OIG warns pharmacies about drugmaker coupons used in claims to federal payers

November 10, 2014

Pharmacies that accept copayment coupons should take immediate steps to address the issues raised by OIG.

The U.S. Department of Health and Human Services’ Office of Inspector General (OIG) recently estimated that more than two million Medicare Part D beneficiaries use copayment coupons to buy drugs through their federal prescription plans. Patients benefit from drug manufacturer coupons because they enable consumers to opt for expensive brand-name drugs for little to no out-of-pocket copayment cost. Manufacturers benefit from copayment coupons because they may help a brand-name drug keep its market share, once a generic version is approved.

In September 2014, the OIG issued a report noting that the use of copayment coupons by beneficiaries of federal healthcare programs can lead to increased healthcare costs for the federal government and greater prescription drug costs for healthcare insurers.

Anti-kickback statute

The OIG determined that coupons were being used for drugs covered by federal healthcare programs. As discussed below, it is a violation of the anti-kickback statute to offer coupons to induce the purchase of drugs paid for by federal healthcare programs.

The OIG deemed that current safeguards used by drug manufacturers are unreliable. The OIG found that letters warning pharmacists not to submit claims for federal reimbursement in connection with the coupons and manufacturers’ use of pharmacy claims edits did not prevent the processing of coupons for the purchase of drugs paid for by federal healthcare programs.

In an accompanying advisory bulletin, the OIG proclaimed that copayment coupons constitute remuneration under the federal anti-kickback statute. As a result, drug manufacturers that purposefully use coupons to induce purchases of prescriptions payable by a federal healthcare program will violate the anti-kickback statute.

In addition, if the offer of copayment coupons violates the anti-kickback statute, claims for prescriptions resulting from such violations could be construed as fraudulent claims under the False Claims Act.

 

Pharmacy practices

The OIG report and bulletin also addressed pharmacy practices with regard to coupons.

Pharmacies risk violating federal laws when they accept remuneration for the purchase of drugs for which a federal healthcare program may make a payment. The OIG specifically stated that pharmacies that accept coupons for copayments owed by Medicare, Medicaid, or other federal healthcare program beneficiaries “may be subject to sanctions.”

In addition to potential sanctions under the anti-kickback statute and the False Claims Act, pharmacies that offer or accept copayment coupons may face penalties for beneficiary inducement. The government may assess civil monetary penalties for beneficiary inducement when a pharmacy offers or accepts a copayment coupon to induce a federal or state healthcare program beneficiary to use that particular pharmacy.

Immediate action

Pharmacies that accept copayment coupons should take immediate steps to address the issues raised by the OIG regarding the acceptance of copayment coupons.

For example, pharmacies currently accepting coupons might draft and adopt new policies that reflect the OIG’s report and special advisory bulletin. In addition, pharmacies that permit copayment coupons should train staff to verify that the person presenting the copayment coupon is not a beneficiary of a federal or state healthcare program.

Pharmacies may receive additional guidance on the use of coupons from the drug manufacturers that produce them, as the OIG recommended that manufacturers take action to prevent the use of copayment coupons for drugs paid for by federal healthcare programs.

The OIG report also recommended that manufacturers and pharmacies provide additional transparency to highlight the use of coupons within pharmacy claims.

In sum, pharmacies should reevaluate their acceptance of drug manufacturer coupons and establish safeguards to prevent the use of copayment coupons by beneficiaries in transactions involving a federal healthcare payer.