In 2003, Congress passed the Medicare Prescription Drug, Improvement, and Modernization Act, which added a new outpatient prescription drug benefit known as “Part D” to the Medicare Program, to begin in 2006. The Medicare Part D Program subsidizes the cost of prescription drugs for eligible Medicare beneficiaries and relies on private contractors, called Part D Sponsors, to provide the prescription drugs to the beneficiaries. The sponsor, either directly or through pharmacy benefit managers (“PBMs”), then submits claims to the Center for Medicare and Medicaid Services (“CMS”) for the cost of these drugs and a bundle of related services.

Although the Part D program is relatively new, fraud against the Part D program is already major concern. For instance, CMS and the GAO reported that the size, nature, and complexity of the Part D program make it at particular risk for fraud, waste, and abuse. As it is widely expected that the Part D program will continue to be the target of substantial fraud in the coming years, CMS identified specific types of fraud that the Part D program is vulnerable to.

The common types of fraud, waste and abuse in the Part D program which CMS has identified include fraud by all entities in the Part D program including Sponsors, PBMs, and Pharmacies. These types of fraud include:

  • Inaccurate or incomplete false prescription drug event (“PDE”) data submission;
  • Billing for non-existent prescriptions;
  • Catastrophic coverage manipulation;
  • Bait and switch drug pricing;
  • Billing for brand name drugs when generics are dispensed;
  • Improper prescription drug switching;
  • Failure to provide negotiated prices of a drug to a beneficiary;
  • Improper payments for excluded drugs;
  • Illegal marketing schemes;
  • Overcharging;
  • Enrollment fraud;
  • Red-lining;
  • Improper rebates from pharmaceutical manufacturers and wholesalers.

If you believe you have information related to a claim of fraud, and would like to speak with a member of our qui tam whistleblower practice group about a potential false claims case, please feel free to contact us directly or click the Contact Us link.