By Lee P. Dunham, J.D.
An OIG report looks at beneficiaries may have been denied drug coverage requests for avoidable or inappropriate reasons.
On September 6, 2019, the U.S. Department of Health and Human Services Office of Inspector General (OIG) released a Report in Brief summarizing its findings that Medicare Part D insurance companies ("sponsors") had rejected prescriptions presented at pharmacies, or denied drug coverage requests, for avoidable or inappropriate reasons, forcing Part D beneficiaries to take extra steps to obtain their prescribed drugs (OIG Report, September 20, 2019).
Due to concerns that sponsors were inappropriately rejecting prescription or coverage requests for Part D beneficiaries, OIG collected and analyzed data from 2017 and found that sponsors had, in fact, frequently rejected such requests. The high number of rejections that were overturned after appeal indicated that the initial rejections were improper and avoidable. OIG recommended a number of steps for CMS to take to remedy the problem, including improving electronic communication between sponsors and prescribers, taking steps to reduce inappropriate rejections, and providing beneficiaries with information about sponsor performance problems.
Part D is an optional benefit that helps its more than 45 million beneficiaries pay for medically necessary prescription drugs. It has a shared-risk payment model that can create an incentive for sponsors to deny requests for prescription drugs in an attempt to increase profits, which could contribute to physical or financial harm for many Medicare beneficiaries. To investigate this issue, OIG collected and analyzed 2017 data on pharmacy rejections and on coverage denials, appeals, and appeal outcomes, together with data from the independent entities that review the higher levels of Part D appeals. OIG found that in 2017, sponsors’ automated systems rejected millions of prescriptions presented at pharmacies, but overturned 73 percent of drug-coverage denials when beneficiaries appealed, and that some of these rejections could have been avoided if the prescribed drugs were on the approved drug lists, met requirements, or received any required preapprovals.
The rejections could have forced beneficiaries to file coverage requests, pay out of pocket, or contact their providers to request different drugs, delaying or deterring them from accessing needed drugs. OIG recommended that CMS improve electronic communication between Part D sponsors and prescribers to reduce avoidable pharmacy rejections and coverage denials, take action to reduce inappropriate pharmacy rejections and inappropriate coverage denials, and provide beneficiaries with information about sponsor performance problems, including those related to inappropriate pharmacy rejections and coverage denials. CMS concurred with these recommendations.
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