OIG accuses more than 2,600 pharmacies of questionable billing practices


The Office of Inspector General has issued a report implicating more than 2,600 pharmacies in Medicare Part D fraud

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.

OIG used several markers in its analysis, including:

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.

Going forward

In light of the OIG report, pharmacies should be aware of the factors that may be used to accuse pharmacies of practicing questionable billing.

OIG is making efforts to target pharmacies and eliminate fraud and abuse. While pharmacies should continue to conduct their standard compliance audits, they should add the markers used by OIG to determine whether they exceed the OIG thresholds and to evaluate them if present.

Of geographic interest, the OIG report noted that Miami, Los Angeles, and Detroit were the most likely areas for questionable pharmacy billing, followed by Baltimore, New York, and Tampa. These were not exclusive areas of questionable pharmacy billing, just the most likely.

This article is not intended as legal advice and should not be used as such. When legal questions arise, pharmacists should consult with attorneys familiar with the relevant drug and pharmacy laws.

Ned Milenkovich is a member at McDonald Hopkins, LLC, and chairs its drug and pharmacy practice group. He is also Vice-Chairman of the Illinois State Board of Pharmacy. Contact Ned at 312-642-1480 or at nmilenkovich@mcdonaldhopkins.com

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