Pharmacies and DMEs Under Scrutiny By OMIG

The New York State’s Office of the Medicaid Inspector General (OMIG) recently released the agency’s 2012-2013 workplan. The agency’s focus remains firmly on fighting fraud, waste and abuse, compliance and self-disclosure, and provider education.  We look closer at how the OMIG plan impacts pharmacy and durable medical equipment (DME) businesses.

Under the new workplan, the agency has formed multidisciplinary teams, known as business line teams, that will review the following categories of services in the Medicaid program: 1) Managed Care; 2) Medical Services in an Educational Setting; 3) Home and Community Care Services; 4) Hospital and Outpatient Clinic Services; 5) Mental Health, Chemical Dependence, and Developmental Disabilities Services; 6) Pharmacy and Durable Medical Equipment; 7) Physicians, Dentists and Laboratories; 8) Residential Health Care Facilities; and 9) Transportation.

The pharmacy and durable medical equipment business line team will review: 1) claiming accuracy, 2) prescription and durable medical equipment; 3) inventory reviews; 4) drug diversion; and 5) improper use of atypical antipsychotics.

When reviewing for claiming accuracy, OMIG will review pharmacies’ billing for prescriptions, fiscal orders, or DME items that were not furnished, contain inaccurate data in claims, billed more than once, or were a consequence of inappropriate drug therapy, missing information about medical necessity, early refills, black box medications, and off-label use.

With respect to prescription and durable medical equipment, OMIG’s focus is on identifying prescription and/or DME utilization patterns that are inconsistent with medical necessity. OMIG will assist managed care organizations to create edits to self-identify enrollees who abuse prescriptions as well as assist MCOs in placing managed care enrollees who abuse prescriptions and/or DME into the MCO restricted recipient program.

OMIG will also conduct inventory reviews to determine whether the pharmacy had ordered at least the volume of drugs or DMEs necessary to fill the prescriptions that were claimed.

The agency will also review pharmacies for drug diversions, identifying high users of potentially diverted medications as well as pharmacists, orderers, and other providers/enrollees who participate in drug diversion.

Finally, OMIG’s pharmacy and DME business line will review residential facilities’ use of atypical antipsychotics to determine whether nursing facility residents were being chemically restrained and whether these drugs are being used consistent with federal law and FDA direction.

If you have questions about New York State OMIG audits, documentation requirements or need legal assistance, please contact us.