Medicare improperly paid out millions for prescription drugs provided to incarcerated persons, a new government report finds.

How this slipped through the cracks is beyond belief. Not only are most people who are incarcerated ineligible for federal health care benefits, even more so when it comes to coverage under Medicare Part D, but Medicare still paid out millions for prescription drugs for people in jails and prisons. This was because of the lack of internal controls, according to a new Department of Health and Human Services’ Office of Inspector General (OIG) report made public Monday.

The OIG offices are estimating that Medicare Part D just accepted prescription drug records that were submitted through either sponsors or private plans for prescription drugs, which where “unallowable” under the rules and regulations of the insurance provider. This mistake resulted in almost $12 million dollars paid out to the prison and jail inmates for prescriptions during 2006 – 2010.

“Centers for Medicare and Medicaid Services (CMS) inappropriately accepted Prescription Drug Event Records (PDE) submitted by sponsors for prescription drugs provided to incarcerated beneficiaries and used those records to make its final payment determinations,” the report reads. “Specifically, for 49 of the 100 beneficiaries that we sampled, CMS accepted 1,298 PDE records submitted by sponsors for prescription drugs provided to incarcerated beneficiaries. The gross drug costs associated with these 1,298 accepted PDE records totaled $325,903.”

Because the OIG wasn’t able to verify the whether the beneficiaries of the 100 sampled were actually incarcerated during the listed dates, they went ahead and paid them, not questioning the PDE records.

“On the basis of our sample results, we estimated that CMS accepted PDE records with gross drug costs totaling an additional $11,656,314 for incarcerated beneficiaries,” the report explained.

The report comes after an earlier costly mistake, which detailed how Medicare made $33.6 million in improper payments from 2009-2011 to people providing services to inmates under Part A and Part B.

The OIG report made three recommendations, which included correcting the improper payments made for people who were found to be in jail, strengthening controls to make sure Medicare is not paying for inmate drugs, and reopening and identifying all improper payments, including the OIG’s estimates.

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