House Hearing Will Examine Medicare Overpayments

Congress today will hear testimony discussing the "more than" $1 billion Medicare reprotedly overpaid for prescription drugs last year, AP/Newsday reports. In a joint hearing of the House Energy and Commerce Subcommittee on Health and House Energy Commerce Subcommittee on Oversight the lawmakers will "investigate why Medicare pays so much more than other agencies" (Marx, Newsday, 9/20). According to the Boston Globe, federal lawmakers are "concerned about the magnitude of the waste" because of recent debates to consider adding a drug benefit to Medicare, which would increase the program's prescription coverage from approximately 450 drugs at a cost of $5 billion per year, to all drugs at a cost of $30 billion (Dembner, Boston Globe, 9/21). Rep. Jim Greenwood (R-Pa.), chair of the House Energy Commerce Subcommittee on Oversight, said, "We hope to get a fix on it this year, because the current system is costly to the taxpayer and an overall outrage" (Newsday, 9/20). A report by the General Accounting Office, to be presented at the hearing today, states that Medicare reimbursed doctors "at least" $532 million more than they paid for drugs last year and pharmacies were reimbursed $483 million "above their purchase price." The GAO overpayments reportedly on the "top" 24 drugs currently covered by Medicare cost taxpayers approximately $887 million last year (Boston Globe, 9/21). HHS Deputy Inspector General George Grob will testify before the subcommittees today, recommending that "Congress consider authorizing a commission to set payment rates, base payments on the amounts doctors actually pay or pay amounts set by the Department of Veterans Affairs," considered the lowest prices available (Appleby, USA Today, 9/21).