MassHealth Improperly Paid Pharmacies for Prescription Drugs Totaling $982,535.

Audit found that the program improperly paid for 25,144 prescription claims, totaling $982,535, during the two-and-a-half-year audit period. The total number of prescriptions filled during this period was 43,579,259.

Overview

We reviewed a total of 43,579,259 prescription drug claims paid by MassHealth, totaling $1,716,217,958, during the period January 1, 2015 through June 30, 2017 and found that MassHealth improperly paid 25,144 of these claims, totaling $982,535, as detailed below.

MassHealth Paid Pharmacies for Unauthorized Prescription Drug Refills Totaling $300,863.

MassHealth improperly paid some pharmacies for more refills than had been prescribed. For example, in one instance, a MassHealth member was prescribed a 30-day supply of the drug amphetamine, with no refills. However, the member received two unauthorized 30-day-supply refills, which gave them a total 90-day supply of a drug with a high potential for abuse. During our audit period, MassHealth paid pharmacies a total of $300,863 for 4,332 prescription drug refills that exceeded the allowable number of refills authorized by prescribers.

Authoritative Guidance

According to MassHealth Pharmacy Program regulations in Section 406.411(C) of Title 130 of the Code of Massachusetts Regulations (CMR),

1. The MassHealth agency does not pay for prescription refills that exceed the specific number authorized by prescriber. . . .
   (5)  The absence of an indication to refill by the prescriber renders the prescription nonrefillable.

Reasons for Issue

The Pharmacy Online Processing System (POPS), MassHealth’s system for processing pharmacy drug claim data, lacks sufficient system controls to prevent payments to pharmacies for drug claims that exceed the number of drug refills authorized by prescribers.

Auditee’s Response

MassHealth does not agree with this finding . . . and believes that a substantial number of the claims identified in this finding were appropriately paid. Specifically, MassHealth is aware that some pharmacy providers had software issues during the audit period that would have resulted in otherwise appropriate claims being flagged in MassHealth’s system as either “incorrect fill number” or “inconsistent authorized refill number,” and therefore authorized payment for those claims in order to ensure continued access to care to pharmacy services for impacted members. Other claims included by OSA in the finding originated from long-term care pharmacies, which typically dispense medication based on doctor’s orders rather than traditional prescriptions, which can also trigger flags for “incorrect fill number” or “inconsistent authorized refill number,” even when the claim is legitimate. Nevertheless, MassHealth has implemented system changes to eliminate the potential for future concerns similar to those raised by OSA—claims flagged for “incorrect fill number” were set to deny as of 10/24/17 and claims flagged for “inconsistent authorized refill number” were set to deny as of 5/29/2018.

Auditor’s Reply

As noted above, during our audit period, MassHealth paid pharmacies a total of $300,863 for 4,332 prescription drug refills that exceeded the allowable number of refills authorized by the prescriber. In its response, MassHealth states that there are a number of reasons these claims were paid and asserts that some payments may have been legitimate. However, according to the documentation we reviewed, MassHealth paid some pharmacies for more refills than had been prescribed, and therefore none of the claims in question should have been paid. Based on its response, MassHealth is making system changes to address this problem.

MassHealth Paid $526,229 for Refills of Emergency (i.e., Non-Refillable) Drug Fills.

MassHealth paid pharmacies for refills of emergency (i.e., non-refillable) drugs. MassHealth allows pharmacies to dispense an appropriate emergency supply of MassHealth-covered drugs to ensure that members are provided with an uninterrupted drug supply (for instance, when they have lost their supply of an existing prescription) or to fill a new prescription outside normal business hours that would normally require MassHealth’s prior authorization. Typically, emergency drug fills treat serious, chronic conditions, such as high blood pressure, diabetes, asthma, and seizures. However, providing back-to-back emergency drug fills—in other words, refills of emergency drug fills—may jeopardize a member’s health if the member’s medical condition is not being monitored by a physician. MassHealth improperly paid $526,229 for 5,649 non-refillable prescriptions for drugs.

Authoritative Guidance

According to 130 CMR 406.411(B),

When the pharmacist determines that an emergency exists, the MassHealth agency will pay the pharmacy for at least a 72-hour, non-refillable supply of the drug. [Emphasis added.]

Reasons for Issue

POPS lacks sufficient system controls to prevent payments to pharmacies for refills of non-refillable emergency drug fill claims.

Auditee’s Response

To the extent that OSA is using the term “back-to-back emergency fills” to mean the same prescription number was used for successive emergency fills of a drug, MassHealth agrees with this finding and will recover the identified overpayments. In addition, MassHealth has implemented system changes to eliminate the potential for future concerns—claims where an emergency override is attempted more than once on the same prescription number were set to deny as of 2/5/19. However, MassHealth notes that its regulations do not prohibit a pharmacy provider from dispensing sequential emergency fills if each emergency fill has a different prescription number.

Auditor’s Reply

Within each set of claims that we identified in our report as back-to-back emergency fills, each claim used the same prescription number. Therefore, MassHealth improperly paid these claims. Based on its response, MassHealth is taking measures to address our concerns in this area.

MassHealth Improperly Paid $155,443 for Over-the-Counter Drugs Supplied to Members Living in Institu

MassHealth improperly paid pharmacies for over-the-counter (OTC) drugs prescribed to members living in nursing facilities or skilled nursing facilities.⁸ Although MassHealth covers the cost of certain OTC drugs prescribed to members to treat minor ailments, such as skin injuries or indigestion, or to supplement dietary needs, regulations prohibit it from paying for OTC drugs supplied to members living in facilities. Further, commonly used OTC drugs, such as antacids and aspirin, are typically stocked and dispensed by such facilities, which may be reimbursed for the cost of those drugs at state-contracted rates. As a result of this issue, MassHealth overpaid pharmacies $155,443 for 15,163 OTC drug claims.

Authoritative Guidance

According to 130 CMR 406.421(B), “MassHealth does not pay for over-the-counter drugs . . . provided to institutionalized members.” (MassHealth Pharmacy Program officials told us that they define institutional settings as nursing facilities and skilled nursing facilities.)

Reasons for Issue

POPS lacks sufficient system controls to prevent payment to pharmacies for OTC drugs supplied to MassHealth members living in institutional settings.

Auditee’s Response

While MassHealth agrees that some pharmacies were paid for over-the-counter (OTC) drugs prescribed to members living in nursing facilities, and has enhanced system capabilities as of 12/14/17 to better prevent improper claims for OTC drugs provided to institutionalized members, MassHealth believes this finding may be overstated. Specifically, the First Data Bank (FDB), the database upon which MassHealth and many pharmacy providers rely for this information, changed the designation of certain drugs from “prescription” to “OTC” in 2018. MassHealth believes that drugs designated as “prescription” during the audit period but that have since been designated by FDB as “OTC” were appropriately paid, and should not be included in this finding.

Auditor’s Reply

Changes in First Data Bank regarding the designation of certain drugs—changes from “prescription” to “OTC”—occurred after our audit period. Therefore, all of the claims identified in this report as paid to pharmacies for OTC drugs prescribed to members living in nursing facilities or skilled nursing facilities were accurately described as improperly paid.

Based on its response, MassHealth is taking measures to address our concerns in this area.

Recommendation

MassHealth should ensure that system controls are developed and implemented in POPS to prevent payments to pharmacies for unauthorized prescription drug refills, refills of emergency (non-refillable) drug fills, and OTC drugs supplied to members living in institutional settings.

8.    Nursing facilities provide long-term care and custodial assistance to patients. Skilled nursing facilities provide temporary rehabilitation services to patients to meet a specific medical need or to allow recovery outside a hospital setting.

Date published:	August 29, 2019