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Report (OEI-02-09-00608)

Medicare Inappropriately Paid for Drugs Ordered by Individuals Without Prescribing Authority

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Under Medicare Part D, CMS contracts with private insurance companies, known as sponsors, to provide prescription drug coverage to beneficiaries who choose to enroll. In recent years, prescription drug abuse has emerged as a serious and growing problem. The Centers for Disease Control and Prevention has characterized prescription drug abuse as an epidemic. With the rise in prescription drug abuse, concerns about Medicare fraud, particularly prescriber fraud, have increased.


We based this study on an analysis of all Prescription Drug Event records from 2009. Sponsors submit these records to CMS for each drug dispensed to beneficiaries enrolled in their plans. We matched each record to the National Plan and Provider Enumeration System to determine the prescriber type, such as physician or dentist. We selected 14 types that clearly did not have the authority to prescribe and identified the drugs they prescribed nationwide. We also identified 7 other types for a more in-depth review in the 10 States with the highest Part D payments.


Nationwide, Part D inappropriately paid for drugs ordered by individuals who clearly did not have the authority to prescribe, such as massage therapists, athletic trainers, home contractors, interpreters, and transportation companies. This raises concerns about the appropriateness of Part D payments and about patient safety. In 10 States, Part D also inappropriately paid for drugs ordered by other individuals without the authority to prescribe, such as counselors, social workers, and chiropractors. Tens of thousands of these drugs were controlled substances. These drugs are of particular concern because they have potential for abuse.


Our findings show the need for increased oversight of prescribers. We recommend that CMS (1) require sponsors to verify that prescribers have the authority to prescribe drugs, (2) increase the Medicare Drug Integrity Contractor's monitoring of prescribers, (3) ensure that Medicare does not pay for prescriptions from individuals without prescribing authority, and (4) follow up on the individuals without prescribing authority who ordered prescriptions. CMS concurred with all four recommendations.

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