NCPA Offers Ways to Curb Fraud, Waste and Abuse in Government Prescription Drug Programs

Published Online: Wednesday, February 27, 2013

Alexandria, Va. February 27, 2013 - The National Community Pharmacists Association (NCPA) submitted a statement for the record today to the U.S. House Energy and Commerce Health Subcommittee for its hearing on "Fostering Innovation to Fight Waste, Fraud and Abuse in Health Care." NCPA's statement called for pharmacy audits to focus on true waste, fraud and abuse as opposed to clerical errors and for policymakers to examine mail order waste in federal health programs.

"The fiscal integrity of government programs requires finding effective and efficient ways of rooting out fraud, waste and abuse," said NCPA CEO B. Douglas Hoey, RPh, MBA. "When the right patient receives the right medication as prescribed, at the right time and for the correct price, that shouldn't be a punishable offense. Pharmacy audits should focus on finding real malfeasance. Instead, clerical errors are being utilized to pad the middleman's profits on the backs of health care providers. In addition, policymakers must achieve greater oversight of waste generated by mail order auto-shipping as well as transparency to better manage and evaluate contracts with pharmacy benefit managers."

NCPA's statement noted the following:

  • The Centers for Medicare & Medicaid Services (CMS) should require auditing entities to focus on true fraud, waste and abuse. Many Medicare providers were actually underpaid upon closer examination, according to the Feb. 5 U.S. Department of Health and Human Services (HHS) report Recovery Auditing in the Medicare and Medicaid Program. Moreover, nearly half (43.6 percent) of claims deemed to be overpayments were reversed in favor of providers upon appeal.

  • Medicare acknowledges egregious pharmacy auditing, noting in the 2014 draft Call Letter that, "[t]he increasing incidence of these adjustments for 'routine clerical errors' rather than incorrect payment amounts (financial errors) may be related to the incentives in contingency reimbursement arrangements with claim audit vendors." Medicare added, "[w]e are concerned that the growing practice of post-audit total claim recoupments from pharmacies is distorting Part D payment, as well as compromising Part D data integrity and impairing our ability to oversee the program."

  • Waste through mail order auto-shipping is rampant. Medicare has received complaints from beneficiaries about auto-shipping of excessive or unneeded medical products and has documented such incidences. Recently, in front of the House Small Business Committee, a Medicare official testified that from a selected group of beneficiaries that ceased ordering DTS in 2011, 60 percent of these beneficiaries had over 10 months' worth of diabetes testing supplies on hand, likely as a result of mail order auto-shipping. In addition, NCPA strongly encourages an audit of the TRICARE mail order program, given the many examples of mail order waste observed by NCPA members.

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