OIG: CMS Needs to Stop Paying for Some Hospice-Related Drugs Twice

The Centers for Medicare & Medicaid Services (CMS) needs to do more to make sure taxpayer dollars aren’t being wasted when it comes to paying for hospice patients’ drugs, a report released Tuesday by the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) found.

As part of an ongoing audit effort, OIG examined whether the Medicare Part D program paid for drugs during 2016 that should have otherwise been paid for by hospice organizations under the Medicare Part A hospice benefit. Broadly, Medicare Part D is an optional program to help Medicare beneficiaries pay for self-administered prescription drugs through prescription drug insurance premiums.

After reviewing hundreds of Medicare records and following up with hospice organizations, OIG found that Part D ended up covering more than $160 million in drugs hospices should have picked up themselves.


“CMS must do more to avoid paying twice for the same drugs,” OIG watchdogs wrote.

To avoid payment confusion, CMS should work directly with hospices to ensure that they are providing drugs covered under the hospice benefit, OIG advised. Additionally, CMS should develop and execute a strategy to better ensure Part D doesn’t pay for things it shouldn’t be paying for.

OIG’s new findings only underscore what officials already knew.


In 2012, OIG issued a report to CMS noting that, in 2009, Medicare Part D paid nearly $34 million for prescription drugs that likely should have been covered by hospice organizations. Meanwhile, hospice beneficiaries that year paid $3.8 million for drugs that hospices should have paid for.

“While CMS agrees with the importance to avoid duplicate payments to Medicare Part D drug plan sponsors and hospices, we maintain that CMS’s current efforts will address the issue and help ensure there is no disruption in beneficiary access,” agency officials commented to OIG in response to its recommendations. “As such, CMS will continue to engage in meaningful activities to reduce duplicate payment in this area, such as ensuring hospice providers are proactively educating beneficiaries on covered services and items (including drugs) and Part D drug plan sponsors are appropriately applying prior authorization criteria and coordinating with hospice providers on drug coverage issues.”

In general, Tuesday’s OIG report is an opportunity to revisit Medicare Part D policy and further clarify hospice billing and payment practices related to medications their patients depend on, according to the National Hospice and Palliative Care Organization (NHPCO).

“NHPCO agrees that hospice providers should be held responsible for drugs that are related to the terminal diagnosis and related conditions,” the Washington, D.C.-based advocacy organization stated.

Still, there may be instances where a drug is no longer effective, but the patient may still choose to continue and pay privately for it, NHPCO noted.

Moreover, there may be instances where a drug is not related to the terminal illness and related conditions, meaning it should be billed separately to Medicare Part D.

NHPCO plans to further review the OIG report and conduct an in-depth examination of its audit.

Written by Robert Holly