GAO: One in four Part D contracts had drug plans suppressed for pricing inaccuracy

WASHINGTON, DC - A new Government Accountability Office (GAO) report released today found that during the first seven months of 2013, 25 percent of Part D contracts had one or more plans suppressed from Plan Finder, the Medicare website seniors use to choose their drug plans, due to pricing inaccuracy.  

The GAO also found that between January 1, 2009 and July 31, 2013, the Centers for Medicare and Medicaid Services (CMS) had taken more than 150 official compliance actions against plans for pricing inaccuracy- issuing 89 notices of noncompliance and 67 warning letters.

The report was requested in April by U.S. Sens. Bill Nelson (D-FL) and Susan Collins (R-ME), the chairman and ranking member of the Senate Special Committee on Aging, amid concerns over the reliability and usability of the Plan Finder website.

“Seniors should always have the right information when choosing a prescription drug plan,” said Nelson.  “This report underscores the need for Medicare to continue to do everything it can to stop false information from being posted on Plan Finder.   While I welcome the steps CMS plans to take this year to improve pricing accuracy, I’m going to closely monitor their progress.”

"In order for the Plan Finder to work, seniors must be able to get accurate drug cost information if they are to understand their plan options and choose the plan that best suits their needs,” Collins said.  “I am encouraged that the report finds that CMS has taken steps to ensure the accuracy of this information and urge the agency to continue to work to make sure seniors are able to navigate the website effectively."

Key among the GAO’s findings:

  • In 2012, 18 percent of Part D contracts had one or more plans that were suppressed from Plan Finder at least once, and, from January 1, 2013, through July 31, 2013, 25 percent of contracts had one or more plans that were suppressed at least once.
  • Between January 1, 2009 and July 31, 2013, CMS issued 89 notices of noncompliance and 67 warning letters for inaccurate or incomplete drug pricing information.
  • According to CMS documents, there has been only one instance in which CMS required a Part D plan sponsor to develop and implement a corrective action plan for compliance concerns related to Plan Finder pricing accuracy.  
  • For 2014, CMS plans to add an additional “display” quality measure that will indicate the extent to which point-of-sale prescription drug costs were lower than prices posted on the plan finder.

According to the report, Part D plan sponsors are required by CMS to submit accurate drug pricing information, which the agency uses to give seniors an online estimate of each plan’s annual drug costs and out-of-pocket expenses.  When a plan is suppressed from the Plan Finder website, its pricing information is removed and beneficiaries are unable sign up for the plan on site until the sponsor submits accurate prices.   In cases where plan sponsors repeatedly submit false or incomplete information, CMS can issue noncompliance notices or warning letters.  In more egregious cases, CMS can also force plan sponsors to take corrective action or seek enforcement actions such as civil penalties, payment suspensions or contract terminations.  

The report found nearly 24 million beneficiaries were enrolled in Part D plans in January 2013.   Last year, CMS had 630 contracts with Part D plan sponsors who together offered coverage through 2,660 stand-alone and Medicare Advantage drug plans.  

 

To read the full report, click here.   The Nelson-Collins letter requesting the study is in the related files in the right hand column of this page.