Unauthorized prescribers bilk Part D out of $5.4 million

Estimates of the cost of fraud in the Medicare system range broadly from $17 billion to $90 billion. However, there are no estimates of - or methods to detect - how much of the wasted money is attributable to old-fashioned human error rather than to blatant crime.

A recent study from the Office of the Inspector General (OIG) found that Medicare Part D inappropriately paid for $5.4 million worth of prescription drugs in 2009 that were ordered by individuals who clearly do not have any authority to prescribe drugs, such as massage therapists and dieticians. The report raises concerns about waste as well as patient safety.

However, OIG does not further quantify how the inappropriate prescriptions were generated, which individuals or practices were involved, or why pharmacies filled the orders, said Lee Lasris, founding partner of South Florida’s Health Law Center.

“It’s too complicated a set of relationships to simply say there’s a lot of inappropriate prescribing,” Lasris said. “Are we talking about criminal conspiracy, or are we talking about mistakes?”

More than 29,000 of the inappropriate orders prescribed controlled substances and were written by nearly 5,000 different individuals without the authority to do so. Drugs most commonly prescribed include Simvastatin, Lisinopril, Hydrocodone-acetaminophen, Amlodipine besylate, and Levothyroxine sodium.

Possible explanations

Even with today’s electronic prescribing systems, logistical mistakes still occur in prescribing practice. Most electronic systems employ drop-down menus designed to help users quickly fill data fields. It seems plausible that medical office staff could accidentally choose the wrong name from a menu. Or, at the pharmacy, a technician could enter a legitimate prescriber’s information incorrectly, resulting in a mistaken reference to a provider unauthorized to prescribe.

“All kinds of people are connected to medical doctors who think they might be doing something the right way, and they’re part of a process that can break down,” Lasris said. “If I operate under authority or personal supervision of a doctor and he instructs me to write down the order, and an office clerk doesn’t attach the physician’s name to it and it just goes out, then it’s not as evil a situation as it seems to be in the OIG report.”

For drugs that have street value, such as hydrocodone, the second most-prescribed drug in the report, the obvious explanation would be fraud, Lasris said.

“If the pharmacy fills a controlled-substance prescription and the Drug Enforcement Administration number is not on there, the pharmacy is supposed to inquire, at least. Otherwise the pharmacy violates the law,” he said. “But that’s up to the states to jerk the license or put the pharmacy out of business.”

Plan responsibility

The Centers for Medicare and Medicaid Services (CMS) also noted that the Part D database used to create the OIG report could contain incorrect information. In a time when Medicare spending is under close scrutiny, OIG recommends that Part D plan sponsors be responsible for verifying providers before prescription claims are paid. CMS agrees.

In fact, New Jersey Congressman Frank Pallone Jr. indicated last month that he wants to introduce legislation to require Part D plans to verify the prescribers for controlled substance prescriptions before paying the claim. While Congress does have regulatory authority over Part D sponsors, it does not regulate the pharmacies that fill the orders. Pharmacy regulation is done at state level.

Under OIG’s recommendation and Pallone’s proposal, a drug claim originating from an inappropriate prescriber could be rejected and payment denied, although the initial fill would still be completed.

Worst offenders

In all, OIG studied 14 provider types that have no authority to prescribe and found 72,552 inappropriate prescriptions at a cost of $5.4 million. Nutritionists topped the list with more than 700 individuals writing 20,044 prescriptions inappropriately.

The report also singled out certain states. California had 25% of the inappropriate prescription claims and Florida had 20%.

“Florida ranks high on every bad deed that they find that involves improper Medicare payments,” Lasris said. “Make no mistake, Florida is a laughingstock when it comes to Medicare fraud and healthcare fraud in general. There’s a lot of ‘smoke’ here, and typically when there’s smoke, there’s fire. We do get our share of criminal convictions.”

It could be argued that the report is simply a way for Medicare to deny certain payments, he said, but the analysis does not go far enough to identify the real problem.

In March, FDA proposed that certain prescription drugs be moved to a new category that would allow pharmacists to have some prescribing authority for patients with chronic conditions and regular drug regimens. Not surprisingly, delegates of the American Medical Association reviewed and opposed the idea last month.

Julie Miller is Editor in Chief of Modern Healthcare Executive, in which this article also appears.