Lawmakers criticize agencies for lack of coordination of prescription drug benefits for federal retirees

May 13 2008

A lack of coordination between CMS and the Office of Personnel Management on prescription drug benefits for federal retirees has cost those retirees and the federal government as much as $200 million annually, according to a letter sent to the agencies on Monday by two House Democrats, CQ HealthBeat reports.

In the letter, House Oversight and Government Reform Committee Chair Henry Waxman (D-Calif.) and Rep. Danny Davis (D-Ill.) wrote that, for the more than 200,000 federal retirees who have prescription drug benefits through the Federal Employees Health Benefits Program and Medicare, the "additional Part D benefits are duplicative and unnecessary." According to the letter, the problem has resulted in $60 million in "unnecessary premiums paid by retirees" and $140 million in "unnecessary subsidies paid by taxpayers," and, in large part, "this $200 million represents excess profits for the private insurers that run the drug plans."

The letter asked CMS and OPM to provide information on the number of federal retirees enrolled in FEHBP and the Medicare prescription drug benefit, the plans in which those retirees are enrolled and an analysis of the cost of the "duplicative coverage" for those retirees and the federal government.

CMS spokesperson Jeff Nelligan said that agency officials have begun to review the letter. OPM spokesperson Mike Orenstein said that he could not confirm whether agency officials had received the letter, adding that they would respond to the lawmakers directly (Carey, CQ HealthBeat, 5/12).