Life Sciences

OIG 2007 work plan restates charge to follow fraud and abuse and false claims closely

Pharma Compliance Alert, September 27, 2006

The Office of the Inspector General (OIG) released its 2007 Work Plan yesterday, which contains a restatement of its crack down on healthcare fraud, including fraud within the Part D benefit. The increased fraud scrutiny has been evident this year with several high-profile cases hitting the news. Such developments signal a significant shift in FDA priorities and indicate a changing tide in enforcement.

There are at least 150 investigations underway under the False Claims Act and there have been very few settlements this year. Therefore, the big question on everyone's mind is whether the many investigations will be concluded in the coming year, and how their outcomes will effect future settlements, says Wayne Pines, president of regulatory services and healthcare at APCO Worldwide. "Each recent settlement, such as the latest Schering-Plough one, has added interesting new dimensions to the settlement landscape--for example, the Schering settlement included an allegation that the company had falsely communicated to the FDA its intentions to correct previous actions, when in fact it did not do so," Pines says. Pines will speak more on the fallout from these settlements on an audio conference sponsored by Pharma Compliance Alert on October 18.

According to Bruce D. Armon, a partner in and chair of the life sciences group at Saul Ewing LLP, pricing comparisons are also a key issue in the work plan.

"OIG's latest work plan stated it will conduct pricing comparisons for drug prices under Medicare Part D as compared to Medicare Part B and Medicaid. As the federal government expands its expenditures on pharmaceuticals, these types of comparisons are inevitable. In addition, OIG will review the system's current safeguards to ensure that Part D does not inappropriately pay for prescription drug claims for which another payer is liable, and duplicate Part D claims for the same beneficiary," says Armon.

Other key points of the 2007 Work Plan include:

  • Medicare Part D: Drug Access through Prior Authorization and Exceptions

  • Review of Part B Drug Reimbursement Methodology

  • Monitoring Drug Prices of Medicare Part D Drug Plans

  • Part D Dual-Eligible Demonstration Project

  • Rebates in the Retirement Retiree Drug Subsidy Program

  • Allocation of Employer Premiums under the Retirement Drug Subsidy Program

  • Review of CMS's Oversight of the Medicaid Drug Rebate Program

    Read the full work plan on the OIG Web site.

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