Medicare Part D Inappropriately Paid $25 Million for Schedule II Drug Refills

Of the $2.2 billion paid by Medicare Part D for Schedule II controlled substances in 2009, $25 million was inappropriately paid for prescriptions billed as refills. This conclusion was reached by the HHS Office of the Inspector General (OIG) after an analysis of 1.07 billion prescription drug event records submitted by Part D sponsors to CMS, between January 1, 2009 and December 31, 2009, for each drug dispensed to beneficiaries in their plans. 

Refills of Schedule II Drugs Prohibited

Schedule II drugs have the highest potential for abuse of any prescription drugs available in the United States and may lead to severe psychological and physical dependence. These drugs include narcotics such as morphine, opium, oxycodone (OxyContin), meperidine (Demerol), and fentanyl (Sublimaze or Duragesic) and stimulants such as amphetamine (Dexedine, Adderall) and methylphenidate (Ritalin). The Drug Enforcement Agency (DEA) regulates these Schedule II drugs, and the Controlled Substances Act prohibits the refilling of prescriptions for them.

Additional Schedule II Prohibitions

In addition to the prohibition on refills, Schedule II drugs require a prescription containing the name, address, and signature of a provider who is registered with the DEA. Federal regulations also limit the situations under which partial fills of Schedule II drugs are permissible. A partial fill occurs when a pharmacist dispenses the drug over multiple fills. For example, if a physician prescribes a 28-day supply of a Schedule II drug, the pharmacy does not have to dispense all 28 days at once.  It can dispense four 7-day supplies or two 14-day supplies. Partial fills are not considered refills and must be completed within 72 hours, unless the patient is in a long-term-care facility or terminally ill.  

Findings

The OIG found that Medicare Part D inappropriately paid for 397,203 Schedule II drugs billed as refills, costing $24.6 milion and accounting for two percent of all Schedule II drugs dispensed in 2009.  Fentanyl and oxycodone-acetaminophen (OxyContin) accounted for more than one-half of all these Schedule II refills, according to the report. According to the DEA, fentanyl is a painkiller with effects similar to heroin, but hundreds of times more potent. Oxycodone with acetaminophen is a commonly abused painkiller that provides a euphoric high. According to the Department of Justice, a 100-tablet bottle of 40-milligram OxyContin sells for $2,000 to $4,000 on the street.

Inaccurate Billing

The OIG suspects that some of the 397,203 Schedule II refills in 2009 may have been the result of inaccurate billing of partial fills as refills. The OIG found that of the 12,356 pharmacies that billed for Schedule II refills in 2009, six percent of these pharmacies were long-term-care (LTC) pharmacies.  These LTC pharmacies billed for 75 percent of the Schedule II refills in 2009.  OIG notes that Schedule II drugs billed as refills were often for shorter supplies than nonrefills. For example, 82 percent of Schedule II drugs billed as refills were for less than a month’s supply, while 42 percent of nonrefills were for less than a month’s supply.

Invalid Prescribers

Of the 397,203 refills of Schedule II drugs in 2009, the OIG reports that 25,836 did not have valid prescriber information. Specifically, OIG reports that 2,360 did not have prescriber number, 11,491 had numbers that were not assigned to a provider, and 11,985 listed the identification number of pharmacies, instead of the numbers of individual prescribers. 

Three-quarters of Part D Sponsors Paid for Refills

The OIG also found that of the total of 270 Medicare Part D sponsors that paid for at least one Schedule II drug in 2009, 194 paid for refills. Of this number, 24 sponsors paid for more than 1,000 refills each and three sponsors paid for almost one-half of all refills billed.

OIG Recommendations to CMS

As a result of this study, OIG recommends that CMS: (1) issue guidance to sponsors to prevent billing of Schedule II drug refills and to ensure accurate billing of partial fills; (2) exclude Schedule II refills when calculating payments to sponsors; (3) monitor sponsors to ensure that they validate prescriber identification numbers for Schedule II drugs; and (4) follow-up on sponsors and pharmacies with high numbers of refills.