdeeds and ensure that they cover the prescription drugs their members need.

According to the OIG, in 2017, Medicare Part D insurers denied millions of claims for prescription drugs presented at people’s pharmacies. However, on appeal, they overturned many of the claims they had previously denied. The reversals indicate that the original denials were inappropriate.

In some cases, the drugs people had been prescribed were not on the Part D insurer’s approved drug list or they required a preapproval. Whatever the case, older adults and people with disabilities were forced to pay out of pocket for their drugs, to forego filling their prescriptions, or to take further steps to get their drugs approved. And, in many cases, they could not navigate the process to get their drugs approved.

The small fraction of people who appealed their coverage denials, won a partial or total reversal nearly three out of four times (73 percent). But, the overwhelming majority of people whose claims were denied did not appeal. The goal should be for the Medicare Part D plans to have systems in place that eliminate the wrongful denials in the first place.

In short, Medicare Part D plans sometimes engage in inappropriate denials or delays of medications for people with Medicare. The OIG recommends that CMS take action: 1) so that communication improves between Part D plans and prescribers to minimize avoidable rejections at the pharmacy and denials of coverage; and, 2) to reduce inappropriate pharmacy rejections and inappropriate coverage denials. It further recommends that CMS notify people with Medicare about inappropriate denials and other performance problems by Part D plans.

CMS agreed with all four recommendations. But, CMS has been misleading people with Medicare about Medicare Advantage over the last few years. Time will tell if CMS acts on these recommendations.

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