CMS Proposes New Part D Rule To Combat Fraud and Abuse

October 17, 2017

The Centers for Medicare and Medicare Services (CMS) has recently proposed a new rule to combat fraud and abuse in the Medicare Advantage and Part D prescription drug program. Part D was created in 2003 as part of the new Medicare coverage for prescription drugs. Now, with 10+ years of data to examine, CMS has apparently seen some practices it wants to put an end to.

In what promises to be a major anti-fraud initiative, CMS said on January 6, 2014 that it will close a loophole that allows doctors not enrolled in Medicare to have drugs covered under Medicare Part D. Its proposed new Part D rule also would blacklist physicians whose prescribing practices are reckless. The announcement, included as part of a 678-page proposed rule, follows two inspector general reports last year. Those reports showed that Medicare Part D was paying for drugs written by practitioners who either lacked proper credentials or wrote unusually large numbers of prescriptions for addictive painkillers.

The power to require practitioners to enroll in Medicare, which would take effect next year, was granted to the Centers for Medicare and Medicaid Services in the Affordable Care Act.

“CMS’ fraud and abuse strategy for Part D is data driven,” the agency said in its press release, and apparently the data have shown (once again) that where there are loopholes, fraudsters will flourish — taking advantage of the government’s largesse and “pay now and chase later” system of administering health care claims. The data shows in particular that some doctors are over-prescribing opiates and painkillers, and that some doctors show patterns of abusive and fraudulent prescribing practices. By forcing doctors to enroll in Medicare if they want to submit claims to Medicare, CMS will be taking the logical step of making it easier to monitor and crack down on these abusive practices. The goal is not only to save money, but also to “protect Medicare beneficiaries … from the damaging effects associated with prescription drug abuse.”

There are three central points in the new Part D rule:

1. “CMS is proposing to require that physicians and non-physician practitioners who write prescriptions for coverd Part D drugs must be enrolled in Medicare for their prescriptions to be covered under Part D.”
2. CMS would be able to revoke a physician’s Medicare enrollment if
   a. He or she has shown a pattern of prescriptions that appear to be abusive and/or represents a threat to patient safety,
   b. His or her DEA certificate of registration is suspended or revoked, or
   c. A licensing body of a state where the physician practices has suspended or revoked the physician’s license to prescribe drugs.
3. CMS would also be able to obtain data directly from pharmacies, pharmacy benefit managers, and others who contract with Part D sponsors, in order to streamline the efforts of anti-fraud investigative agencies.

CMS will accept comments on the proposed new Part D rule until March 7, 2014. After that, it will issue final regulations. While there will be comments attacking almost any proposed rule, we believe these commonsense reforms should be implemented. Given that CMS must process millions of claims per day – and pays them electronically unless the computer system kicks them out – it’s essential that the agency have these tools at its disposal. To protect patients and taxpayers, CMS needs to be able to use data to monitor trends and detect abusive patterns and take action against unscrupulous doctors and practitioners.

So, we expect the final regulations to keep the three core concepts listed above.