OIG accuses more than 2,600 pharmacies of questionable billing practices
Asserts potential fraud and abuse against Medicare Part D

Jul 15, 2012
By: Ned Milenkovich, PharmD, JD
Drug Topics

Ned Milenkovich
The Office of Inspector General (OIG) at the U.S. Department of Health and Human Services issued a report on May 10, addressing pharmacy billing practices under the Medicare Part D program.
More than 2,600 implicated

The report indicates that 2,637 participating pharmacies (the majority of which are independent pharmacies) had shown patterns of “questionable” billing practices suggestive of fraud and abuse.

On the basis of its findings, OIG recommended the following to the Centers for Medicare & Medicaid Services (CMS):
Medicare Part D plan sponsors should self-report potential fraud and abuse incidents
Medicare Drug Integrity Contractors (MEDICs) pharmacy audit and oversight should be improved
OIG used several markers in its analysis, including:

Amounts billed per beneficiary
Number of prescriptions per beneficiary
Amounts billed per prescriber
Number of prescriptions per prescriber
Percentage of prescriptions for Schedule II drugs
Percentage of prescriptions for Schedule III drugs
Percentage of prescriptions for brand-name drugs
Percentage of prescriptions that are refills, to identify pharmacies exhibiting aberrant billing patterns.
One example in the OIG report mentioned that although pharmacies typically bill $1,500 per beneficiary and $1,800 per prescriber on average, numerous pharmacies billed more than $4,050 per beneficiary while others billed nearly $6,000 per prescriber.

CMS response

CMS acknowledged the OIG report and responded as follows:

First Recommendation. The OIG recommended that CMS require sponsors to refer possible fraud and abuse incidents that may warrant further investigation to CMS and other investigative and enforcement entities.

This recommendation was rejected by CMS. Instead, CMS responded that its regulations currently do not require self-reporting of potential fraud and abuse incidents. Nevertheless, CMS did state that it would explore the option of placing additional burdens on plan sponsors and consider assigning and sharing risk scores with plan sponsors.

Second Recommendation. After showing that MEDICs were not aware of incidents of fraud and abuse, OIG recommended that CMS should improve MEDICs’ monitoring of pharmacies and its ability to recognize pharmacies for further review.

In response, CMS stated that the MEDIC already identifies pharmacies that present a fraud risk. Nevertheless, CMS would consider developing a high-, medium-, and low-risk stratification for pharmacies and would consider sharing that information with sponsors when appropriate.

For the complete story….

Ned Milenkovich, PharmD, JD
Ned Milenkovich is a member at McDonald Hopkins, LLC, and chairs its Drug & Pharmacy Practice Group. He is also a member of the Illinois State Board of Pharmacy. Contact him at 312-642-1480 or at Articles by Ned Milenkovich, PharmD, JD

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