The U.S. Department of Health and Human Services, Office of Inspector General (“OIG”) announced multiple new OIG Work Plan Items, including two audits, focused on identifying and quantifying improper Medicare and Medicaid claims for diabetes drugs prescribed for weight loss. This new focus area comes as no surprise given the recent meteoric rise in popularity of diabetes drugs, such as Ozempic, for weight loss.

The OIG’s “Audit of Diabetes Drugs Under Medicare Part D” will focus on auditing Part D data for prescribed diabetes drugs and any related Part B service claims for diabetes drugs used for weight loss. The OIG noted that “[i]n 2022, six type 2 diabetes drugs accounted for more than half of all Medicare Part D payments for diabetes drugs,” and Part D spending for Ozempic “more than tripled between 2020 and 2022, with expenditures jumping from $1.5 billion to $4.6 billion.” The OIG Work Plan Audit announcement also serves as a reminder of the Centers for Medicare and Medicaid Services’ position that the Medicare program does not consider prescribing type 2 diabetes drugs for weight loss to be a medically accepted use and “presents an opportunity for fraudulent, excessive, or unnecessary Part D payments.” Furthermore, the OIG notes that any drugs used for weight loss are specifically excluded from Medicare Part D coverage.¹

In the new Work Plan Item titled “Audit of Medicaid Select Diabetes and Weight Loss Drugs,” the OIG will analyze the national Medicaid utilization for select diabetes drugs that have seen a rapid increase in Medicaid utilization and gross spending. These diabetes drugs are generally covered by Medicaid to help control blood sugar levels of enrollees with type 2 diabetes but are now frequently being used for weight loss.²

The OIG audit findings are not anticipated to be published until 2025. However, if the OIG reports evidence widespread noncompliance regarding diabetes drug prescribing for weight loss purposes, provider-facing audits from auditors, such as the Supplemental Medical Review Contractor (“SMRC”), Recovery Audit Contractors (“RACs”), and Unified Program Integrity Contractors (“UPICs”), are likely to follow.

Medicare and Medicaid participating providers that routinely prescribe diabetes drugs should consider reviewing their internal policies and procedures, audit practices, and documentation requirements when prescribing diabetes drugs to ensure records support medical necessity and comply with Medicare and Medicaid requirements.

[1] OIG, Audit of Diabetes Drugs Under Medicare Part D, https://oig.hhs.gov/reports-and-publications/workplan/summary/wp-summary-0000846.asp.

[2] OIG, Audit of Medicaid Select Diabetes and Weight Loss Drugs, https://oig.hhs.gov/reports-and-publications/workplan/summary/wp-summary-0000847.asp.