OIG Raises Concerns Over Possible Abuse of Controlled Substances Within Medicare Part D

In yesterday’s post, we introduced a possible correlation between the growth of Medicare spending on highly-addictive prescription drugs and potential Medicare fraud by wayward retail pharmacies. As a bit of review, spending for Medicare Part D administration has increased 136 percent overall since 2006. However, spending for opioids – including OxyContin and Morphine – has increased over 156 percent within the same time period, leaving authorities to inquire as to how or why spending in this area has increased so rapidly.

We continue today’s post with a look at some of the suspicious habits of retail pharmacies, including a look at some of the geographic “hotspots” for extreme Part D spending. Today’s post also highlights the most commonly-prescribed medications in these areas, which are not all within the category of controlled substances.

Questionable billing practices in retail pharmacies

The OIG begins its report[1. http://oig.hhs.gov/oei/reports/oei-02-15-00190.pdf] by highlighting some of the most common unlawful billing practices implemented by retail pharmacies. According to the report, the most common instances of pharmacy misconduct include billing for drugs not dispensed, offering illegal kickbacks, and drug diversion.

In order to identify potentially problematic pharmacies, the OIG looked at five factors, including:

-Average number of prescriptions per beneficiary

-Percentage of prescriptions that were for commonly abused opioids

-Average number of prescribers for commonly abused opioids per beneficiary

-Average number of different drugs per beneficiary

-Percentage of beneficiaries with an excessive supply of drugs

In using these factors, the OIG was able to identify more than 1,400 pharmacies with suspicious billing practices in 2014. Within this group, 292 pharmacies billed “extremely high” amounts for more than one category, and nine pharmacies posted extremely high billing rates for three or more categories. For instance, the national average number of prescriptions per Medicare Part D enrollee is 23, and some pharmacies reported a staggering 62 prescriptions (or more) per beneficiary in individual cases.

In other examples, 30 pharmacies reportedly dispensed commonly-abused opioids in over half of their prescriptions, including one Detroit-area pharmacy, which billed for controlled substances on behalf of 93 percent of its customers – 53 percent of whom are Medicare Part D enrollees.

Geographic “hot spots”

The OIG concluded its study by highlighting several geographic areas with extremely high prescription rates for certain types of drugs. According to the report, the definition of a “hot spot” is a “metropolitan areas where average Medicare payments per beneficiary for certain drugs are significantly higher than the average payments nationwide.” While the study was aimed at revealing fraud involving dangerous controlled substances, it also revealed potential billing misconduct with regard to non-controlled substances. The following details the prescription drugs identified, as well as the geographic hotspot where prescriptions were most common:

-Diclofenac potassium, a generic anti-inflammatory used for conditions such as rheumatoid arthritis and osteoarthritis, was most prescribed in San Juan, Puerto Rico, in record numbers.

-Solaraze, a treatment for sun damage, was prescribed heavily in New York, Miami, and Los Angeles.

-Vascepa and Lovaza, treatments for high triglycerides, were prescribed excessively in New York and Los Angeles.

-Nexium, a prescription drug for acid reflux, was billed at excessive levels in McAllen, Texas.

-Lipoderm, a treatment for the skin disorder shingles, was billed at excessive rates in New York and Los Angeles.

The OIG concluded its report with a final word on this trend, asserting that greater compliance measures will be necessary in order to combat prescription drug billing misconduct.

Contact Berger Montague today

If you are aware of suspicious billing practices within the healthcare industry and would like to discuss your information with a whistleblower attorney, please do not hesitate to contact Berger Montague today.