Entries in Inspector General (1)


HHS IG: 'Staggering Waste' as Insurers Overcharge Medicare, Patients

Dynamic Graphics/Thinkstock(WASHINGTON) -- 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 U.S. Department of Health and Human Services Inspector General (HHS IG) found that some insurers failed to report all the rebates they received. They also 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. Benificiaries, however, get nothing back.

Copyright 2011 ABC News Radio

ABC News Radio