Federal Reports

In 2016, OIG called attention to significant growth in spending for compounded drugs (customized medications tailored to meet the needs of individual patients). Specifically, OIG found that Medicare Part D spending for compounded drugs grew by 625 percent from 2006 to 2015 and spending for topical compounded drugs-such as creams, gels, and ointments to relieve pain-grew at an even faster pace.

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We evaluated TVA’s administration of Coal Quality Adjustment Reports (CQAR) to determine if the Coal Quality Adjustment Reports were accurately calculated in accordance with the contract terms. We determined CQARs were not always calculated in accordance with the applicable contractual terms, and as a result, TVA did not accurately adjust the payments made to some coal vendors. The miscalculations were due to incorrect (1) rounding of moisture, ash, and British thermal units (BTU) quality adjustment rates and (2) weighted averages used for moisture, ash, and sulfur calculations. We estimated the incorrect calculations resulted in net underpayments to coal vendors totaling $103,576.

When Congress established average sales price (ASP) as the basis for Medicare Part B drug reimbursement, it also provided a mechanism for monitoring market prices and limiting potentially excessive payment amounts. The Social Security Act mandates that OIG compare ASPs with average manufacturer prices (AMPs). If OIG finds that the ASP for a drug exceeds the AMP by a certain percentage (currently 5 percent), the Act directs the Secretary of Health and Human Services to substitute the ASP based payment amount with a lower calculated rate. Through regulation, CMS outlined that it would only make this substitution only if the ASP for a drug exceeds the AMP by 5 percent in the 2 previous quarters or 3 of the previous 4 quarters.