A state audit says Missouri had 33.2 million prescription drug claims totaling $959 million in 2016. The analysis involves the Department of Social Services’ oversight of prescription drug benefits through Medicaid, the Children’s Health Insurance Program (CHIP), and the Missouri Rx (MORx) program.

Audit suggests ways for Missouri to fight prescription drug fraud and abuse

Missouri provides medical services to low-income and vulnerable citizens through the federal Medicaid program and CHIP. State Auditor Nicole Galloway says prescription drugs were available to more than one million Medicaid, CHIP, and MORx participants as of December 31, 2016.

She says the cost of outpatient prescription drugs within Medicaid and CHIP represents 14 percent of all Medicaid and CHIP spending. Between 2010 and 2015, these costs increased by an average of 6.5 percent per year.

Spending for prescription drugs is driven by many factors, including the costs of the drug, number of participants, participant’s health conditions, the treatment participants need, prescribing practices of health care providers, utilization of prescriptions, and controls for approval and payment.

According to Galloway, the number of Medicaid and CHIP participants has fluctuated in recent years; however, the prescription drug payment per participant follows a similar trend to the fluctuation of total prescription drug payments. Payments per participant have dropped by more than $100 (12 percent) from 2015 to 2017.

After peaking in 2015, prescription drug payments declined in calendar year 2016 and even further in 2017. The reductions were a result of the department’s cost-saving methods.

The agency’s procedures to control drug costs include providing incentives to pharmacies who dispense generic drugs instead of brand name drugs, implementing edits in the claims processing system to require the usage of lower cost drugs before higher cost drugs, and actively seeking supplemental rebate opportunities. The incentives given to pharmacies are unknown.

Missouri is the only state in the nation that does not have a comprehensive statewide Prescription Drug Monitoring Program (PDMP) to look for cases of misuse. These programs collect data from pharmacies dispensing controlled substances and make the information available to authorized users through an electronic database.

In July 2017, former Gov. Eric Greitens signed an executive order to create a statewide PDMP. Galloway says the program is inadequate to address fraud and abuse. State Rep. Holly Rehder, R-Sikeston, has pre-filed legislation again that would require the creation of a statewide PDMP program.

Under Greitens’ order, the Department of Health and Senior Services drug program is a voluntary program where dispensers of controlled substances, pharmacy benefit management organizations, and other health care entities can provide data about the prescriber, pharmacy and drug prescribed. However, the dispenser must remove individual patients’ information before sending the data.

Without information on specific patients, Galloway says the program is of limited use to the department for the purposes of detecting prescription drug fraud and abuse. Without the individual patient information, the agency cannot determine if a participant was prescribed controlled substances outside of the program and doctors and pharmacies cannot use the data effectively. Galloway goes on to say since the program is voluntary, the data is likely not complete.

Her office reviewed the geographical data of the prescriber compared to the participants to determine if there was a pattern of a doctor prescribing an abnormal amount of addictive opioid drugs. The analysis also looked for doctors or pharmacies that pull participants from a wide geographical area, which may indicate abuse. The office did not identify any prescribers or pharmacies with prescribing or dispensing patterns indicating abuse.

Galloway says an alternative exists through a PDMP created by St. Louis County. As of August 2018, she says the system includes data from 10 cities and 48 counties in the state.

The data collected by the St. Louis County PDMP includes information about the prescriber, the pharmacy, the patient, and the drug prescribed. She says the information is consistent with what is recommended by the Centers for Medicare and Medicaid Services bulletins for use in detecting prescription drug fraud and abuse in the Medicaid program.

“Each day, more Missouri families feel the effects of opioid addiction, and law enforcement, medical professionals and advocates have been working tirelessly to address the growing problems of opioid misuse and abuse,” says Galloway. “A step in the right direction is ensuring state prescription drug benefit programs have access to available information that could address abuse.”

As a result of recommendations in the report, Galloway says the Department of Social Services has taken steps to access information from the St. Louis County PDMP. Whether the department is actually using the system is unknown.

The audit also recommends additional efforts by the department to ensure federal regulations are followed to gather required prescription drug information from prescribers and prevent payments for unallowable claims.

According to Galloway, the Department of Social Services did not use system controls to require the gathering of National Drug Codes (NDC) for all physician-administered drug claims, which limits the ability of the agency to bill the prescription drug manufacturers for rebates for those drug claims. As a result, approximately $170,000 was paid for drug claims for which no manufacturer rebates could be collected.

By not collecting NDCs on these claims, the DSS did not comply with federal requirements related to drug rebates, and the drug claims for which rebates were not billed are not allowable for federal reimbursement. Galloway says a similar trail was found in a prior audit.

The DSS has controls in the claims processing system to reject claims that lack a code. However, Galloway’s testing found the DSS allowed payment for physician-administered drug claims totaling $170,343 incorrectly submitted as procedural claims (which do not include NDCs) from April through October 2016. Because these claims lacked the required codes, the DSS could not bill the prescription drug makers for rebates as required by federal law.

The DSS identified the erroneous claims and modified the processing system to avoid future problems. Galloway says the department did not recoup these identified improper payments from the providers or reimburse the DHHS for the unallowable costs. As a result, she says 56 drug claims totaling $5,170 for excluded drugs were paid in error during the 4th quarter of 2016.

The prescription drugs associated with the claims were for the treatment of sexual dysfunction or fertility, promoting weight loss, or promoting hair growth. DSS has a manual process in place to update the Medicaid Management Information System (MMIS) to exclude drugs for payment and DSS personnel stated they might have missed these drugs. The questioned claims were not previously authorized for a different purpose.

Galloway’s office searched the Medicaid, CHIP, and MORx participant drug claims to obtain a listing of all Erectile Dysfunction drug claims paid. It obtained a listing of registered sex offenders from the Missouri State Highway Patrol and compared it to the listing of such drug claims.

Her office determined two registered sex offenders obtained the drugs. The claims included documentation the drugs were for medical conditions other than sexual or erectile dysfunctions, which could be allowable in some cases under the program.

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