U.S. Department of Health and Human Services  
Office of Inspector General
   
 
ENSURING THE 
INTEGRITY OF 
 
MEDICARE PART D 
 
June 2015  An OIG Portfolio 
        OEI-03-15-00180 
This portfolio presents an overview of Office of Inspector 
General (OIG) investigations, audits, evaluations, and legal guidance 
related to Part D.  It synthesizes numerous OIG reports that have 
identified weaknesses in Part D program integrity, and provides 
updates on Departmental efforts to address these weaknesses.  In 
particular, OIG has identified weaknesses in the use of data to identify 
  vulnerabilities, as well as in the oversight by all parties responsible for 
protecting Part D:  Part D plan sponsors, the Medicare Drug Integrity 
Contractor, and the Centers for Medicare & Medicaid Services (CMS).  
OIG has made recommendations to strengthen Part D program 
integrity, and progress has been made.  However, Part D remains 
vulnerable to fraud, as evidenced by ongoing investigations.  To fully 
protect Part D from fraud, waste, and abuse, CMS should take further 
action and implement OIGs unimplemented recommendations.  
 
     
 
 
Office of Inspector General
http://oig.hhs.gov  
 
The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-452, as  
amended, is  to protect the integrity of the Department of  Health and Human Services (HHS)  
programs, as  well as  the health and welfare  of  beneficiaries served by  those programs.  This 
statutory mission  is  carried  out through a nationwide  network of audits, investigations, and 
inspections conducted by  the following operating components: 
Office of Audit Services 
The Office  of  Audit Services  (OAS) provides auditing services  for HHS, either by  conducting  audits  
with its own audit resources or by overseeing audit work done by others.  Audits examine the 
performance of  HHS programs and/or its grantees and contractors in carrying  out their respective 
responsibilities and are intended  to provide independent assessments of HHS programs and  
operations.  These assessments help reduce  waste, abuse, and  mismanagement and promote economy 
and efficiency throughout HHS. 
Office of Evaluation and Inspections 
The Office  of  Evaluation and Inspections (OEI)  conducts national evaluations to  provide HHS, 
Congress, and the public with timely, useful, and reliable information on  significant  issues.  These 
evaluations focus on preventing fraud,  waste,  or  abuse and promoting economy, efficiency, and 
effectiveness of departmental programs.  To promote impact,  OEI reports also present practical 
recommendations for improving program operations. 
Office of Investigations  
The Office of Investigations (OI) conducts criminal, civil, and administrative investigations  of fraud 
and misconduct related to HHS  programs, operations, and beneficiaries.  With  investigators working  
in all 50  States and  the District  of Columbia, OI utilizes its resources by  actively coordinating with 
the Department  of  Justice and other Federal, State, and local law enforcement  authorities.  The 
investigative efforts of  OI often lead to criminal convictions, administrative sanctions, and/or civil 
monetary penalties.  
Office of Counsel to the Inspector General 
The  Office of Counsel to the Inspector General (OCIG)  provides  general legal services  to  OIG, 
rendering advice and opinions on HHS programs  and operations and  providing all legal support for 
OIGs internal operations.   OCIG represents  OIG in all civil and administrative fraud and abuse 
cases involving HHS programs, including False Claims Act, program exclusion, and civil monetary  
penalty cases.  In connection with these cases,  OCIG also  negotiates and  monitors corporate integrity 
agreements.  OCIG renders advisory opinions, issues compliance program guidance, publishes fraud 
alerts, and provides  other guidance to  the health care industry concerning the anti-kickback statute 
and other OIG enforcement  authorities. 
 
 
 
   
     
 
Table of Contents 
 
Background ............................................................................................................ 1 

 
Summary Findings................................................................................................. 5
  
CMS is missing opportunities to leverage data to identify fraud, waste, and  

abuse ....................................................................................................................... 5 
 
CMS and plan sponsor oversight is not sufficient to protect Part D ......................... 8 

Part D remains vulnerable to fraud  ........................................................................ 13 

 
Unimplemented OIG Recommendations for Part D Program Integrity ........... 16 

 
Appendixes........................................................................................................... 19 

Appendix A:  Highlighted OIG Reports on Part D Program Integrity ...................... 19 

Appendix B:  Highlighted OIG Products on Part D Program Integrity .................... 21 

 
Endnotes............................................................................................................... 23 

 
Acknowledgments ............................................................................................... 26
  
 
 
   
     
 
  BACKGROUND
  
 
What is Medicare  The Medicare Part D Program 
Part D?    The Medicare Prescription Drug, Improvement, and 
Modernization Act of 2003 established Medicare Part D to 
It is an optional 
provide an optional prescription drug benefit for Medicare 
prescription drug benefit 
beneficiaries beginning January 1, 2006.  Individuals 
available to Medicare 
enrolled in Part D can choose to receive benefits through 
beneficiaries. 
stand-alone prescription drug plans, or through Medicare 
Advantage prescription drug plans that provide integrated 
How many are 
medical coverage, including drugs.  The Centers for 
enrolled in Part D? 
Medicare & Medicaid Services (CMS) contracts with private 
Approximately 
companies, known as plan sponsors, that offer prescription 
39 million beneficiaries  
drug plans to their beneficiaries, with varying drug coverage 
receive Part D benefits 
and cost-sharing requirements.  Most beneficiaries enrolled 
through more than 
in Part D are responsible for certain costs, which may 
2,000 plans sponsored by  
include a monthly premium, an annual deductible, and 
private companies.  
coinsurance or copayments.  
What does Part D 
Key Players in Protecting Part D 
cost?  
CMS relies on plan sponsors to be the first line of defense 
Payments for Part D  against fraud, waste, and abuse in Part D.  Plan sponsors 
drugs are approximately  are responsible for paying claims, monitoring billing patterns, 
$121 billion  per year.  and establishing compliance plans that specify their 
procedures for preventing and detecting fraud, waste, and 
Who oversees 
abuse.  Plan sponsors must also ensure that entities with 
Part D?   which they subcontract (e.g., pharmacies) meet regulatory 
Part D plan sponsors are  and compliance requirements. 
responsible for 
CMS also contracts with a private company to serve as the 
monitoring and paying 
Medicare Drug Integrity Contractor (MEDIC) to detect and 
Part D drug claims.  CMS 
prevent fraud, waste, and abuse in Part D.  The MEDICs 
is responsible for 
responsibilities include identifying and investigating potential 
overseeing the program, 
fraud and abuse, referring cases to law enforcement, and 
and has contracted with 
fulfilling requests for information from law enforcement.  The 
the MEDIC to perform 
MEDIC is required to investigate potential fraud and abuse 
program integrity 
referred to it through external sources, such as complaints, 
functions.  
as well as identify potential fraud and abuse through 
 
proactive methods, such as data analysis.  
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Ultimately, CMS is    
KEY PLAYERS IN  SAFEGUARDING  
responsible for ensuring 
PART  D 
Part D program integrity.  CMS 
Oversees the 
CMS oversees the plan 
MEDIC  Part D 
sponsors and the MEDIC, 
Performs   program, 
defines their requirements  Plan sponsor  program  including plan 
for carrying out program  Pays claims  integrity sponsors and
and prevents, functions on  the MEDIC. 
integrity functions, and 
identifies, and  behalf of CMS. 
monitors their  responds to
performance.   fraud. 
Office of Inspector General (OIG) Work in Part D 
In the 9 years since Part D began, OIG has produced a wide range of 
investigations, legal guidance, audits, and evaluations related to Part D program 
integrity.  This work has resulted in the prosecution of individuals accused of 
defrauding Part D, as well as the identification of systemic program vulnerabilities 
that raise concerns related to quality of care and improper payments.  To assist in 
identifying potential fraud and other emerging issues, OIG has established a 
Hotline at 1-800-HHS-TIPS as a resource for individuals to submit tips and 
complaints regarding potential fraud, waste, and abuse.  
OIG has seen an increase in Part D fraud complaints.  OIG has investigated cases 
involving multiple co-conspirators, including health care professionals, patient 
recruiters, pharmacies, and beneficiaries.  In one example, a pharmacy benefits 
manager settled a case for over $2 million involving allegations of fraudulent Part D 
claims.  Part D fraud can result in financial losses to the program and patient harm 
when prescription drugs are not used as intended.  As such, OIG has made Part D 
fraud a top priority.  This effort includes cases of non-controlled drugs being billed 
but not dispensed, in which beneficiaries obtain prescriptions for high-cost 
medications in exchange for monetary kickbacks. 
OIG also has issued legal 
EXAMPLES OF  PART  D  FRAUD  
guidance as part of its efforts to 
DRUG DIVERSION  individual obtains prescription 
curtail fraudulent and illegal 
drugs and gives or sells them to someone else. 
activities.  For example, shortly 
DOCTOR SHOPPING   beneficiary consults a 
before the implementation of 
number of doctors to inappropriately obtain 
multiple prescriptions.   Part D, OIG issued a Special 
Advisory Bulletin regarding 
INDUCEMENTS, KICKBACKS, OR BRIBES   
prescriber receives unlawful payments as   pharmaceutical manufacturers 
inducement or reward for writing prescriptions.   patient assistance programs for 
INAPPROPRIATE DISPENSING   pharmacy   Medicare Part D beneficiaries.  In 
dispenses expired or adulterated prescription  2014, OIG also issued a 
drugs, or dispenses drugs without a prescription.  
Supplemental Special Advisory 
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Bulletin that expanded upon this issue, as well as a Special Advisory Bulletin 
regarding the anti-kickback statute implications when pharmaceutical 
manufacturers offer copayment coupons to Part D beneficiaries. 
In addition to these enforcement and guidance efforts, OIG has conducted audits 
and evaluations that identify systemic weaknesses that make Part D fraud and 
abuse possible.  The program integrity vulnerabilities that OIG has identified relate 
to the three key players charged with safeguarding the program:  plan sponsors, 
the MEDIC, and CMS.  OIG audits have examined the adequacy of oversight 
mechanisms, such as plan sponsors internal claims processing edits to prevent 
improper payments.  OIG evaluations have reviewed plan sponsor, MEDIC, and 
CMS oversight of Part D, such as the adequacy of the data that CMS requires plan  
sponsors to submit, and how effectively data are being used to target program 
integrity efforts. 
The findings and recommendations developed through this body of work have led 
OIG to conclude that Part Ds underlying vulnerabilities cluster around two issues 
involving all three levels of program oversight (plan sponsors, the MEDIC, and 
CMS):  (1) the need to more effectively collect and analyze program data to 
proactively identify and resolve program vulnerabilities and prevent fraud, waste, 
and abuse before it occurs; and (2) the need to more fully implement robust 
oversight designed to ensure proper payments, prevent fraud, and protect  
beneficiaries.   
Over the last 9 years, plan sponsors, the MEDIC, and CMS have taken steps to 
address OIG recommendations in these areas, and progress has been made.  
However, Part D remains vulnerable to fraud, as evidenced by ongoing 
investigations and an analysis of claims data that OIG is releasing in tandem with 
this portfolio.  The OIG data brief, Questionable Billing and Geographic Hotspots 
Point to Potential Fraud and Abuse in Medicare Part D (OEI-02-15-00190), finds 
substantial growth in spending for Part D drugs, especially for commonly abused 
opioids.  It also identifies questionable billing by pharmacies that may indicate 
fraudulent activity.  This data brief further identifies geographic hotspots for certain 
drugs, where average Medicare payments per beneficiary are higher than average 
payments nationwide. 
To continue improving Part D program integrity, CMS should take action to fully 
implement OIGs recommendations.  OIG has prepared this portfolio to document 
key progress in addressing Part D program vulnerabilities and to highlight our 
unimplemented recommendations in this area.  OIG will continue to monitor these 
vulnerabilities and other emerging Part D program integrity issues.  
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Standards 
The work referenced throughout this portfolio was conducted in accordance the 
Quality Standards for Inspection and Evaluation issued by the Council of the 
Inspectors General on Integrity and Efficiency, generally accepted government 
auditing standards, and investigative and legal professional standards, as 
   
applicable. 
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SUMMARY FINDINGS
  
 
CMS
 IS MISSING OPPORTUNITIES TO LEVERAGE 
, ,  
DATA TO IDENTIFY FRAUD  WASTE  AND ABUSE 
Ensuring the integrity of a program as expansive as Part D requires constant and 
proactive efforts to detect and prevent fraud, waste, and abuse.  The availability 
and proactive use of data are essential to identify and address program 
vulnerabilities; identify providers with questionable billing; and meaningfully target 
program integrity resources to the areas of greatest vulnerability.  However, OIGs 
reports have found that the use of data by plan sponsors, the MEDIC, and CMS for 
Part D program integrity purposes has been limited.  This makes Part D vulnerable 
to improper payments, drug diversion, overprescribing, and other quality-of-care 
issues.  
CMS does not require plan sponsors to report information on fraud, 
and most have chosen not to voluntarily report this information 
By requiring plan sponsors to 
PERCENT AGE OF PLAN  SPONSORS TH AT  VOLUNTARILY  
report potential fraud, CMS 
REPORTED DAT A ON  POTENTI AL  FR AUD AND ABUSE 
could enhance its ability to 
review the effectiveness of 
plan sponsors processes for 
40% 
fraud detection.  However,  37% 
35% 
plan sponsors are not 
2010  2011  2012 
required to report to the 
MEDIC or CMS the number 
of specific instances of potential fraud, waste, and abuse they identify, nor the 
actions they took to address these issues.  In lieu of a mandatory requirement to 
report specific instances, CMS established a mechanism for plan sponsors to 
voluntarily report aggregate data to CMS.  Less than half of Part D plan sponsors 
chose to do so between 2010 and 2012.1  
Without specific requirements to report potential fraud, CMS has received  
inconsistent data from plan sponsors, which it cannot effectively use to assess plan 
sponsors program integrity efforts.  The wide variation in voluntarily reported fraud 
incidents could reflect differences in actual fraud among plan sponsors, or  
disparities in the actions plan sponsors take to identify and address incidents of 
fraud, waste, and abuse.  CMS also does not require plan sponsors to report 
information on the steps they took after identifying instances  of potential fraud and 
abuse, such as initiating inquiries and taking corrective actions.  Without this 
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information, CMS cannot hold plan sponsors accountable for protecting Part D 
from fraud, waste, and abuse.2  
When OIG requested plan sponsor information on potential fraud, waste, and 
abuse for the first 6 months of 2007, we found that the number of identified 
incidents varied significantly.  In fact, 28 percent of stand-alone plan sponsors did 
not identify any potential fraud and abuse.  Most potential incidents of fraud and 
abuse were associated with only a small number of plan sponsors.  The low level 
of fraud identified by some plan sponsors raises questions about the sufficiency of 
their fraud and abuse detection programs.  Furthermore, OIGs review found that 
among those plan sponsors that identified potential fraud and abuse, not all of 
them used this information to conduct inquiries, initiate corrective actions, or make 
referrals for further investigation.3  
OIG found similar results for Medicare Advantage plans that include Part D 
coverage:  34 percent of these organizations did not identify any potential Part D 
fraud and abuse in 2009, and those that did identified between 1 and 
100,909 incidents (with a median of 15 incidents).4 
Progress Update:  Plan Sponsor Reporting of Data 
CMS stated that it has begun sharing plan sponsors 
  
voluntarily reported data on potential fraud, waste, and abuse with 

the MEDIC. 
 
However, CMS does not require plan sponsors to report 

information on instances of potential fraud, waste, and abuse, or 

the actions plan sponsors take in response to such instances.  

Without this information, CMS and the MEDIC are hindered in 

their ability to ensure that plan sponsors are adequately fulfilling 

their program integrity functions. 
 
The MEDIC does not capitalize on proactive data analysis to detect 
fraud, waste, and abuse 
OIG has found that the MEDIC has not taken full advantage of the data it has at its 
disposal.  OIG reviews found that the MEDIC used proactive data analysis to 
initiate only a small percentage of investigations and case referrals, and instead 
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relied on external sources  
PERCENTAGE OF MEDIC   (e.g., beneficiary complaints through 
INVESTIGATIONS, BY METHOD INITIATED   the MEDICs toll-free number) to 
identify most incidents of potential 
fraud and abuse.5  
QUESTIONABLE BILLING WENT 
UNDETECTED.   When OIG 
conducted its own proactive 
96%  90%  analyses of Part D claims, we 
identified potentially problematic 
billing patterns.  The results of these  
analyses raise concerns about the 
extent to which all Part D entities 
are using data for oversight 
4%  10% 
purposes, and whether further 
2008  2011  improper billing is going  undetected.  
One OIG report found that a number 
Proactive  External Sources 
of retail pharmacies had 
questionable billing patterns, such 
Note: This graph compares MEDIC activities during fiscal 
as extremely high dollar amounts or 
year 2008 to activities from April 2010 through March 2011.  
numbers of prescriptions per 
beneficiary or per prescriber, which could indicate that the drugs were not 
medically necessary or were never provided.6  
OIG has identified questionable billing by physicians (over 700 physicians, most of 
whom ordered extremely high percentages of drugs with the potential for abuse) 
and also on behalf of beneficiaries (over 1,500 beneficiaries  with questionable 
utilization patterns for HIV drugs).  These beneficiaries did not have an HIV 
diagnosis or indication of HIV treatment in their claims histories, received an 
excessive dose or supply of HIV drugs, and/or received HIV drugs from a high 
number of pharmacies or prescribers.  CMS and plan sponsors have drug 
utilization review and monitoring programs that are designed to address 
inappropriate utilization and place restrictions (such as quantity limits) on 
beneficiaries receiving certain drugs.  However, OIGs analysis showed that there 
are additional drugs susceptible to fraud, waste, and abuse that are not affected by 
these restrictions.7  
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Progress Update:  Proactive Data Analysis 
In response to OIGs report that highlighted the need for more 
proactive analysis, CMS and the MEDIC developed a Pharmacy 
Risk Assessment tool and shared this information with plan 
sponsors for their use in conducting additional analysis.  The 
MEDIC also reviewed pharmacies with questionable billing as 
identified by OIG to determine what actions needed to be taken.  
The MEDIC has been given access to claims data from Medicare 
Parts A and B, which will enhance its ability to identify and 
investigate potential fraud and abuse.  Although the MEDIC still 
does not initiate a majority of its investigations through proactive 
methods, OIG reviews found that it has increased the percentage 
it initiates proactively.  
When beneficiaries are associated with a high number of 
pharmacies or prescribers, it may be an indication of fraud, 
abuse, or inappropriate utilization of prescription drugs.  CMS 
could expand drug utilization review programs to include 
additional drugs susceptible to fraud, waste, and abuse.   CMS 
also could analyze claims data to identify beneficiaries whose  
utilization appeared aberrant and seek statutory authority to 
restrict certain beneficiaries to a limited number of pharmacies or 
prescribers.  This practice is commonly referred to as lock-in  
and has been successfully implemented by some State Medicaid 
programs.  
CMS
 AND PLAN SPONSOR OVERSIGHT IS NOT 
P D 
SUFFICIENT TO PROTECT  ART 
Each entity involved in Part D has a role in detecting and preventing fraud, waste, 
and abuse.  Plan sponsors have the primary responsibility for reviewing and paying 
claims.  As such, they must have adequate controls in place to prevent improper 
payments.  CMS, in turn, must exercise proper oversight of both the plan sponsors 
and the MEDIC to ensure that those entities are working to reduce the programs 
 
vulnerability to fraud, waste, and abuse. 
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LAYERS OF PART  D  OVERSIGHT TO PREVENT PAYMENTS   
FOR FRAUD,  WASTE, AND  ABUSE  
 
 
 
 
 
 
 
  CMS does not 
 
   adequately oversee 
e
s MEDIC does not  Part D and allows      
u inappropriate payment 
identify or investigate 
b
A the claim 
  Plan sponsor does
or not effectively 
  monitor the claim  CMS 
,
e identifies 
st MEDIC's  inappropriate 
a analysis  payment 
W identifies  through its
,  Plan  inappropriate oversight
d sponsor payment and  reviews 
u monitors  makes referral  
ra effectively to  for further 
F detect and  action 
prevent 
payment 
Plan sponsors do not have adequate controls to prevent improper 
payments 
OIG has found that plan sponsors processes have sometimes compromised their 
ability to detect, correct, and prevent fraud, waste, and abuse.  In addition, CMS is 
ultimately responsible for ensuring the integrity of Part D, but it has not exercised 
sufficient oversight of plan sponsors to prevent improper payments.8  
OVER $1 BILLION IN PART D PAYMENTS WERE MADE FOR DRUG CLAIMS WITH 
INVALID PRESCRIBER IDENTIFIERS.   Prescriber identifiers are the only data on 
Part D drug claims that indicate whether a drug was prescribed by a legitimate 
practitioner, and are therefore an important tool for payment reviews and fraud 
investigations.  However, OIG found that plan sponsors and CMS did not institute 
adequate procedures or oversight to identify claims with invalid prescriber 
identifiers.  In fact, Part D paid $1.2 billion for claims with invalid prescriber 
identifiers in 2007.  Approximately $20.6 million was paid in 2007 for Schedule II 
drug claims with invalid prescribers; these drugs have a high potential for abuse 
and diversion.9  
OIG also has found that Part D inappropriately paid for drugs ordered by 
individuals who clearly do not have the authority to prescribe, such as massage 
therapists and athletic trainers.  This vulnerability also has drug diversion 
implications, as tens of thousands of drugs ordered by individuals without 
prescribing authority were controlled substances.10  
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MEDICARE PAYMENTS FOR DRUGS ORDERED BY PRACTITIONERS  
WITHOUT THE AUTHORITY TO  PRESCRIBE,  2009   
$1,684,988 
$1,085,699 
$798,991  $694,288 
Dietitian and  Audiologist or  Hearing/  Massage   Athletic  
Nutritionist  Speech-Related Service  Therapist  Trainer 
EXCLUDED PROVIDERS HAVE  CONTINUED TO PRESCRIBE PART D DRUGS.   A health 
care provider may be excluded from participation in Federal health care programs 
when convicted of a criminal offense related to patient abuse or neglect, or related 
to the misuse of controlled substances, among other reasons.  It is therefore 
important that claims for drugs prescribed by excluded providers be denied to 
protect beneficiaries from inappropriate or even harmful services.  However, OIG 
found that controls failed to prevent Part D payments for drugs prescribed by 
excluded providers.  Specifically, there is no claims processing edit that will reject 
prescription drug event (PDE) records for prescriptions written by excluded 
providers.  CMS accepted PDE data from plan sponsors with gross drug costs 
totaling $15 million over a 3-year period for prescriptions written by excluded 
providers, contrary to Federal law.11  
PART D INAPPROPRIATELY PAID FOR SCHEDULE II DRUGS BILLED AS REFILLS,  
PRESENTING  A RISK FOR DRUG DIVERSION AND  ABUSE.   Schedule II drugs are 
particularly susceptible to abuse and diversion, and present a risk to Part D and its 
beneficiaries.  OIG has found that plan sponsors frequently lack adequate controls 
to prevent Schedule II drug refills, which 
are prohibited by Federal law to control 
access to these drugs.  CMSs oversight  SCHEDULE II  drugs have a high 
potential for abuse and diversion, and 
also has not been sufficient to prevent 
are considered dangerous.  Using 
these potentially inappropriate payments.  
Schedule II drugs can potentially lead 
Allowing Schedule II refills may result in  to severe psychological or physical 
the diversion of controlled substances or  dependence. Examples of 
Schedule II drugs include oxycodone, 
drug misuse, both of which have public 
fentanyl, meperidine, and 
health implications.  In 2009, Part D 
amphetamine.  
inappropriately paid $25 million for 
Schedule II drugs billed as refills.12  
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PAYMENTS AFTER BENEFICIARIES DEATHS  MAKE  PART  D VULNERABLE TO FRAUD.   
CMS had insufficient safeguards to prevent payments after beneficiaries deaths.  
Between 2006 and 2007, CMS paid approximately $3.6 million on behalf of 
deceased beneficiaries.  After CMS reported implementing an automated process 
to prevent these payments, it still allowed Part D payments on behalf of  
5,101 deceased beneficiaries in 2011.  These claims present a risk to Part D, as 
health care fraud schemes have involved providers or suppliers submitting claims 
for deceased beneficiaries.13  
Progress Update:  Controls to Prevent Improper Payments  
INVALID PRESCRIBERS:  CMS now requires plan sponsors to identify 
invalid prescriber identifiers on Part D drug claims, and submit to 
CMS only claims with valid prescriber identifiers.  CMS also now 
requires plan sponsors to verify that prescribers have the authority 
to prescribe.  In addition, CMS has increased monitoring of 
prescribers through the MEDIC and has begun identifying claims  
related to providers without prescribing authority.  
EXCLUDED PROVIDERS:  CMS provided data to plan sponsors that 
will help identify claims for prescriptions from excluded providers.  
CMSs contractors have conducted audits of excluded providers in 
the Part D program.  
SCHEDULE II  DRUGS:  Plan sponsors have reported strengthening 
their controls, and CMS has expanded its guidance to plan 
sponsors and providers regarding proper billing of these drugs. 
Through its contractors, CMS has conducted an audit of refills of 
controlled substances in the Part D program.  
DECEASED BENEFICIARIES:  CMS recouped some Part D payments 
that OIG determined were made after beneficiaries deaths.  
INVALID PRESCRIBERS:  The effectiveness of improved controls to 
prevent invalid prescribers has not yet been evaluated.  The 
Medicare Access and CHIP Reauthorization Act of 2015 (the  
MACRA) requires OIG to undertake this evaluation.  
EXCLUDED PROVIDERS:  CMS has not implemented a claims  
processing  edit to reject PDE data for prescriptions written by 
excluded providers.  
SCHEDULE II  DRUGS:   CMS has not taken action to exclude 
Schedule II refills when calculating payments to plan sponsors at 
the end of each year.  
DECEASED BENEFICIARIES:  Congress has recognized that more 
needs to be done to prevent Part D improper payments.  The 
MACRA requires CMS to establish procedures to ensure that  
Part D payments are not made for claims on behalf of deceased 
beneficiaries, and that OIG evaluate those efforts. 
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CMS has not leveraged all oversight tools to protect Part D 
CMS has not done all it could to oversee plan sponsors.  For instance, CMS 
conducts summary analyses of plan sponsor-reported data but does not use these 
data to monitor or oversee plan sponsors.  When sponsors voluntarily reported 
data on incidents of potential fraud and abuse, CMS did not follow up with plan 
sponsors about their fraud and abuse detection activities.  CMS also did not use 
these data to determine the reasons for variation in plan sponsors reporting of 
fraud and abuse.14  
Furthermore, CMS is unable to fully evaluate the MEDICs proactive workload 
because it does not capture the percentage of investigations or case referrals that 
are based on proactive methods.  In addition, when law enforcement agencies do 
not accept the MEDICs case referrals, there are no established procedures to 
recommend recoupment of inappropriate payments.  CMS has no mechanism to 
recover the inappropriate payments in these cases.15  
Finally, OIG reports have identified weaknesses in CMSs oversight of plan 
sponsors compliance plans.  These compliance plans provide the roadmap for 
sponsors' efforts to prevent and detect fraud, waste, and abuse.  However, during 
the initial implementation of Part D, CMS conducted limited audits of compliance 
plans, and OIG determined through its own review that the compliance plans did 
not always address all CMS requirements.  CMS has since requested that plan 
sponsors complete self-assessments of their compliance plans.  However, without 
rigorous CMS oversight, these self-assessments will not ensure compliance with all 
requirements.  This points to the need for additional CMS oversight of plan 
sponsors to ensure effective implementation of compliance plans, one of the 
primary tools for Part D program integrity.16 
 
 
Progress Update:  Oversight Tools 
The MEDIC has been given new regulatory authority  
(42 CFR  423.505(i)(2)(ii)) to request and collect directly from  
entities (such as pharmacies) information that it needs to 
identify and investigate potential fraud and abuse.  Previously, 
the MEDIC was unable to always request this information 
directly from those entities, which hindered its oversight efforts. 
CMS has not enhanced the MEDICs data reporting 
requirements in a way that would strengthen CMSs oversight.  
Furthermore, when the MEDIC refers cases involving 
inappropriate services to law enforcement, CMS still has no 
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mechanism  to recover those payments if law enforcement 
agencies decline to accept the case.  
CMS also could use plan sponsor-reported information to 
determine the effectiveness of plan sponsors fraud and abuse 
detection programs, and determine why certain sponsors 
report especially high or low volumes of potential fraud and 
abuse incidents.  Finally, CMS could perform  more extensive 
auditing to ensure that plan sponsors compliance plans 
address all requirements.   
 
P D  
ART   REMAINS VULNERABLE TO FRAUD 
OIG investigates prescription drug diversion and other types of fraud that  
disproportionately affect the Part D program.  As of May 2015, OIG had  
540 pending complaints and cases involving Part D, a 134-percent increase in the 
last 5 years.  The growth in this casework demonstrates the continued vulnerability 
of the Part D program to widespread fraud.  This fraud could be mitigated or 
avoided through better oversight.   
These investigations have uncovered  serious medical harm to individual patients 
and financial harm to the overall Part D program.  During the last three years 
(FY 2012  FY 2014), OIGs Part D investigations resulted in 339 criminal actions, 
31 civil actions, and over $720 million in investigative receivables.  OIG pursues 
these cases through coordinated Federal and State enforcement efforts, including 
the Medicare Fraud Strike Force teams operating in geographic fraud hotspots 
across the country.17      
OIG Investigates Criminal Network  Criminal networks 
are a pervasive 

One OIG investigation led to the conviction of a 
pharmacist who created an expansive criminal network  problem in Part D 

involving 26 pharmacies and an elaborate web of 

fraud schemes 
physicians, pharmacists, and patient recruiters to 

fraudulently bill nearly $58 million.  This pharmacist paid 

OIG casework has 
kickbacks, bribes, and other inducements to physicians 
identified several Part D 
to write unnecessary prescriptions.  The physicians 
fraud trends, including 
directed patients to fill prescriptions at the 26 pharmacies 
billing for non-rendered 
that the pharmacist controlled.  The pharmacies then 
billed Medicare Part D and Medicaid for unnecessary  services and prescription 
controlled drugs it dispensed to the beneficiaries, and for  drug diversion.  Fraud 
expensive non-controlled drugs that it did not dispense.   associated with the 
The pharmacist was sentenced to 17 years in prison and  billing of non-rendered 
ordered to pay $18.8 million in restitution.  
Part D Program Integrity Portfolio (OEI-03-15-00180)                               13 |  P  a g e   
       
 
services typically involves a pharmacy billing for but not dispensing the prescription 
drug.  Prescription drug diversion is the redirection of prescription drugs for 
illegitimate purposes.  Prescription drug diversion often involves overprescribing of 
controlled drugs, but can also include billing for unnecessary non-controlled 
prescriptions.  Fraud associated with non-controlled substances typically focuses 
on brand-name, high-cost medications, including respiratory, HIV, and 
anti-psychotic medications. 
Additionally, OIGs investigations have identified an increase in organized criminal 
networks committing health care fraud, as well as medical identify theft.  The influx 
of criminal networks has become a pervasive problem in fraud schemes involving 
pharmacies and prescription drugs.  These schemes typically involve kickbacks,  
nominee owners, recruiters, and money laundering.  Cases often involve multiple 
co-conspirators ranging from informal networks of street traffickers to complex 
criminal enterprises comprised of health care professionals, pharmacies, and even 
patients.  
 
Part D beneficiaries can be both victims and perpetrators of fraud 
Part D beneficiaries can be both victims and perpetrators of fraud.  Beneficiaries 
can be harmed by the overprescribing of controlled substances, in some cases, 
leading to death.  On the other hand, a fraud trend prevalent in Part D schemes 
involves beneficiaries who act as complicit patients.  
 
PART  D  FRAUD INVOLVING COMPLICIT PATIENTS  
Beneficiary is Doctor prescribes Beneficiary fills  Beneficiary sells Drug-trafficking 
transported to medically unnecessary prescription drugs  organization sells
doctor's office  unnecessary drug  prescription at  to drug-trafficking prescription drugs 
pharmacy  organization  illegally 
As a result of an OIG investigation, a physician was convicted of prescribing 
oxycodone-based products to complicit patients.  The complicit patients received 
unnecessary prescriptions, filled them at various pharmacies, and sold the pills to  
six different drug-trafficking organizations, which resold the drugs on the street.  
This scheme resulted in the illegal distribution of more than 700,000 opioid pills 
and 1 patient death.  A total of 64 defendants connected to this scheme have been 
sentenced to a combined 254 years in prison.  The physician was sentenced to 
25 years in prison and was ordered to forfeit $10 million.  
Part D Program Integrity Portfolio (OEI-03-15-00180)                               14 |  P  a g e   
       
 
Although beneficiaries can be complicit in prescription drug fraud, they also can be 
victims of medical identity theft, a common element in many schemes investigated 
by OIG.  Medical identity theft in relation to Part D occurs when the personally 
identifiable information (PII) of a beneficiary or prescriber is stolen and used to 
fraudulently bill for prescription 
drugs.  This crime takes many 
OIG Investigates Identity  Theft 
forms but can be accomplished 
by insiders with access  to large  One OIG investigation involved the owner of a 
pharmacy chain who, with the assistance of 
volumes of beneficiary PII, which 
two employees, billed for prescription refills that 
is then sold to prescribers, 
customers had not requested and did not 
recruiters, or pharmacies.   
receive. As soon as the prescriptions were 
eligible for refill, the pharmacy owner and  
The fact that fraud remains 
technicians used the names and insurance 
significant in Part D reinforces the 
identification numbers of hundreds of customers 
need for additional program 
to bill Part D and other insurance programs, and 
integrity actions that will address  created false logs that made it appear as though 
systemic vulnerabilities and  customers had received these drugs.  Expensive 
enhance enforcement efforts.  HIV and cancer medications were targeted most 
often. The pharmacy owner was convicted of 
  health care fraud and aggravated identity theft 
for his role in the $2.5 million scheme.  
 
 
 
 
   
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UNIMPLEMENTED OIG  RECOMMENDATIONS  
FOR PART D  PROGRAM INTEGRITY  
 
As the Part D program continues to evolve, the key to effective oversight is to 
monitor the program and establish methods to detect and prevent fraud, waste, 
and abuse.  Those methods include more proactive use of data, as well as more 
rigorous oversight mechanisms.  OIG has made recommendations to address 
vulnerabilities, and in many instances action has been taken to implement our 
recommendations and strengthen Part D program integrity.  However, more work 
needs to be done to protect the program from fraud, waste, and abuse.  
As the agency charged with administering and overseeing Part D, CMS is 
responsible for improving the programs effectiveness and protecting its 
beneficiaries.  To that end, we are highlighting the following recommendations 
made to CMS in previous OIG reports that remain unimplemented. 
RECOMMENDATIONS TO CMS  REGARDING USE OF DATA  
  Require plan sponsors to report all potential fraud and abuse to CMS 
and/or the MEDIC.  The reporting of this information is voluntary, and OIG 
found that most plan sponsors chose not to report it.  If plan sponsors were 
required to consistently report this information, CMS and the MEDIC could 
more actively monitor plan sponsors efforts to protect Part D from fraud, waste, 
and abuse.  
OIG reports:  
   Less than Half of Part D Sponsors Voluntarily Reported Data on 
Potential Fraud and Abuse (OEI-03-13-00030), March 2014. 
   Retail Pharmacies with Questionable Part D Billing (OEI-02-09-00600), 
May 2012.  
   Medicare Advantage Organizations  Identification of Potential Fraud and 
Abuse (OEI-03-10-00310), February 2012. 
   Medicare Drug Integrity Contractors Identification of Potential Part D 
Fraud and Abuse (OEI-03-08-00420), October 2009. 
   Medicare Drug Plan Sponsors Identification of Potential Fraud and 
Abuse (OEI-03-07-00380), October 2008. 
 
  Require plan sponsors to report data on the inquiries and corrective 
actions they take in response to incidents of fraud and abuse.  When plan 
sponsors identify potential fraud and abuse, they are required to initiate 
inquiries and take corrective actions, as necessary.  However, CMS does not 
Part D Program Integrity Portfolio (OEI-03-15-00180)  	                             16 |  P  a g e   
       
 
require plan sponsors to report data concerning those actions.  When OIG 
requested those data, we found that not all plan sponsors took such actions. 
OIG reports:  
   Medicare Advantage Organizations  Identification of Potential Fraud and 
Abuse (OEI-03-10-00310), February 2012.  
   Medicare Drug Plan Sponsors Identification of Potential Fraud and 
Abuse (OEI-03-07-00380), October 2008. 
 
  Expand drug utilization review programs to include additional drugs 
susceptible to fraud, waste, and abuse.  Drug utilization reviews are 
designed to protect beneficiaries and reduce fraud, waste, and abuse.   
However, CMSs requirements for these reviews apply only to a limited 
selection of drugs.  
OIG report:  
	   Part D Beneficiaries With Questionable Utilization Patterns for HIV 
Drugs (OEI-02-11-00170), August 2014. 
RECOMMENDATIONS TO CMS  REGARDING OVERSIGHT  
  Implement an edit to reject prescriptions written by excluded 
providers.   It is important to deny payments for drugs prescribed by providers 
who have been excluded from participation in Federal health programs, but 
controls failed to prevent these payments in Part D.  
OIG report:  
 	  Review of Excluded Providers in the Medicare Part D Program   
(A-07-10-06004), December 2011. 
 
  Exclude Schedule II refills when calculating final payments to plan  
sponsors at the end of each year.   Schedule II drugs have a high potential 
for abuse and diversion.  Although Federal law prohibits the refilling of  
Schedule II drugs, OIG found that Part D inappropriately paid for these drugs 
billed as refills, raising concerns for public health  and the potential for diversion.  
Furthermore, CMS does not exclude these inappropriate claims when 
calculating its final payments to plan sponsors at the end of each year.  
OIG report:  
 	  Inappropriate Medicare Part D Payments for Schedule II Drugs Billed as  
Refills (OEI-02-09-00605), September 2012.  
 
  Restrict certain beneficiaries to a limited number of pharmacies or 
prescribers.  As a means to more appropriately manage prescription drug  
utilization by beneficiaries, CMS should seek statutory authority to restrict 
certain beneficiaries to a limited number of pharmacies or prescribers when 
warranted by excessive or questionable billing patterns.  This practice is 
Part D Program Integrity Portfolio (OEI-03-15-00180)  	                             17 |  P  a g e   
       
 
commonly referred to as lock-in and has been successfully implemented by 
some State Medicaid programs. 

OIG report:
  
 	  Part D Beneficiaries With Questionable Utilization Patterns for HIV 
Drugs (OEI-02-11-00170), August 2014. 
 
  Develop and implement a mechanism to recover payments from plan 
sponsors  when law enforcement agencies do not accept cases.   
Because of resource limitations, law enforcement agencies cannot accept 
every case referral.  However, CMS has not established a mechanism in 
Part D to recover inappropriate payments when case referrals are not 
accepted by law enforcement.  
OIG report:  
   MEDIC Benefit Integrity Activities in Medicare Parts C and D   
(OEI-03-11-00310), January 2013.  
 
  Determine the effectiveness of plan sponsors fraud and abuse 
detection programs.  If CMS were to require plan  sponsors to consistently 
report information related to their fraud and abuse detection programs, 
CMS could use that information to help evaluate the effectiveness of those 
programs.  CMS also could use this information to determine whether 
variation in plan  sponsor reporting is a natural variation or whether it is 
indicative of problems such as weaknesses in plan  sponsors fraud and 
abuse detection programs, or a lack of common understanding of fraud and 
abuse terms used in reporting.  
OIG reports:  
   Less than Half of Part D Sponsors Voluntarily Reported Data on 
Potential Fraud and Abuse (OEI-03-13-00030), March 2014. 
   Medicare Advantage Organizations  Identification of Potential Fraud and 
Abuse (OEI-03-10-00310), February 2012. 
   Medicare Drug Plan Sponsors Identification of Potential Fraud and 
Abuse (OEI-03-07-00380), October 2008. 
       
  Ensure that plan sponsors compliance plans address all regulatory  
requirements and CMS guidance.  A successfully implemented  
compliance plan can help plan  sponsors protect program integrity.  
However, these plans have not always addressed all requirements, or 
included specific descriptions of how plan  sponsors will actually implement 
the requirements.  
OIG report: 
 
   PDP Sponsors  Compliance Plans (OEI-03-06-00100), 

December 2006.
  
Part D Program Integrity Portfolio (OEI-03-15-00180)  	                             18 |  P  a g e   
       
 
APPENDIX A 

 
Highlighted OIG Reports on Part D Program Integrity  
All of these reports are available on  OIGs website at oig.hhs.gov.  
Report 
Report Title   Date Issued 
Number  
OEI-02-11-00172  Medicare Paid for HIV Drugs for Deceased Beneficiaries   October 2014  
Part D Beneficiaries With Questionable Utilization Patterns 
OEI-02-11-00170  August 2014  
for HIV Drugs  
Less than Half of Part D Sponsors Voluntarily  Reported Data 
OEI-03-13-00030  March 2014  
on Potential Fraud and Abuse  
Medicare Payments Made on Behalf of Deceased 
OEI-04-12-00130  October 2013  
Beneficiaries in 2011  
OEI-02-09-00603  Prescribers with Questionable Patterns in Medicare Part D  June 2013  
Medicare Inappropriately Paid for Drugs Ordered by  
OEI-02-09-00608  June 2013  
Individuals Without Prescribing Authority  
OEI-03-11-00310  MEDIC Benefit Integrity Activities in Medicare Parts C and D  January 2013 
Review of Medicare Part D Prescription Drug Event Data for 
A-09-12-02031   October 2012  
Schedule II Drugs at Humana Insurance Company  
Inappropriate Medicare Part D Payments for Schedule II 
OEI-02-09-00605  September 2012 
Drugs Billed as Refills  
Review of Medicare Part D Prescription Drug Event Data for 
A-09-11-02023   Schedule II Drugs at United HealthCare Medicare &  July 2012 
Retirement 
Medicare Could Be Paying Twice for Prescription Drugs for 
A-06-10-00059   June 2012  
Beneficiaries in Hospice  
OEI-02-09-00600  Retail Pharmacies with Questionable Part D Billing   May 2012 
Review of Medicare Part D Prescription Drug Event Data for 
A-09-11-02074   February 2012 
Schedule II Drugs at CVS Caremark Corporation 
Medicare Advantage Organizations Identification of Potential 
OEI-03-10-00310  February 2012 
Fraud and Abuse 
Review of Excluded Providers in the Medicare Part D 
A-07-10-06004   December 2011  
Program  
Review of Medicare Part D Prescription Drug Event Data for 
A-09-11-02028   December 2011  
Schedule II Drugs at Hawaii Medical Service Association  
OEI-03-09-00330  Audits of Medicare Prescription Drug Plan Sponsors   December 2011  
Part D Program Integrity Portfolio (OEI-03-15-00180)                               19 |  P  a g e   
       
 
Report 
Report Title   Date Issued 
Number  
Addressing Vulnerabilities Reported by Medicare Benefit 
OEI-03-10-00500  December 2011  
Integrity Contractors 
Review of Medicare Part D Prescription Drug Event Data for 
A-09-10-02046   September 2011 
Schedule II Drugs at Health Net, Inc. 
Review of Medicare Payments to Prescription Drug Plans on 
A-05-09-00027   May 2011 
Behalf of Deceased Enrollees  
Oversight of the Prescriber Identifier Field in  Prescription 
A-14-09-00302   February 2011 
Drug Event Data for Schedule II Drugs 
Review of Sterling Life Insurance Companys Internal 
A-07-09-03136   Controls to Guard Against Fraud, Waste and Abuse for The  August 2010  
Medicare Part D Program 
OEI-03-09-00140  Invalid Prescriber Identifiers on Medicare Part D Drug Claims   June 2010  
Review of SilverScript Insurance Companys Internal 
A-07-09-03124   Controls to Guard Against Fraud, Waste and Abuse for The  January 2010 
Medicare Part D Program 
Medicare Drug Integrity Contractors Identification of Potential 
OEI-03-08-00420  October 2009  
Part D Fraud and Abuse  
Medicare Drug Plan Sponsors Identification of Potential 
OEI-03-07-00380  October 2008  
Fraud and Abuse 
Oversight of Prescription Drug Plan Sponsors Compliance 
OEI-03-08-00230  October 2008  
Plans  
CMSs Implementation of Safeguards During Fiscal Year 
OEI-06-06-00280  2006 to Prevent and Detect Fraud and Abuse in Medicare   October 2007  
Prescription Drug Plans  
OEI-03-06-00100  PDP Sponsors Compliance Plans  December 2006  
  
 
 
 
 
 
 
 
 
Part D Program Integrity Portfolio (OEI-03-15-00180)                               20 |  P  a g e   
       
 
APPENDIX B 

 
Highlighted OIG Products on Part D Program Integrity  
All of these items are available on OIGs website at oig.hhs.gov. 
OIG, testimony before the House Committee on Ways and Means, Subcommittee 
on Oversight.  Fraud in Medicare, testimony of Gary Cantrell, Deputy Inspector 
General for Investigations.  March 24, 2015. 
OIG, 2014 Top Management & Performance Challenges, Challenge 2:  Ensuring 
Appropriate Use of Prescription Drugs in Medicare and Medicaid, 2014. 
OIG, Podcast on Fraud and Abuse with HIV Drugs, 2014.  
OIG, Special Advisory Bulletin:  Pharmaceutical Manufacturer Copayment 
Coupons, September 2014. 
OIG, testimony before the House Committee on Energy and Commerce, 
Subcommittee on Oversight and Investigations.  Medicare Program Integrity:  
Screening Out Errors, Fraud, and Abuse, testimony of Gary Cantrell, Deputy 
Inspector General for Investigations.  June 25, 2014. 
OIG, Supplemental Special Advisory Bulletin:  Independent Charity Patient 
Assistance Programs, May 30, 2014. 
OIG, testimony before the House Committee on Oversight and Government 
Reform, Subcommittee on Energy Policy, Health Care and Entitlements.  
Medicare Mismanagement:  Oversight of the Federal Government Efforts to 
Recapture Misspent Funds, testimony of Brian P. Ritchie, Acting Deputy Inspector 
General for Evaluation and Inspections.  May 20, 2014. 
OIG, testimony before the House Committee on Ways and Means, Subcommittee 
on Health.  Ideas to Improve Medicare Oversight To Reduce Waste, Fraud, and 
Abuse, testimony of Gloria L. Jarmon, Deputy Inspector General for Audit 
Services.  April 30, 2014. 
OIG, testimony before the House Committee on Energy and Commerce, 
Subcommittee on Health.  Keeping the Promise:  How Better Managing Medicare 
Can Protect Seniors, testimony of Robert A. Vito, Regional Inspector General for 
Evaluation and Inspections.  March 4, 2014. 
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OIG, Spotlight on Drug Diversion, 2013. 
OIG, Podcast on Drug Diversion Overview, 2013.  
OIG, testimony before the Senate Committee on Homeland Security and 

Governmental Affairs.  Curbing Prescription Drug Abuse in Medicare, testimony 

of Gary Cantrell, Deputy Inspector General for Investigations, and Stuart Wright, 

Deputy Inspector General for Evaluation and Inspections.  June 24, 2013. 

OIG, testimony before the House Committee on Energy and Commerce, 

Subcommittee on Oversight and Investigations. Medicare Contractors Efforts to 

Fight Fraud  Moving Beyond Pay and Chase, testimony of Robert A. Vito, 

Regional Inspector General for Evaluation and Inspections.  June 8, 2012. 
 
OIG, testimony before the Senate Special Committee on Aging.  Overprescribed: 

The Human and Taxpayers Costs of Antipsychotics in Nursing Homes, testimony 

of Daniel R. Levinson, Inspector General.  November 30, 2011. 

OIG, testimony before the Senate Committee on Homeland Security and 

Governmental Affairs, Subcommittee on Federal Financial Management, 

Government Information, Federal Services, and International Security.  Testimony 

of Robert A. Vito, Acting Assistant Inspector General for CMS Audits.   

July 15, 2010. 

OIG, testimony before the Senate Committee on Homeland Security and 

Governmental Affairs, Subcommittee on Federal Financial Management, 

Government Information, Federal Services, and International Security.  Oversight 

Challenges in the Medicare Prescription Drug Program, testimony of Robert A. 

Vito, Regional Inspector General for Evaluation and Inspections.  March 3, 2010. 

OIG, Special Advisory Bulletin on Patient Assistance Programs for Medicare 

Part D Enrollees, November 22, 2005. 

 
 
 
 
 
 
Part D Program Integrity Portfolio (OEI-03-15-00180)                               22 |  P  a g e   
       
 
ENDNOTES
  
 
1 OIG, Less than Half of Part D Sponsors Voluntarily Reported Data on Potential 
Fraud and Abuse (OEI-03-13-00030), March 2014. 
2 OIG, Less than Half of Part D Sponsors Voluntarily Reported Data on Potential 
Fraud and Abuse (OEI-03-13-00030), March 2014; OIG, Medicare Drug Plan 
Sponsors Identification of Potential Fraud and Abuse (OEI-03-07-00380), 
October 2008. 
3 OIG, Medicare Drug Plan Sponsors Identification of Potential Fraud and Abuse  
(OEI-03-07-00380), October 2008. 
4 OIG, Medicare Advantage Organizations Identification of Potential Fraud and 
Abuse (OEI-03-10-00310), February 2012. 
5 OIG, MEDIC Benefit Integrity Activities in Medicare Parts C and D  
(OEI-03-11-00310), January 2013; OIG, Addressing Vulnerabilities Reported by 
Medicare Benefit Integrity Contractors (OEI-03-10-00500), December 2011; OIG, 
Medicare Drug Integrity Contractors Identification of Potential Part D Fraud and 
Abuse (OEI-03-08-00420), October 2009. 
6 OIG, Retail Pharmacies with Questionable Part D Billing (OEI-02-09-00600), 
May 2012.  
7 OIG, Part D Beneficiaries With Questionable Utilization Patterns for HIV Drugs  
(OEI-02-11-00170), August 2014; OIG, Prescribers with Questionable Patterns in 
Medicare Part D (OEI-02-09-00603), June 2013.  
8 OIG, Medicare Could Be Paying Twice for Prescription Drugs for Beneficiaries in 
Hospice (A-06-10-00059), June 2012; OIG, Audits of Medicare Prescription Drug 
Plan Sponsors (OEI-03-09-00330), December 2011; OIG, Review of Sterling Life 
Insurance Companys Internal Controls to Guard Against Fraud, Waste and Abuse 
for the Medicare Part D Program (A-07-09-03136), August 2010; OIG, Review of 
SilverScript Insurance Companys Internal Controls to Guard Against Fraud, Waste 
and Abuse for the Medicare Part D Program (A-07-09-03124), January 2010. 
9 OIG, Oversight of the Prescriber Identifier Field in Prescription Drug Event Data for 
Schedule II Drugs (A-14-09-00302), February 2011; OIG, Invalid Prescriber 
Identifiers on Medicare Part D Drug Claims (OEI-03-09-00140), June 2010. 
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10 OIG, Medicare Inappropriately Paid for Drugs Ordered by Individuals Without 
Prescribing Authority (OEI-02-09-00608), June 2013. 
11 OIG, Review of Excluded Providers in the Medicare Part D Program  
(A-07-10-06004), December 2011; OIG, Review of SilverScript Insurance 
Companys Internal Controls to Guard Against Fraud, Waste, and Abuse for the 
Medicare Part D Program (A-07-09-03124), January 2010. 
12 OIG, Review of Medicare Part D Prescription Drug Event Data for Schedule II 
Drugs at Humana Insurance Company (A-09-12-02031), October 2012; OIG, 
Inappropriate Medicare Part D Payments for Schedule II Drugs Billed as Refills  
(OEI-02-09-00605), September 2012; OIG, Review of Medicare Part D Prescription 
Drug Event Data for Schedule II Drugs at United HealthCare Medicare & 
Retirement (A-09-11-02023), July 2012; OIG, Review of Medicare Part D 
Prescription Drug Event Data for Schedule II Drugs at CVS Caremark Corporation  
(A-09-11-02074), February 2012; OIG, Review of Medicare Part D Prescription 
Drug Event Data for Schedule II Drugs at Hawaii Medical Service Association  
(A-09-11-02028), December 2011; OIG, Review of Medicare Part D Prescription 
Drug Event Data for Schedule II Drugs at Health Net, Inc. (A-09-10-02046), 
September 2011. 
13 OIG, Medicare Paid for HIV Drugs for Deceased Beneficiaries  
(OEI-02-11-00172), October 2014; OIG, Medicare Payments Made on Behalf of 
Deceased Beneficiaries in 2011 (OEI-04-12-00130), October 2013; OIG, Review of 
Medicare Payments to Prescription Drug Plans on Behalf of Deceased Enrollees  
(A-05-09-00027), May 2011. 
14 OIG, Less than Half of Part D Sponsors Voluntarily Reported Data on Potential 
Fraud and Abuse (OEI-03-13-00030), March 2014; OIG, Oversight of Prescription 
Drug Plan Sponsors Compliance Plans (OEI-03-08-00230), October 2008; OIG, 
CMSs Implementation of Safeguards During Fiscal Year 2006 to Prevent and 
Detect Fraud and Abuse in Medicare Prescription Drug Plans (OEI-06-06-00280), 
October 2007. 
15 OIG, MEDIC Benefit Integrity Activities in Medicare Parts C and D  
(OEI-03-11-00310), January 2013. 
16 OIG, Oversight of Prescription Drug Plan Sponsors Compliance Plans  
(OEI-03-08-00230), October 2008; OIG, CMSs Implementation of Safeguards 
During Fiscal Year 2006 to Prevent and Detect Fraud and Abuse in Medicare 
Prescription Drug Plans (OEI-06-06-00280), October 2007; OIG, Prescription Drug 
Plan Sponsors  Compliance Plans (OEI-03-06-00100), December 2006. 
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17 The Health Care Fraud Prevention & Enforcement Action Team (HEAT) was 
established in 2009 and is a joint effort of the Department of Health and Human 
Services, OIG, and the Department of Justice.  The Medicare Fraud Strike Force 
teams are a key component of HEAT.  
   
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ACKNOWLEDGMENTS
  
 
This report was prepared under the direction of Robert A. Vito, Regional Inspector 
General for Evaluation and Inspections in the Philadelphia regional office, and 
Linda M. Ragone, Deputy Regional Inspector General. 
Kevin McAloon served as team leader for this study, and Stefanie Vance served as 
lead analyst.  Other Office of Evaluation and Inspections staff from the Philadelphia 
regional office who conducted the study include Edward K. Burley, Courtney 
Fanslau, and Amy Sernyak.   
Central office staff who provided support include Jeffrey Cohen, Michael Cohen, 
Darlene Hampton, Meghan Kearns, Brian Ritchie, Jennifer Trussell, and Christy 
Wells.  
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