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Medicare says will recoup $4 bln from US drug plans

October 5, 2007
Reuters Health

WASHINGTON (Reuters) - The U.S. Medicare program said on Friday it expects to recover $4 billion from insurers that offered prescription drug coverage in 2006 because spending on medicines that year was lower than expected.

The Centers for Medicare & Medicaid Services (CMS) said it pays Part D prescription drug plans in advance based on expected use and then calculates final payments at the end of the year based on actual use and other data.

"A number of factors led to this lower spending, including the fact that 2006 marked the first time that plans were bidding on the new Part D program and the fact there are higher levels of generic drug utilization in Part D than anticipated," a CMS statement said.

Aetna Inc, Cigna Corp, UnitedHealth Group and other companies offered Medicare prescription drug coverage in 2006.

Drug plans can appeal Medicare's calculation of the amount of money to be recovered, CMS said. (Reporting by Lisa Richwine)