Life Science Compliance Update

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June 25, 2013

HHS OIG Reports Small Percentage of Prescribers May be Overutilizing Part D Drugs

Recently we reported that ProPublica had launched a new effort known as "Prescriber Checkup", which allows anyone with internet access to look up on a searchable website what drugs their physician is prescribing under Medicare Part D and how much they are being reimbursed.

Consequently, the Office of Inspector General (OIG) for the U.S. Department of Health and Human Services (HHS) recently released a report raising concerns about the "Questionable" prescribing patterns of approximately 700 physicians (Less than .07%) who participate in the Part D program. In fact, the OIG report cites ProPublica's Prescriber Checkup on page 2 of its report.

OIG developed five measures to describe Part D prescribing patterns and to identify general-care physicians with questionable patterns. Those measures were (1) average number of prescriptions per beneficiary; (2) total number of pharmacies associated with each prescriber, (3) percentage of prescriptions that were for Schedule II drugs, (4) percentage of prescriptions that were for Schedule III drugs, and (5) percentage of prescriptions that were for brand-name drugs. OIG found that

  • A total of 1.1 million individual prescribers ordered over 1 billion drugs/prescriptions paid by Part D in 2009 (paying $70.7 billion). Prescribing varied widely by specialty.
  • Over 700 general-care physicians had questionable prescribing patterns. Each of these physicians prescribed extremely high amounts for at least one of the five measures we developed. For example, many of these physicians prescribed extremely high numbers of prescriptions per beneficiary, which may indicate that these prescriptions are medically unnecessary.
  • More than half of the 736 general-care physicians (which OIG called "very extreme outliers) with questionable prescribing patterns, including extremely high percentages of Schedule II or III drugs, which have potential for addiction and abuse. Although some of this prescribing may be appropriate, OIG maintained that "such questionable patterns warrant further scrutiny."

This report is a view into things to come under the Sunshine Act, as OIG relied on several of the same factors CMS will rely on including: (1) NPI #; (2) name as reported in the NPPES database; (3) National Drug Code (NDC); and (4) specialty. For example, OIG explained that it identified each prescriber's specialty based on the primary taxonomy code that he or she reported in the NPPES. The taxonomy code indicates a provider's specialty and subspecialty, if any. For example, it may indicate that a prescriber is a family-medicine physician specializing in geriatric medicine.

OIG then grouped the taxonomy codes for similar specialties. For example, it grouped all of the nurse practitioners together and all of the dentists together. It considered general-care physicians to be general practitioners, family practitioners, and internal medicine practitioners with no specialization or a specialization in adults or geriatrics. OIG calculated each group's average for the five measures listed above.

Based on these findings, discussed further below, OIG expressed a need for "increased oversight of Part D." Consequently, OIG made four recommendations, all of which CMS concurred with:

  1. Instruct the Medicare Drug Integrity Contractor (MEDIC) to expand its analysis of prescribers,
  2. Provide sponsors with additional guidance on monitoring prescribing patterns,
  3. Provide education and training for prescribers; and
  4. Follow up on prescribers with questionable prescribing patterns. CMS concurred with all four recommendations.

With respect to the first recommendation, OIG stated that that CMS should work with the MEDIC to ensure that it effectively and systematically monitors prescribers to identify those with questionable patterns. Therefore, "taking specialty into account is an important step in identifying prescribers with questionable patterns," OIG wrote. This recommendation highlights a predicted concern stemming from the Sunshine Act—that OIG and CMS will be using the reporting of a physician's specialty to raise flags or concerns about particularly payments associated with drugs/devices.

For example, if a physician's specialty does not match the particular drug he or she is receiving payment for, this may suggest to OIG or CMS one of two things. First, that the drug is being prescribed or used off-label and such use may have been induced through off-label promotion by the manufacturer, causing a violation of the FDCA for misbranding and the resulting payment by the federal government of a false claim under the False Claims Act; or such prescribing may have been induced by improper payments or kickbacks, which would violate the Anti-Kickback Statute.

This is particularly relevant because OIG acknowledged in the report that while some prescriptions or prescribing patterns (above average) may have been necessary, "prescribing high amounts on any of these measures may indicate that a physician is prescribing drugs which are not medically necessary or that he or she has an inappropriate incentive, such as a kickback, to order certain drugs."

Second, the reporting or analysis of a physician's specialty and prescribing patterns may raise concerns about the reimbursement and medical necessity of the prescribed drug. The CMS reimbursement standard for drugs is medically necessary, which is different from FDA's safe and effective use. If an off-label use of a drug is listed in one of CMS' three (3) recognized compendia, then CMS typically pays for such off-label use. However, there have been recent settlements and allegations that some companies have fraudulently had their drugs listed in such compendia either by false or inaccurate data or improperly drafted or created research articles.

Either way, OIG's suggestion and already present use of physician specialty, coupled with the Sunshine Act publication and aggregation of NPI# and specialty may create challenges for physicians and manufacturers moving forward. This report clearly confirms the predictions of many in the industry that OIG, CMS and other federal and state healthcare enforcement agents will be looking at the upcoming Sunshine Act database to question large or unusual payments, such as those discussed in the OIG report as well as the previously written story on ProPublica's "Prescriber Checkup." In fact, ProPublica wrote a piece discussing OIG's report, noting that it "echo[ed]" and "mirror[ed]" ProPublica's investigation.

OIG Report

CMS relies on sponsors to help safeguard Part D from fraud and abuse. CMS requires sponsors to have compliance plans that contain measures to detect, prevent, and correct fraud, waste, and abuse. CMS recommends that sponsors use data analysis as a part of these plans. Specifically, it recommends that sponsors develop indicators and establish baseline data so that they can recognize abnormalities and changes in prescribing patterns.

CMS recently issued guidance recommending that sponsors use data analysis as part of their Drug Utilization Review programs to identify beneficiaries who may be over utilizing opioids. Opioids include Schedule II controlled substances, such as oxycodone, morphine, and fentanyl. CMS also recommended that sponsors communicate with prescribers to ascertain the medical necessity of these drugs.

Last year, the government spent $62 billion subsidizing the drugs of 32 million people.

Under the Medicare Part D program, CMS contracts with private insurance companies, known as sponsors, to provide prescription drug coverage to beneficiaries who choose to enroll. OIG said it conducted the study because in recent years, prescription drug abuse has emerged as a serious and growing problem (7 million people in the U.S. were misusing prescription drugs in 2010) and with the rise in prescription drug abuse, "concerns about Medicare fraud, particularly prescriber fraud, have increased."

OIG based its analysis on Prescription Drug Event records. Sponsors submit these records to CMS for each drug dispensed to beneficiaries enrolled in their plans. Each record contains information about the pharmacy, prescriber, beneficiary, and drug. OIG analyzed all of the records for drugs billed in 2009, which covered nearly 87,000 general-care physicians.

While OIG raised concerns about Schedule II and III drugs, on average, only 4% of the prescriptions from each prescriber were for Schedule II drugs, and only 7% on average for Schedule III. The breakdown for Schedule II was:

  • 14% ordered by physical medicine and rehabilitation specialists; and
  • 11% for both surgeons and anesthesiologists
  • 2% was for general-care physicians
  • ~0.3% for cardiologists and endocrinologists

The breakdown for Schedule III drugs:

  • Surgeons, emergency medicine specialists, and dentists, on average, ordered >14%
  • 3% were ordered by general-care
  • Cardiologists and gastroenterologists rarely prescribed these

While there was concern about the use of brand-name drugs, the OIG report found that on average, only "about a quarter of prescriptions were for brand-name drugs;" the national average was 27% for brand-name drugs. This is consistent with numerous reports that doctors prescribe or patients receive over 75% generic drugs. 16 % of prescribers did not order any brand-name drugs, while 10 percent of prescribers ordered 60% or more of their prescriptions as brand-name.

Ophthalmologists, pulmonologists, and endocrinologists commonly ordered brand-name drugs. More than half the prescriptions ordered by prescribers in these specialties were for brand-name drugs, on average. In contrast, 28 percent of the prescriptions ordered by general-care physicians were for brand-name drugs. Dentists prescribed only an average of 9 percent brand-name drugs. However, OIG recognized that these differences may be due to the availability of generic equivalents for the drugs commonly used by these specialties.

The review found more than 2,200 doctors whose records stood out in one of several areas: prescriptions per patient, brand name drugs, painkillers and other addictive drugs or the number of pharmacies that dispensed their orders. From this 2,200, the 736 "very extreme outlier" physicians received $352 million in Part D drugs. Los Angeles and New York had greatest numbers 34 and 32 physicians respectively. Philadelphia (22), Tampa (19), and Detroit (15) had the next-largest numbers.

While on average, each prescriber ordered prescriptions for 80 beneficiaries and averaged 6 prescriptions per beneficiary, more than half of the prescribers ordered fewer than 100 Part D prescriptions each during the year.

  • General-care physicians accounted for 20 percent of all prescribers in 2009 and ordered two-thirds of all of Part D prescriptions in 2009.
  • Dentists were the second most common type of prescriber, but were responsible for just 1 percent of Part D prescriptions overall.
  • Nurse practitioners and physicians' assistants were also common prescribers; together they represented 11 percent of prescribers and were responsible for a little less than 6 percent of the Part D prescriptions.
  • Interestingly, psychiatrists accounted for only 3% of all prescriptions; surgeons were less than 1%, and cardiology was only 5%.
  • Infectious disease specialists ordered an average of 11 prescriptions per beneficiary and nephrologists ordered an average of 10.
  • Emergency medicine specialists ordered an average of two prescriptions per beneficiary

Further, on average, prescribers ordered drugs that were dispensed at 32 pharmacies. Half the prescribers ordered drugs that were dispensed at 17 or fewer pharmacies. Cardiologists, endocrinologists, and rheumatologists had the highest number of pharmacies that filled the drugs they ordered; each had an average of more than 80 pharmacies per prescriber. An average of 52 pharmacies filled the drugs ordered by each general-care physician.

But this number makes sense because specialists are often in high demand and patients are willing to travel much further, sometimes even across state lines to see a specialist, hence the additional number of pharmacies. Dentists and nurse practitioners had fewer pharmacies that filled their prescriptions, averaging 12 and 23, respectively.

Nevertheless, ProPublica chose to point out the "extreme outliers, for instance, 24 doctors who wrote more than 400 prescriptions for at least one patient, including refills dispensed; and one Ohio physician who did so more than a dozen times. However, the average doctor wrote 13 per patient. In another case, an Illinois doctor had prescriptions filled by 872 pharmacies in 47 states and Guam. General-care doctors, on average, had prescriptions for all their Medicare patients filled by 52 pharmacies.

Medicare paid $9.7 million for the prescriptions of one California doctor alone – that is 151 times more than the cost of an average doctor's tally, the report says. Most of this physician's drugs were supplied by just two pharmacies, both of which had previously been identified by the inspector general as having questionable billing practices.

Sen. Tom Coburn of Oklahoma, a physician, said no one wants Medicare to tell doctors which drugs to prescribe. But the government does have a responsibility in preventing fraud and abuse, he said to ProPublica.

OIG Recommendations

OIG's second recommendation echoes the points made above. OIG wants CMS to "emphasize the importance of using data analysis to identify prescribers with questionable patterns" and specifically, wants "sponsors compare physicians with similar specialties when conducting such analysis."

With respect to education and training, OIG recommended that CMS provide prescribers with reports comparing their prescribing patterns to their peers.' Similar to the Comparable Billing Reports issued for other services, such as Part B, these reports would provide prescribers with important educational information and insight about their prescribing patterns. OIG also said that CMS should conduct a communication and educational campaign for prescribers about the overutilization of prescription drugs. Specifically, the campaign should

  • Raise awareness about prescription drug abuse and to remind prescribers that Part D only covers drugs that are used for medically indicated purposes; and
  • Educate prescribers about what constitutes Medicare fraud and the potential consequences of committing it.

Given the high number of primary care physicians prescribing opioids, it will be interesting to see if OIG, and CMS reach out to FDA to incorporate their concerns into the recently finalized class wide REMS for opioids, and if all three agencies will welcome stakeholders from the continuing medical education (CME) industry to the table to help address these concerns and assist with the educational and training comments (as is already required under FDA's REMS).

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