Barred physicians prescribed millions in Medicare drugs

The Centers for Medicare & Medicaid Services allowed physicians barred from prescribing under Medicare Part D to order more than $15 million in drugs from 2006 to 2008, an investigation by the Dept. of Health and Human Services Office of Inspector General has found.

In addition to allowing the prohibited physicians to prescribe, CMS approved nearly an additional $2 million for prescriptions that may have come from excluded doctors, said the Dec. 23, 2011, report (link).

In response to the audit, CMS said it has taken significant actions in recent months to ensure that payments are not made to physicians who have been barred from prescribing, according to a response letter sent to the OIG. The agency also is keeping more up to date on its list of excluded physicians and paying closer attention to physician-identifier data. An identifier is the unique number assigned to each physician and required on all pharmacy claims submitted under the Part D program.

As part of its audit, the OIG found:

• CMS allowed private prescription drug plans or Medicare Advantage plans to use state license numbers as physician identifiers. State license numbers may be duplicated from one state to the next and "cannot reliably verify that a provider is not excluded," the report said. A prescriber's national provider identifier number should be used instead. NPIs are assigned by CMS to identify health professionals on health care transactions.
• CMS failed to properly transfer updates to plans regarding newly barred physicians. The OIG's office provides monthly updates to CMS about physicians excluded from prescribing under Part D, but CMS did not provide plans with timely access to this database.
• CMS did not have a system in place to reject data submitted by plans for prescriptions written by excluded doctors.

In its audit, the OIG recommended that CMS strengthen its internal controls to ensure that excluded drug prescribers are not paid under the Part D program and that the agency conduct better research into physician identifiers. CMS no longer should allow state license numbers to be used as identifiers and should establish a better system to catch excluded physicians who continue to prescribe under Part D, the OIG concluded.

CMS has started validating the format of all prescriber identifiers and will exclude from payment any prescription claims with invalid identifiers. Starting this year, CMS also will conduct system reviews to validate identifiers received from Part D plans and assess how accurate each identifier is, said Tony Salters, a CMS spokesman. Plans will be rated on the validity of the identifiers used and notified of their performance level, he said.

CMS will continue to permit drug plans to use different forms of physician identifiers, including state license numbers, Salters said, but plans must ensure that these identifiers are active and valid. Starting in 2013, CMS will limit prescriber identifiers on Part D claims to national provider identification numbers only.