The bits you can buy are called Kutz-all bits. They are expensive and have different grit bits available.

And yes, they do jam up. If you do buy them, the best thing to do to clean them is use a lighter and burn off the wood particles. I use a fostner bit to get started because the Kutz-alls will run on you if you are using a drill press and mess up the face of the plug.

It's not a perfect method, but its good enough.

You can also look at buying a quality ball rasp at your desired diameter. Good luck.