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CMS Paid $112M for Potentially Harmful Drugs, OIG Says

Cheryl Clark, for HealthLeaders Media, November 5, 2010

She said the data source used in the report methodology "is likely flawed and cannot be relied upon as a proxy for identifying the dispensing of outdated products."

Rather, Tavenner wrote, the problem is most likely "imprecise pharmacy billing practices based on lack of timely access to updated coding data."

She added that "real-time electronic pharmacy billing with 11-digit NDC (National Drug Code) does not always precisely correlate with the actual product being dispensed. For example, it is not uncommon for a pharmacy to bill using an NDC for the correct drug product but the incorrect package size."

That said, Tavenner said the agency recognizes "that pharmacies should be billing with the correct NDCs and believe that transparent data on outdated NDCs could assist with eliminating the use of outdated NDCs on pharmacy claims transactions, and any potential risk of payment for actual outdated drugs." 

She added that the U.S. Food and Drug Administration should provide this information, so all databases will have the same access to the same information.

The OIG rejected Tavenner's arguments saying that OIG used "the same dates that CMS provided to states for use in determining whether drugs were eligible for reimbursement under the Medicaid drug rebate program."

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