Life Science Compliance Update

June 25, 2015

High Prescribing Connecticut APRN Charged With Accepting Kickbacks; Comes On Heels Of Connecticut Sunshine Law Targeting APRNs

CT

The U.S. Attorney’s Office of the District of Connecticut has announced that an Advanced Practice Registered Nurse (APRN) practicing in the state has admitted to receiving $83,000 in kickbacks—mostly as a speaker at dinner programs—by an unnamed drug manufacturer. The press release states that Heather Alfonso was a “heavy prescriber” of a drug used to treat cancer pain. They noted that a review of Medicare Part D prescription drug events for prescribers of the drug showed that Alfonso was responsible for more than $1 million in claims and was the highest prescriber of the drug in Connecticut. However, the government found through interviews with Alfonoso’s Medicare Part D who were prescribed the drug, revealed that most of them did not have cancer, but were taking the drug to treat their chronic pain.

This latest press release is notable for several reasons:

First, Connecticut recently passed a law requiring manufacturers to report their transfers of value made to APRNs practicing in Connecticut. This group includes nurse practitioners, clinical nurse specialists, nurse anesthetists, and nurse midwives. APRNs are excluded from the reporting obligations under the Federal Physician Payments Sunshine Act, but Connecticut passed this disclosure requirement as part of a new initiative allowing APRNs to practice and prescribe independently of physicians. This law was originally supposed to go into effect July 1, 2015, but was recently pushed back to 2017. This latest enforcement action illustrates that the reporting law may have been passed with kickbacks to APRNs in mind.

Second, this announcement is the latest of many in the last week alone by the government targeting Medicare Part D. Last week, the Department of Health and Human Services announced the largest ever Medicare Fraud Strike Force sweep, with charges brought against 243 individuals for approximately $712 million in billings. More than 44 of the defendants arrested were charged with fraud related to Part D. The HHS Office of Inspector General a couple of days ago also released two reports that similarly target Part D fraud. “OIG has seen an increase in Part D fraud complaints,” the agency states. “As such, OIG has made Part D fraud a top priority.” The roll-out of several Medicare Part D related enforcement actions over the last few days clearly indicates that fact. 

Third, the government's focus on the prescriber side of the kickback equation signals their increasing likelihood to bring enforcement actions against individuals, rather than (or in addition to) the traditional focus on companies. While the Department of Justice and state attorneys have long said that the increased data streams allow for more targeted enforcement actions, we are now seeing the fruits of their data analysis. 

Fourth, this announcement targets speaker programs--arrangements the DOJ has noted are "prone to abuse." The Connecticut U.S. Attorney's Office reveals that Alfonso was paid $83,000 by a drug manufacturer, which she admitted influenced her prescribing of the drug. The press release states that she was a speaker for more than 70 dinner programs at a rate of approximately $1,000 per event.  "In many instances, the dinner programs were only attended by Alfonso and a sales representative for the drug manufacturer," the release states. "In other instances, the programs were attended by individuals, including office staff and friends, who did not have licenses to prescribe controlled substances.  For the majority of these dinner programs, ALFONSO did not give any kind of presentation about the drug at all."

Finally, the government's focus on pain meds--and looking to stem their abuse--is another notable trend. 

  

June 24, 2015

OIG Continues Fight Against Medicare Part D Fraud and Abuse With Two New Reports

OIG REPORT FRAUD

Last week, the Department of Health and Human Services announced the largest ever Medicare Fraud Strike Force sweep, with charges brought against 243 individuals for approximately $712 million in billings. More than 44 of the defendants arrested were charged with fraud related to the Medicare prescription drug benefit program known as Part D. The HHS Office of Inspector General has now released two reports that similarly target Part D fraud. “OIG has seen an increase in Part D fraud complaints,” the agency states. “As such, OIG has made Part D fraud a top priority.”

Their first report, Ensuring the Integrity of Medicare Part D, summarizes OIG’s body of work in the Part D arena and provides an update on the Center of Medicare and Medicaid Services’ efforts to address the weaknesses in Part D program integrity that OIG has identified. Second, Questionable Billing and Geographic Hotspots Point to Potential Fraud and Abuse in Medicare Part D looks at the spike in spending on commonly abused opioids over the last decade, targets pharmacy related fraud schemes related to opioids, and identifies “geographic hotspots” for certain noncontrolled drugs.

Ensuring the Integrity of Medicare Part D

The first report provides a useful summary of numerous OIG investigation, audits, evaluations, and guidances related to Medicare Part D. OIG notes that around 39 million beneficiaries receive Part D benefits through more than 2,000 plans sponsored by private companies. Payments for Part D drugs are approximately $121 billion per year. OIG also outlines the “key players” in protecting Part D: “Part D plan sponsors are responsible for monitoring and paying Part D drug claims,” they state. “CMS is responsible for overseeing the program, and has contracted with the MEDIC [the Medicare Drug Integrity Contractor) to perform program integrity functions.” The MEDIC is required to investigate potential fraud and abuse referred to it through external sources, such as complaints, as well as identify potential fraud and abuse through proactive methods, such as data analysis.

OIG Examples of Part D Fraud(source: OIG: "Ensuring the Integrity of Medicare Part D," June 18, 2015)

“Over the last 9 years, plan sponsors, the MEDIC, and CMS have taken steps to address OIG recommendations in these areas, and progress has been made,” states OIG. However, OIG notes that Part D remains vulnerable to fraud. Particularly, OIG finds that the program’s underlying vulnerabilities “cluster around two issues involving all three levels of program oversight (plan sponsors, the MEDIC, and CMS).” First, is the need to more effectively collect and analyze program data to proactively identify and resolve program vulnerabilities and prevent fraud, waste, and abuse before it occurs; and second, is the need to more fully implement robust oversight designed to ensure proper payments, prevent fraud, and protect beneficiaries.

"To fully protect Part D from fraud, waste, and abuse, CMS should take further action and implement OIG's unimplemented recommendations," OIG advised.

Specifically, CMS should:

  • (1) require plan sponsors to report all potential fraud and abuse to CMS and/or the MEDIC;
  • (2) require plan sponsors to report data on the inquiries and corrective actions they take in response to fraud and abuse;
  • (3) expand drug utilization review programs to include additional drugs susceptible to fraud, waste, and abuse;
  • (4) implement an edit to reject prescriptions written by excluded providers;
  • (5) exclude Schedule II drug refills when calculating final payments to plan sponsors at the end of each year;
  • (6) seek authority to restrict certain beneficiaries to a limited number of pharmacies or prescribers;
  • (7) develop and implement a mechanism to recover payments from plan sponsors when law enforcement agencies do not accept case referrals;
  • (8) determine the effectiveness of plan sponsors' fraud and abuse detection programs; and
  • (9) ensure that plan sponsors' compliance plans address all regulatory requirements and CMS guidance.  

Download the complete report.

Questionable Billing and Geographic Hotspots Point to Potential Fraud and Abuse in Medicare Part D

OIG's second report focuses on what the agency deems "questionable billing" related to frequently abused opioids (including OxyContin, hydrocodone-acetaminophen, fentanyl, and morphine sulfate). "Since 2006, Medicare spending for commonly abused opioids has grown faster than spending for all Part D drugs," OIG states. 

"OIG investigations have identified pharmacy-related fraud schemes in Part D," the report states. "These schemes include drug diversion, billing for drugs that are not dispensed, and kickbacks." While pharmacy-related fraud schemes often involve commonly abused opioids, they can also involve noncontrolled drugs. OIG found that more than 1,400 pharmacies had questionable billing for Part D drugs in 2014, as indicated in the following table. Notably, OIG indicated somewhat ominously: "[a]lthough some of this billing may be legitimate, all of these pharmacies warrant further scrutiny. To followup on these pharmacies, OIG will conduct investigations and audits. As appropriate, we will also refer pharmacies to other law enforcement agencies and to CMS."

Pharmacies with Questionable Billing

OIG's report also identifies "geographic hotspots for certain noncontrolled drugs," which they describe as metropolitan areas where average Medicare payments per beneficiary for certain drugs are significantly higher than the average payments nationwide. "Although medical necessity and prescribing patterns may vary across different areas of the country, these patterns raise questions about whether these drugs were medically necessary or were provided to beneficiaries," OIG states. "The diversion of noncontrolled substances is becoming more common, and fraud related to these drugs can present a significant financial loss to Medicare."

OIG hotspots

"The billing patterns in hotspots raise questions about whether these drugs were medically necessary or were actually provided to beneficiaries," OIG concludes. "Also, because some of these drugs are available as generics or over the counter, there are questions about whether pharmacies are billing for the higher priced brand-name drug but providing a less expensive drug."

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As OIG explicitly states, Medicare Part D fraud is a top priority for the agency. The two reports, along with the extensive Part D-related enforcement actions last week, shows that the government has already put a lot of time into analyzing Part D prescription trends and what they deem to be abnormalities. OIG's latest recommendations to CMS to step up its oversight could foretell even greater enforcement. 

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