Joint House Subcommittee Hearing Will Examine Medicare Drug Overpayments, Estimated at $1B Per Year

Congress on Sept. 21 will hear testimony discussing the "more than" $1 billion Medicare reportedly overpaid for prescription drugs last year, AP/Newsday reports. In a joint hearing of the House Energy and Commerce Committee 's subcommittees on health and oversight and investigation, 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 more comprehensive drug benefit to Medicare, which would increase the program's prescription coverage from a cost of $5 billion per year to a cost of $30 billion (Dembner, Boston Globe, 9/21). Rep. Jim Greenwood (R-Pa.), chair of the 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 figures parallel the findings of an investigation by the HHS Inspector General that found overpayments on the "top" 24 drugs currently covered by Medicare reportedly 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). A live HealthCast of today's hearing will be available online beginning at 9:30 a.m. ET.