The Part D Improper Payment Measurement (Part C IPM) Program measures overpayment and underpayment errors in drug costs and low income payments in Prescription Drug Event (PDE) data, using both prescriptions and Part D sponsor claim information. The document available for download shows results and information on the Part D IPM. Key findings in the document are information related to sampling methodology, payment error results, and overpayment/underpayment findings.
Key Terms
Gross Improper Payments - The absolute value of the sum of overpayments and underpayments.
Overpayment Error - A CMS overpayment is any instance where the captured PDE information is greater than what is supported by the provided documentation. CMS compares details associated with the prescribed drug to the dispensed drug to the information supplied on a PDE record to identify any discrepancies where the Sponsor received more payment than the documentation supports. Examples include when the prescribed medication is actually less expensive than the value reported on the PDE record or when the prescribed quantity is less than what was dispensed.
Underpayment Error - A CMS underpayment is any instance where the captured PDE information is less than what is supported by the provided documentation. CMS compares details associated with the prescribed drug to the dispensed drug to the information supplied on a PDE record to identify any discrepancies where the Sponsor received less payment than the documentation supports. Examples include when the prescribed medication is more expensive than the value reported on the PDE record or when the prescribed quantity, based on the submitted days’ supply, is greater than what was dispensed.
Monetary Loss – A subset of improper payments where the wrong recipient was paid or the correct recipient was paid the wrong amount. Monetary loss results from administrative or process errors by other party. In the Part D Program, monetary loss results from CMS payment being in excess of what the supporting documents validated.
Non-Monetary Loss – The non-monetary loss component is comprised of underpayments resulting from cases in which the supporting documentation validates a payment higher than what was paid by CMS, as identified during the PDE record review.