Alleviating Confusion and Preventing Fraud: PHARMACEUTICAL MARKETING STRATEGY
Now that the federal gover nment is paying a significant portion of prescription drug expenses for the elderly, it is considered fraudulent for pharmaceutical companies to use incentives to encourage the use of expensive branded products. Attention is being focused on pharmaceutical patient assistance programs (PAPs) and pharmacy rebates.
Patient Assistance Programs
Recently, the OIG issued a Special Advisory Bulletin. The message informed drug manufacturers that the OIG had determined that allowing the companies’ PAPs to subsidize a patient’s cost-sharing for their prescription drugs could violate the federal anti-kickback statute. As a result of the OIG’s concern about fraud, PAPs will need to be eliminated or reconfigured to be in compliance with the statute.
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Rebates
Another potential type of fraud involves rebates from pharmaceutical companies to pharmacy providers, especially long-term-care pharmacy providers.4 The CMS has stated that when a long-term-care pharmacy that is part of a Part D plan’s network continues to receive access or performance rebates from a manufacturer for drugs dispensed under Part D, these benefits must go to the Medicare beneficiaries who purchase those drugs.
The basis of this concern is the extent to which a long-term-care pharmacy is being paid by a manufacturer to move market share in the context of a Part D plan without the knowledge or approval of a plan. Such a situation raises the same concerns about increased program and beneficiary costs; if a manufacturer is paying price concessions to long-term-care pharmacies in exchange for formulary access or moving market share, these pharmacies may be inducing a demand for higher-tiered or nonformulary drugs, thus actually increasing the costs to the plan and the government. cheap prescription drugs online
The CMS believes that the clear intent of Congress, as demonstrated in the framework of the MMA provisions, is that the benefits of discounts, rebates, and other price concessions on covered Part D drugs provided by Part D plans should accrue to beneficiaries. When discounts, rebates, or other price concessions related to Part D drugs purchased for enrolled beneficiaries are diverted to entities other than Part D plans, the costs to the Medicare Trust Fund and to Medicare beneficiaries are increased.
Given that Medicare will pay nearly 100% of the costs of the drug benefit for institutionalized individuals, the CMS believes that only one policy is consistent with the MMA’s position on long-term-care pharmacies that are part of a Part D plan’s network—that rebates or other price concessions paid based on covered Part D drugs purchased with these dollars should accrue to the government. This philosophy could easily evolve to influence the CMS’s position on direct-to-consumer advertising and product sampling.
BILLING MEDICARE
Fraud may also occur when health care providers and suppliers bill Medicare for services that were never provided or received. Under Medicare Part D, PDPs receive 80% reinsurance for individual beneficiaries who spend more than $3,600 out of pocket; this is the point at which a beneficiary has received more than $5,100 in total medications. This has created a situation in which Medicare Advantage plans benefit financially from shifting coverage of medications from Medicare Part B to Medicare Part D. Although some of this maneuvering is legal, there is a concern that companies might shift expenses or might document claims that are not legitimate. In such an event, the federal government would be paying for products and services that were never purchased.
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Of course, this type of fraud is not new. Under the Health Insurance Portability and Accountability Act (HIPAA) of 1996, which authorized the start of the Medicare Integrity Program, the government was able to collect nearly a half-billion dollars in connection with health care fraud cases in the program’s first year. Most of this initial focus involved billing fraud.
