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OIG: Medicare Overpaid $2.3 Billion for Drugs

Wed, 01/24/2001 - 12:00am — Karen Stevenson
Description: 

The Office of the Inspector General (OIG) of the Department of Health and Human Services concluded that the Medicare program could save billions of dollars if they acquired prescription drugs at the same prices available to the Veterans Administration. The Medicare program paid for about $3.9 billion in prescription drugs in 1999, and a portion of that cost was born by the beneficiaries who paid a 20% co-payment for those medications. The Medicare program does not directly purchase drugs, like the VA does, but instead reimburses Medicare contractors and intermediaries, who in turn reimburse state Medicaid agencies and providers. The OIG concluded that the program, and its beneficiaries, could see realize nearly #2.3 billion a year in savings if they were able to get the same contract rate allowed to the Veterans Administration, and rebates like those the state Medicaid programs currently receive.

The Office of the Inspector General (OIG) of the Department of Health and Human Services concluded that the Medicare program could save billions of dollars if they acquired prescription drugs at the same prices available to the Veterans Administration. The Medicare program paid for about $3.9 billion in prescription drugs in 1999, and a portion of that cost was born by the beneficiaries who paid a 20% co-payment for those medications. The Medicare program does not directly purchase drugs, like the VA does, but instead reimburses Medicare contractors and intermediaries, who in turn reimburse state Medicaid agencies and providers. The OIG concluded that the program, and its beneficiaries, could see realize nearly #2.3 billion a year in savings if they were able to get the same contract rate allowed to the Veterans Administration, and rebates like those the state Medicaid programs currently receive.