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OIG Plans to Scrutinize Medicare Part D Drug Claims

Robert A. Vito, Acting Assistant Inspector General, CMS Audits, testified before the Subcommittees on Federal Financial Management of the Senate Homeland Security and Governmental Affairs Committee on Preventing and Recovering Government Payment Errors. In his testimony, Mr. Vito expressed concern over OIG’s June 2010 report on Invalid Prescriber Identifiers on Medicare Part D Drug Claims, which revealed that CMS and its plan sponsors have not adequately performed one of the most basic oversight checks in Medicare Part D – ensuring that a drug was prescribed by a physician. The result lead to Part D sponsors and beneficiaries paying pharmacies $1.2 billion in 2007 for claims in which the prescriber identifiers listed on the claims did not correspond to practicing physicians.

One of the reasons for this vulnerability is the use of invalid prescriber identifiers on Part D claims. CMS contracts with sponsors to administer the Medicare Part D benefit and pay Part D claims. Sponsors then must submit electronic records, called prescription drug event (PDE) records, to CMS for any covered prescription that is filled, which usually requires an identifier for the drug’s prescriber. However in the June 2010 report, it was found that more than 18 million PDE records contained invalid prescriber identifiers in 2007, representing 2 percent of the nearly 1 billion PDE records submitted to CMS that year.

Therefore, the OIG is proposing that Part D claims with invalid prescriber identifiers should be subjected to further review. The OIG recommends that, instead of implementing prepayment edits, CMS conduct periodic reviews to ensure the validity of prescriber identifiers used on PDE records. Additionally, CMS should require sponsors to institute procedures to flag any Part D claims with invalid identifiers in the prescriber identifier field.

The OIG therefore plans to ensure that Part D claims contain valid prescriber identifiers so that CMS and its contractors will no longer have difficulty performing oversight functions such as verifying the prescriber’s licensing information, determining whether the prescriber has been the subject of disciplinary actions for inappropriate activities or tracking potential over-prescribing issues.

For questions or concerns regarding government investigations of providers, please contact Robert S. Iwrey, Esq., of The Health Law Partners at (248) 996-8510.

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