Part D Rates Miss Mark

Many Medicare Part D drug plan carriers continue to generate large, unexpected profits and losses, officials write.

The U.S. Department of Health and Human Services lets the Part D carriers, or “sponsors,” build “expected profits” into their contract bids, but the carriers are supposed to pay part of any unexpected profits back to Medicare.

For 2007, the net total that the carriers owe to Medicare dropped to $18 million, from $4.4 billion in 2006, according to officials in the HHS inspector general’s office.

But 184 of the 251 plans sponsors charged rates that turned out to be too high, and they will have to pay $1.81 billion to Medicare, while 97 charged rates that were too low, and they will get $1.79 billion in payments from Medicare, officials write.