New OIG Reports Peg Billing Trends and Prescribing Hotspots as Harbingers of Part D Fraud

By on June 30, 2015
Posted In Pharmaceuticals

On Tuesday, June 23, the U.S. Department of Health & Human Services Office of Inspector General (OIG) released two reports that hone in on data patterns showing potential fraud and abuse in the Medicare Part D program.  These reports were released less than a week after a coordinated national Medicare fraud takedown that included a significant number of Part D-related targets.

Medicare Part D is the optional prescription drug benefit for Medicare beneficiaries that went into effect in 2006.  In 2013, over 39 million beneficiaries were enrolled in the program.  The Centers for Medicare & Medicaid Services (CMS) relies on Part D plan sponsors and the Medicare Drug Integrity Contractor (MEDIC) to help CMS detect and prevent fraud, waste and abuse in the Part D program.

The OIG utilized Part D data analytics to identify three main trends that it sees as potential indicators of Part D fraud: increased spending for commonly abused opioids, over 1,400 pharmacies with questionable Part D billing patterns and specific geographic “hotspots” for specific non-controlled drugs.  The OIG provided five examples of hotspots around the country and compared per-beneficiary payment rates in the hotspots to the national averages.

The OIG issued this report in tandem with another document summarizing the work that  has been done thus far by OIG and CMS in identifying and addressing Part D program integrity weaknesses.  It also touched on MEDIC’s increased authority to access claims data from Medicare Parts A and B in its efforts to combat fraud.  This document emphasized that CMS, MEDIC, and Part D sponsors need to increase their efforts to address Part D fraud and abuse.  OIG also pushed for increased data collection, including expanded reporting requirements and drug utilization review programs, and for the implementation of even more robust oversight efforts, including mechanisms to recover payments from Part D sponsors.

Part D sponsors, pharmacies and providers should be keenly aware of the OIG’s continuous efforts to identify and combat against potential areas of fraud in the Part D program.  Active prescribers located in the OIG’s current hotspots should also prepare for increased scrutiny and continue their efforts to maintain compliance programs that can resolve any statistical issues the OIG may identify.

Read the full reports at https://oig.hhs.gov/oei/reports/oei-02-15-00190.pdf and https://oig.hhs.gov/oei/reports/oei-03-15-00180.pdf.

Chelsea M. Rutherford
Chelsea M. Rutherford focuses her practice on corporate, transactional and regulatory matters affecting a wide range of clients in the health care and life sciences industries. Read Chelsea M. Rutherford's full bio.

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