S. Fla. Inhalation Drug Billings ‘Questionable,’ OIG Says

WASHINGTON — HHS’ Office of Inspector General has found
that Medicare paid South Florida suppliers for up to 10 times more
units of the nebulizer drug arformoterol (brand name Brovana) than
the drug’s manufacturer Sepracor and the three largest wholesalers
distributed in the area in 2008 and the first half of 2009.

According to a Dec. 22 report from the OIG titled “Questionable
Billing for Brand-Name Inhalation Drugs in South Florida,” the $62
million billed by suppliers for arformoterol during the timeframe
“far exceeds the total possible sales in the area.”

After a utilization edit was implemented to detect excessive
claims for the inhalation drug budesonide (brand name Pulmicort
Respules) in September 2008, the OIG found payments to South
Florida suppliers for that drug went down by almost half and
“nearly 30 percent of suppliers that had billed for budesonide in
the six months before the edit completely stopped billing for
budesonide in the six months after the edit.”

But Medicare payments for arformoterol to area suppliers more
than doubled after the budesonide edit was implemented, the OIG
said. Medicare paid for 7 million units of arformoterol, even
though the manufacturer and the three largest wholesalers sold only
750,000 units to South Florida suppliers.

An April 2009 OIG report found that brand-name inhalation drugs
“appear to be especially prone to aberrant billings by South
Florida DME suppliers.” A subsequent OIG
report in August 2009 concluded that pricing and payment
concerns may affect which inhalation drug a supplier provides.

According to the current report, “Although both drugs are
prescribed to treat conditions affecting the lungs, large shifts
from budesonide to arformoterol should not be expected because the
drugs are not interchangeable in terms of approved use or
classification.”

In its report, the OIG recommended that CMS:

• require DME contractors to implement utilization edits in
  high-fraud areas as soon as Medicare begins paying for a brand-name
  drug;
• monitor utilization changes among brand-name inhalation
  drugs;
• strengthen initial claim review processes to focus on
  prevention of improper payments; and
• perform site visits and request documentation to support
  budesonide and arformoterol billings from the South Florida
  suppliers the OIG will refer for further review.

CMS concurred with all four recommendations.

Read the full report at http://oig.hhs.gov/oei/reports/oei-03-09-00530.pdf.