Audit Finds Medicare Improperly Paid for Viagra

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An audit by the Office of Inspector General (OIG) for the U.S. Department of Health and Human Services found the U.S. Medicare program improperly spent more than $3 million in 2007 and 2008 to buy Viagra and other erectile dysfunction drugs for senior citizens.

Erectile dysfunction (ED) drugs have been excluded from the approved Part D drug list effective January 1, 2007 . Exceptions are made when the drug is used “to treat a condition, other than sexual or erectile dysfunction, for which the drug has been approved by the Food and Drug Administration” (FDA). This would include conditions such as pulmonary hypertension for which the drug has been approved by FDA.

The objective of the audit was to determine the extent to which CMS accepted prescription drug event (PDE) data that sponsors submitted for ED drugs used for the treatment of sexual or erectile dysfunction.

Drug companies are required to submit PDE data every time a beneficiary fills a prescription covered under Part D to the Centers for Medicare & Medicaid Services (CMS). This data includes drug cost and payment information. Final PDE data are required to be submitted within 6 months after the end of the coverage year.

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The audit found that of approximately $133 billion in gross drug costs for calendar years (CY) 2007 and 2008, CMS accepted PDE data totaling $3,107,200 in gross drug costs for ED drugs approved only for the treatment of sexual or erectile dysfunction.

According to Federal requirements, these payments were improperly made as Part D should not have covered these drugs.

CMS officials noted a software error as the reason for the improper payments. The software edit in place during the audit period enabled CMS to identify and reject PDE data that sponsors submitted for ED drugs prescribed for the treatment of sexual or erectile dysfunction.

CMS officials reported this edit did not prevent CMS from accepting PDE data for some ED drugs in CY 2007 and most of CY 2008 because the Part D program used an incomplete list of excluded drugs as the basis for the edit.

Medicare’s administrators told the inspector general that they would fix the flaw by updating computer databases with codes for the prohibited drugs. Medicare also paid for an undetermined amount for erectile dysfunction drugs in 2009 and 2010.

Source
Review of Erectile Dysfunction Drugs in the Medicare Part D Program (A-07-10-03143); Centers for Medicare and Medicaid Services (CMS); March 2, 2011

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