Medicare Overpaid $251 Million in 18 Months for Drugs

Medicare Overpaid $251 Million in 18 Months for Drugs

By Ciro Scotti

By reimbursing certain drug providers based on outdated pricing, Medicare has squandered millions of dollars that could have been saved if the recommendations of a government watchdog had been followed.

As reported by The Washington Examiner, the Office of the Inspector General for the Health and Human Services Dept. found that Medicare has continued to pay providers of infusion drugs, which are delivered through IV pumps, at higher prices than necessary. HHS is paying providers based on 2003 prices when the drugs were more expensive--this despite warnings from the IG, most recently in February, 2013.

“Medicare payment amounts for infusion drugs…substantially exceeded the estimated acquisition costs,” according to findings reported on the IG’s website.

The IG said that had its recommendations been implemented, $251 million would have been saved over an 18-month period.

The Centers for Medicare & Medicaid Services (CMS) apparently ignored the IG when it proposed that the agency push legislation that would have brought the method of reimbursement for infusion drugs in line with the process for other pharmaceuticals. As an alternative, the IG recommended that the CMS employ competitive bidding to supply infusion drugs.

 “CMS partially concurred with the first recommendation, but has not taken steps toward seeking legislation,” The IG’s report said. “CMS concurred with the second recommendation but said subsequently that…infusion drugs will not be included in competitive bidding until at least 2017.”

So presumably the overpaying won’t stop anytime soon.

Chart of the Day: Boosting Corporate Tax Revenues

By The Fiscal Times Staff

The leading candidates for the Democratic presidential nomination have all proposed increasing taxes on corporations, including raising income tax rates to levels ranging from 25% to 35%, up from the current 21% imposed by the Republican tax cuts in 2017. With Bernie Sanders leading the way at $3.9 trillion, here’s how much revenue the higher proposed corporate taxes, along with additional proposed surtaxes and reduced tax breaks, would generate over a decade, according to calculations by the right-leaning Tax Foundation, highlighted Wednesday by Bloomberg News.

Chart of the Day: Discretionary Spending Droops

By The Fiscal Times Staff

The federal government’s total non-defense discretionary spending – which covers everything from education and national parks to veterans’ medical care and low-income housing assistance – equals 3.2% of GDP in 2020, near historic lows going back to 1962, according to an analysis this week from the Center on Budget and Policy Priorities.

Chart of the Week: Trump Adds $4.7 Trillion in Debt

By The Fiscal Times Staff

The Committee for a Responsible Federal Budget estimated this week that President Trump has now signed legislation that will add a total of $4.7 trillion to the national debt between 2017 and 2029. Tax cuts and spending increases account for similar portions of the projected increase, though if the individual tax cuts in the 2017 Republican overhaul are extended beyond their current expiration date at the end of 2025, they would add another $1 trillion in debt through 2029.

Chart of the Day: The Long Decline in Interest Rates

Wall Street slips, Dow posts biggest weekly loss of 2013
By The Fiscal Times Staff

Are interest rates destined to move higher, increasing the cost of private and public debt? While many experts believe that higher rates are all but inevitable, historian Paul Schmelzing argues that today’s low-interest environment is consistent with a long-term trend stretching back 600 years.

The chart “shows a clear historical downtrend, with rates falling about 1% every 60 years to near zero today,” says Bloomberg’s Aaron Brown. “Rates do tend to revert to a mean, but that mean seems to be declining.”

Chart of the Day: Drug Price Plans Compared

By The Fiscal Times Staff

Lawmakers are considering three separate bills that are intended to reduce the cost of prescription drugs. Here’s an overview of the proposals, from a series of charts produced by the Kaiser Family Foundation this week. An interesting detail highlighted in another chart: 88% of voters – including 92% of Democrats and 85% of Republicans – want to give the government the power to negotiate prices with drug companies.