On February 6, 2014, the U.S. Department of Health & Human Services (“HHS”) Office of Inspector General (“OIG”) released its annual 2014 Work Plan.  In addition, the OIG has posted a 25-minute video vignette featuring senior OIG executives discussing the OIG’s top priorities for fiscal year 2014.  The OIG annually publishes a Work Plan that summarizes new and ongoing reviews and activities that OIG plans to pursue during the applicable fiscal year.  Among other things, the 2014 Work Plan includes a number of new items (since the 2013 Work Plan) relevant to prescription drugs, including the following proposed audits:

  • Manufacturer reporting of average sales prices for Part B drugs
    • “We will determine the potential effect on average sales price reporting if all manufacturers of Part B-covered drugs were required to submit ASPs to CMS. We will also determine whether CMS has improved its process for collecting ASP data, as we previously recommended.”
  • Part B payments for drugs purchased under the 340B Program
    • “We will determine how much Medicare Part B spending could be reduced if Medicare were able to share in the savings for 340B-purchased drugs.”
  • Covered uses for Medicare Part B drugs
    • “We will review the oversight actions CMS and its claims processing contractors take to ensure that payments for Part B drugs meet the appropriate coverage criteria. We will also identify challenges contractors face when making coverage decisions for drugs.”
  • Payment for compounded drugs under Medicare Part B
    • “We will examine MACs’ policies and procedures for reviewing and processing Part B claims for compounded drugs and assess the appropriateness of such claims.”
  • Comparison of Medicare Part D and Medicaid pharmacy reimbursement and rebates
    • “This review, which is a followup to previous work, will compare pharmacy reimbursement and rebate amounts for a sample of brand-name drugs paid by Medicare Part D and by Medicaid.”

The Work Plan also indicates that the OIG will continue to review a number of issues identified in the 2013 Work Plan, including, among other things:

  • Manufacturer safeguards to prevent the use of copayment coupons for drugs paid for by Part D
  • Medicare Part D Plan Sponsor reporting of direct and indirect remuneration
  • States’ methods for resolving Medicaid Drug rebate disputes with manufacturers
  • Manufacturer compliance with Medicaid Average Manufacturer Price (AMP) reporting requirements; and
  • Medicaid Drug Rebates for new formulations of existing drugs.

The inclusion of an item in the OIG Work Plan does not necessarily mean that OIG will seek enforcement with regard to that item, or that all interested parties will be contacted by the OIG in connection with a review.  In addition, the OIG may (and often will) evaluate individuals and companies in connection with issues that are not listed in the Work Plan.  However, the inclusion of an item Work Plan does indicate that the OIG is actively interested in learning more about the topic listed.  OIG audits and evaluations often result in enforcement and/or policy recommendations to the applicable agency (such as the Centers for Medicare & Medicaid Services), and thus the Work Plan is a good point of reference in considering targeted areas of focus and audit for internal compliance departments.

Posted by Kathleen Peterson

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