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CMS Tells Part D Drug Plans to Withhold Pharmacy Payments for Suspicious Claims

Wednesday, December 14, 2011

By James Swann  

The Centers for Medicare & Medicaid Services has instructed all Medicare Part D and Medicare Advantage prescription drug plans that they can withhold pharmacy payments for suspicious claims as part of an effort to reduce fraud and abuse within the program, according to a memorandum released Dec. 13.

Complying with prompt payment requirements does not preclude prescription drug plans from establishing drug utilization management and quality assurance measures to ensure that claims are accurate prior to payment, the memorandum said.

Plans can withhold payment until an investigation has determined that the claim is not fraudulent, the memorandum said.

The policy was announced at a Cabinet meeting chaired by Vice President Joe Biden focused on the administration's Campaign to Cut Waste, which was launched in 2010 with the goal of identifying and eliminating improper payments across the federal government.

Biden said that targeting suspicious Medicare Part D claims reaffirmed the administration's commitment to reducing fraud and protecting taxpayer funds.

Health Fraud Recoveries

In addition to the CMS announcement, Deputy Attorney General James Cole told the Cabinet meeting that the Department of Justice recovered more than $5.6 billion in total fraudulent spending in 2011, $2.9 billion of which was from health care fraud.

Cole said the health care fraud recoveries were the result of a close partnership with the Department of Health and Human Services and that DOJ would continue to support the Medicare Fraud Strike Force concept, which combines DOJ and HHS personnel.

Strike force teams operate in nine cities, and Cole said that in 2011 they brought cases involving more than $1 billion in fraudulent claims.

Tools for Part D Plans

HHS Secretary Kathleen Sebelius said the decision to instruct drug plans on withholding payments on suspicious claims reflected continuing efforts to move away from the existing pay-and-chase enforcement model to a model that would prevent improper payments in the first place.

She said it was also the result of a growing problem with prescription drug abuse.

An Oct. 4 Government Accountability Office report found potential fraud and abuse surrounding prescription drugs such as OxyContin and Percocet, she said, including doctor shopping, where beneficiaries visit several doctors to get prescriptions for the same drugs (193 HCDR, 10/5/11).

“Prescription drug misuse has a serious human and financial cost,” Sebelius said.

“With these actions, we are going to continue to stop fraud before it happens and make sure that those who do defraud taxpayers are held accountable,” she said.

Moving forward, Sebelius said prescription drug plans should communicate more closely with HHS on fraud-related matters.

Prior Authorization, Retrospective Reviews

The CMS memorandum also suggested additional tools Part D plans can use to deter fraud, such as prior authorization programs and retrospective reviews.

Under a prior authorization program, a physician would have to submit a form and get approval from the plan before being able to fill out a beneficiary's prescription.

Part D plans can create prior authorization programs that target drugs with a high risk of abuse, such as OxyContin, the memorandum said.

Part D plans also can conduct retrospective reviews of all their prescription drugs, and “if a pattern of overutilization of opioids is determined through beneficiary-level retrospective review, sponsors can require documentation to determine medical necessity and may deny payment for subsequent claims if insufficient evidence is obtained to substantiate Part D coverage eligibility,” the memorandum said.

Plans should also work with physicians to prescribe fraud-prone drugs for fewer than 30 days, according to the memorandum.

Sen. Thomas R. Carper (D-Del.), whose Homeland Security and Governmental Affairs subcommittee held hearings on the GAO report, said he was pleased with the focus on prescription drug fraud.

“While there is no silver bullet to solve all of our nation's fiscal woes, the aggressive fraud prevention tactics introduced today are part of our broader effort to reduce fraud and curb the federal deficit,” Carper said in a Dec. 13 statement.


The CMS memorandum is at http://op.bna.com/hl.nsf/r?Open=jswn-8phrtp. The GAO report is at http://www.gao.gov/products/GAO-12-104T.  

 

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