An investigation by the U.S. Department of Health and Human Services found that the federal insurance program paid nearly $300,000 to cover HIV drugs for about 160 people who were dead when their prescriptions were filled in 2012. The report, released last week, was a reminder that Medicare’s struggles with fraud, waste and abuse remain a drain on the more than $580-billion insurance program.

Under the Medicare Part D program, the Centers for Medicare and Medicaid Services (CMS) contracts with private insurance companies, known as sponsors, to provide prescription drug coverage to beneficiaries who choose to enroll. The Office of Inspector General (OIG) says in the report that it “has had ongoing concerns about Medicare paying for drugs and services after a beneficiary has died. Drugs that treat the human immunodeficiency virus (HIV) can be a target for fraud, waste, and abuse, primarily because they can be very expensive. Although this report focuses on HIV drugs, the issues raised are relevant to all Part D drugs.”

This study was based on an analysis of Prescription Drug Event (PDE) records for HIV drugs in 2012.  Part D sponsors submit these records to CMS for each drug dispensed to beneficiaries enrolled in their plans. Each record contains information about the drug, beneficiary, pharmacy, and prescriber. Investigators used the Beneficiary Enrollment Database, the Social Security Administration’s Death Master File, and Accurint’s Death Records to identify beneficiaries’ dates of death.

Investigators discovered that Medicare paid for HIV drugs for over 150 deceased beneficiaries. CMS’s current practices allowed most of these payments to occur. Specifically, CMS has edits (i.e., systems processes) in place that reject PDE records for drugs with dates of service more than 32 days after death. CMS’s practices allow payment for drugs that do not meet Medicare Part D coverage requirements. Most of these drugs were dispensed by retail pharmacies. “This review looked only at HIV drugs, which account for one-quarter of one percent of all Part D drugs in 2012. However, our findings have implications for all drugs because Medicare processes PDE records for all drugs the same way. Considering the enormous number of Part D drugs, a change in practice would affect all Part D drugs and could result in significant cost savings for the program and for taxpayers.”

Another recent OIG report found that nearly 1,600 Part D beneficiaries had questionable utilization patterns for HIV drugs in 2012. In total, Medicare paid $32 million for HIV drugs for these beneficiaries. These beneficiaries had no indication of HIV in their Medicare histories, received an excessive dose or supply of HIV drugs, received HIV drugs from a high number of pharmacies or prescribers, or received contraindicated drugs. These questionable patterns indicate that beneficiaries may be receiving inappropriate or unnecessary drugs. It may also indicate that a pharmacy is billing for drugs that a beneficiary never received, or that a beneficiary’s identification number has been stolen.

Another earlier OIG report looked at the extent to which CMS made monthly prospective payments in 2011 to Part C and D sponsors for deceased beneficiaries. According to CMS policy, Medicare pays the sponsor the full payment for the month in which a beneficiary dies. OIG found that in 2011, CMS made monthly payments to Part C and D sponsors totaling $21 million for deceased beneficiaries in the months after death.

Lastly, another OIG report found that in 2006 and 2007 CMS paid $3.6 million in monthly prospective payments to certain Part D sponsors for deceased beneficiaries. It found that although CMS had correctly stopped payments for the vast majority of deceased beneficiaries in 2006 and 2007, its systems did not always identify and prevent improper payments. In addition, CMS did not always recover on a timely basis the payments it had made on behalf of deceased beneficiaries.

So these problems appear again, in plain sight. Willie Sutton Jr. was a prolific American bank robber. Sutton is known, albeit apocryphally, for the urban legend that he said that he robbed banks “because that’s where the money is.” He died in 1980. He would probably be looking at Medicare today for his next heist were he still around.