June 3, 2009

Medicare Part D Payments for Beneficiaries in Part A Skilled Nursing Facility Stays in 2006

The federal Department of Health and Human Services Office of the Inspector General (OIG) sought to determine the extent to which Medicare Part D paid for drugs for beneficiaries in Part A skilled nursing facility (SNF) stays in 2006. The OIG researchers found that in 2006, about $75 million in medications billed to Medicare Part D was for beneficiaries in skilled nursing facility stays covered by Medicare Part A. The majority of the payments were likely inappropriate because Medicare Part D provides outpatient prescription drug coverage for Medicare beneficiaries who enroll.

Part D covers most prescription drugs; however, it excludes drugs that are covered under Medicare Parts A or B. Specifically, Part D excludes drugs for beneficiaries in Part A SNF stays if the drugs were for use in the facility or to facilitate the beneficiaries' discharge. The Centers for Medicare & Medicaid Services (CMS) has identified duplicate payments by Medicare Parts A and D as a potential vulnerability. CMS further states that billing multiple payers (e.g., Parts A and D) for the same prescription is an example of pharmacy fraud, waste, and abuse.