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.