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OIG: Medicare Paid $1.2 Billion For Drugs With Invalid Prescriber Numbers

Cheryl Clark, for HealthLeaders Media, June 30, 2010

Medicare drug plans and beneficiaries paid pharmacies $1.2 billion in 2007 for more than 18 million prescriptions that contained 527,749 invalid prescriber numbers, indicating the agency lacks adequate procedures to detect fraud.

"The Centers for Medicare and Medicaid Services and Part D plans do not verify that prescriber identifiers" are valid, said the Office of Inspector General said in a report released Tuesday. "Nor do they apply claims processing edits to check prescriber identifiers against known format requirements."

"These identifiers either were not listed in the National Provider Identifiers (NPI), Drug Enforcement Administration (DEA) number, and Unique Physician Identification Numbers (UPIN) registries or had been deactivated or retired before Jan. 1, 2006," the agency said.

Additionally, identifiers on 17% of the drug claims with invalid prescriber numbers did not conform to length or format specifications, and Medicare drug plans and enrollees paid pharmacies $213 million for PDE records with invalid identifiers.

Ten of the invalid identifiers accounted for another 17% of the claims with invalid prescriber numbers. These 10 were the same length as a valid DEA number, but nine of the numbers were never valid and the remaining number was retired in 2005.

"Medicare drug plans and enrollees paid pharmacies $237 million in 2007 for drug claims that contained these top 10 invalid identifiers" the OIG said, and a single number accounted for $105 million of this amount. Five of the top 10 invalid identifiers appeared on claims with payment amounts totaling more than $10,000 per claim.

"A single company that is a large pharmacy benefit manager and mail-order pharmacy accounted for the majority of PDE (Part D Prescription Drug Event) records that contained one of the top invalid prescriber identifiers," the OIG said. The agency did not name the company.

The agency recommends that CMS

  • Conduct period reviews to ensure the validity of prescriber identifiers and
  • Require Part D plans to institute procedures to identify invalid identifiers and flag them for review

"CMS's efforts to determine the validity, medical necessity, or appropriateness of Part D prescriptions and drug claims may be limited without valid prescriber identifiers."

CMS officials agreed with the recommendations, but said that invalid prescriber numbers on claims "are not an automatic indication of invalid prescriptions or pharmacy claims."

In a letter to Inspector General Daniel Levinson, acting CMS administrator Charlene Frizzera wrote that invalid numbers "often reflect that the pharmacy did not have access to the prescriber's DEA number when filling prescriptions for non-controlled substances. So while CMS agrees that invalid prescriber identifiers can hinder program oversight efforts for monitoring prescribing practices of specific prescribers, this is not an automatic indication for invalid prescriptions or pharmacy claims."

This report is one in a series the OIG has issued dealing with invalid identifiers. In February, it found that Medicare allowed almost $34 million in 2007 for medical equipment and supply claims with invalid or inactive referring physicians' UPINs, including $5 million for claims with deceased referring physicians' UPINs.

That report also found that Medicare allowed more than $300,000 in 2007 for claims with invalid referring physicians' NPIs.


Cheryl Clark is senior quality editor and California correspondent for HealthLeaders Media. She is a member of the Association of Health Care Journalists.
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