Medicare Compliance & Reimbursement

Sparked by federal scrutiny, drugmakers examine compliance practices. Medicaid rebates and drug pricing issues are heating up, and drug manufacturers are examining their practices to set things right. The latest example: Bristol, TN-based King Pharmaceuticals says it's adjusting its financial statements to reflect about $46.5 million in Medicaid overpayments between 1998 and 2002. That adjustment arose from an internal review by the audit committee of King's board of directors - a review that was sparked by a Securities and Exchange Commission investigation. The company says the adjustment relates to amounts it underpaid Medicaid under the Medicaid rebate program and other government drug pricing regimes. King has contacted the HHS Office of Inspector General, the Department of Justice and the Centers for Medicare & Medicaid Services on the matter and expects to resolve it later this year. King isn't the first drugmaker to start looking into its compliance practices. Just last week, Bristol-Myers launched an internal compliance review of its sales and marketing tactics. King says it is putting in place more aggressive compliance measures - including new information technology applications - to improve the accuracy of its rebate payments. Lesson Learned: Pharmaceutical manufacturers are well advised to take a close look at their compliance programs now - before the feds force them to the task.