Two new federal reports shine a light on questionable billing patterns across the country in regards to Medicare Part D and urge the CMS to do more to protect the program.
The reports, released Tuesday by HHS' Office of Inspector General, come days after federal officials announced charges against 44 people across the country for fraud in Medicare Part D, which is Medicare's drug benefit program. Those charges represented the first large-scale, federal effort to focus on Medicare Part D fraud—an effort many say is likely to continue.
One of the reports (PDF) released Tuesday shows that more than 1,400 pharmacies had questionable billings for opioid drugs, and a number of cities had higher than average billings for certain medications last year. The second report (PDF) calls on the CMS to implement more of the OIG's recommendations for fighting fraud and abuse in Part D.
“In many instances action has been taken to implement our recommendations and strengthen Part D program integrity,” according to one of the OIG reports. “However, more work needs to be done to protect the program from fraud, waste and abuse.”
CMS spokesman Aaron Albright said in a statement that the CMS has taken steps to address previous OIG recommendations and has several ongoing initiatives to increase its oversight of Part D, such as requiring more than 400,000 prescribers to enroll in Medicare, helping health plans decrease overuse of drugs and taking administrative action against those potentially committing fraud.
“CMS works diligently with our law enforcement partners to prevent fraud in the first place and to recover payments for wasteful, abusive or fraudulent services,” Albright said. “Since the Part D program began, CMS has taken steps to address the Inspector General's recommendations and (has) made progress collecting and analyzing data to proactively identify potential fraud as well as conduct robust oversight of plans.“
The report recommends plan sponsors be required to report to the CMS and/or its Medicare Drug Integrity Contractor all potential fraud and abuse as well as data on inquiries and corrective actions they take in response to fraud and abuse.
It also recommends, among other things, that the CMS implement a way to reject prescriptions written by excluded providers; restrict certain beneficiaries to a limited number of pharmacies or prescribers; determine the effectiveness of plan sponsors' fraud and abuse detection programs; and exclude refills of Schedule II drugs, which are prohibited by federal law, from calculations of final payments to plan sponsors at the end of each year.
According to the CMS, it will require, in 2016, Part D plans to stop filling and paying for prescriptions from providers who are not enrolled into Medicare. It also already has a number of other ongoing initiatives to strengthen the integrity of Part D; has established initiatives and developed guidance to help plan sponsors decrease drug overuse; and regularly monitors pharmacy billing patterns and addresses risks posed by pharmacies with questionable billing.
The report, however, says that Part D remains vulnerable to “widespread fraud.” As of May 2015, OIG had 540 pending complaints and cases involving Part D, a 134% increase over five years, according to the report.
One area of concern is spending on commonly abused opioid drugs which grew at a faster rate than spending for all Part D drugs—156% versus 136%, according to the report.
The report also details questionable Part D billing practices in 1,432 retail pharmacies last year. Questionable billing practices include high numbers of prescriptions per beneficiary; high percentages of prescriptions for commonly abused opioids; high numbers of prescribers for commonly abused opioids per beneficiary receiving opioids; high numbers of types of drugs per beneficiary; and high percentages of beneficiaries with excessive supplies of a drug.
“Although some of this billing may be legitimate, all pharmacies that bill extremely high amounts warrant further scrutiny,” according to the report.
The OIG also identified a number of geographic “hotspots” for potential fraud and abuse—areas where average Medicare payments per beneficiary for selected non-controlled drugs are significantly higher than national averages. Hotspots highlighted in the report included Los Angeles; New York; McAllen, Texas; Miami; and San Juan, Puerto Rico.
The billing patterns in those areas raise questions about whether the drugs were medically necessary or actually provided, according to the report. The report also questions whether pharmacies were actually billing for the drugs and then providing less-expensive generic or over-the-counter versions.
“Diversion of noncontrolled substances is growing and fraud related to these types of drugs can result in significant financial losses to Medicare,” the report stated.
According to the CMS, it is already analyzing and monitoring potential fraud in hotspots and is working with the Medicare fraud strike force in those areas. The CMS identified and recovered $105 million in improper payments in Medicare Parts C and D in fiscal years 2011 and 2012, according to the CMS.