OIG Audit Divulges Extensive Inappropriate Use of Medicare Part D Eligibility Verification Transactions

by | Feb 19, 2020 | Compliance News

The Department of Health and Human Services’ Office of Inspector General (OIG) performed a review, which showed that a lot of pharmacies and other healthcare organizations are wrongly using the information of Medicare beneficiaries.

OIG carried out the audit since the HHS’ Centers for Medicare and Medicaid Services (CMS) asked for it to find out if there was incorrect access and usage of Medicare recipients’ details by mail-order and retail pharmaceuticals and other healthcare organizations, for example, doctors’ offices, treatment centers, hospitals and long-term treatment facilities.

CMS was troubled that a mail-order drugstore and other healthcare organizations were not making use of Medicare Part D Eligibility Verification Transactions (E1 transactions) correctly, which ought to be utilized solely for confirming Medicare recipients’ qualifications for particular policy benefits.

OIG made the review to find out if E1 transactions were merely being employed for their designed intent. Considering that E1 transactions consist of the protected health information (PHI) of Medicare beneficiaries, they may probably be employed for scams or other destructive or wrong intentions.

There are two components in an E1 transaction: a request and a response. The healthcare organization submits an E1 request which consists of an NCPDP provider ID number or NPI, coupled with primary patient demographic details. The request is sent to the transaction facilitator who complements the E1 request details with the information kept in the CMS Eligibility archive. A response is consequently given, which consists of a beneficiary’s Part D coverage details.

CMS picked one mail-order drugstore and 29 companies for the review performed. Of the 30 entities reviewed, 25 utilized E1 transactions for an intent other than invoicing for prescriptions or to know drug coverage order if beneficiaries got a few insurance plans. 98percent of the E1 transactions of those 25 companies weren’t related to prescriptions.

OIG learned that companies were getting coverage details for beneficiaries with no prescription medications. The companies are utilizing E1 transactions for assessing sales prospects, several providers had granted marketing firms to file E1 transactions for sales purposes, companies were getting data pertaining to personal insurance coverage for stuff not included in Part D, long term care facilities had received Part D coverage making use of batch transactions, and E1 transactions were sent by 2 non-pharmacy firms.

The HIPAA covers E1 transactions and implements the basic essential conditions. PHI needs to be safeguarded against unauthorized access whenever it is being digitally stored or sent between covered entities. The review findings indicate that there’s HIPAA violation and that this might well be a countrywide concern. As per the results of the review and evident prevalent incorrect access and usage of PHI, OIG is going to extend the reviews nationally.

OIG thinks these concerns have occurred because CMS hasn’t totally enforced controls to keep an eye on providers who are sending big numbers of E1 transactions compared to prescriptions given; CMS has yet to provide clear direction not to utilize E1 transactions for advertising purposes; and CMS hasn’t limited non-pharmacy access.

Subsequent to the review, CMS took additional steps to keep an eye on violations of the eligibility confirmation system and will be having suitable enforcement actions in instances of misuse are identified. OIG has advised that CMS ought to give clear guidance on E1 transactions and make sure that exclusively pharmacies and other certified businesses file E1 transactions.

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