Lincare Pharmacy Services Inc. Generally Complied With Medicare Requirements When Billing for Inhalation Drugs

For calendar years 2014 and 2015, Lincare Pharmacy Services Inc. (Lincare), which is located in Clearwater, Florida, generally complied with Medicare requirements when billing for inhalation drugs. Of the 100 claim lines in our sample, 97 complied with the requirements. However, the remaining three sampled claim lines did not comply with Medicare requirements. Specifically, the beneficiaries' medical records did not support that the beneficiaries had conditions for which the use of inhalation drugs was considered reasonable and necessary. As a result, Lincare received $48 in unallowable Medicare payments.

These overpayments occurred because Lincare did not review the beneficiaries' medical records before billing Medicare. However, Lincare informed us that, beginning in May 2016, its practice was to review the medical records for each inhalation drug order to verify that the drug being prescribed was considered reasonable and necessary for the beneficiary's diagnosis. Because the change in Lincare's practice occurred after our audit period, we did not verify that the practice was effectively implemented.

We recommended that Lincare ensure that the medical necessity of inhalation drugs is adequately supported in beneficiaries' medical records before billing Medicare. Lincare concurred with our recommendation and provided information on actions that it had taken or planned to take to implement our recommendation.