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OIG Reports on CMS Validation Procedures for Part D Prescriber Identifiers.

The Department of Health and Human Services (HHS) Office of Inspector General (OIG) recently released a report on the effectiveness of Centers for Medicare and Medicaid Services (CMS) validation procedures for prescriber identifiers on Medicare Part D (“Part D”) claims.  Specifically, the OIG determined whether CMS policies and procedures were effective in validating prescriber identifiers on Part D prescription drug event (PDE) records for 2016.  The OIG has previously identified prescriber identifiers on PDE records as a valuable program integrity safeguard.  Prescriber identifiers enable CMS and Part D plan sponsors to determine if legitimate practitioners have prescribed covered drugs for Medicare enrollees.  As of 2016, the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) required pharmacy claims for covered Part D drugs to contain valid prescriber National Provider Identifiers (NPIs).  MACRA also required the HHS Secretary to establish procedures for determining the validity of these prescriber NPIs.  Additionally, the law required OIG to report to Congress on the effectiveness of these procedures by January 1, 2018.  To that end, the OIG conducted the recent review to: 1) determine how many invalid NPIs were used as prescriber identifiers on PDE records; and 2) identify CMS’s procedure for ensuring validity of prescribers’ NPIs on Part D drug claims.

Under the Social Security Act, Part D plan sponsors are required to submit certain information to CMS as a condition of payment.  This information includes Plan D PDE records which are electronic records that plan sponsors submit to CMS for each covered prescription they fill.  PDE records must include prescriber identifier information to enable CMS to administer the Part D benefit.  In 2010, the OIG reported that more than 18 million prescription drug claims contained invalid prescriber identifiers, representing an estimated $1.2 billion in drug costs paid to pharmacies from Medicare drug plans and enrollees.  The following year, the OIG submitted a report on 2007 Schedule II drug costs finding that the drug costs for PDE records with invalid prescriber identifiers totaled approximately $20.6 million for nearly 228,000 PDE records.

The OIG compared the prescriber NPIs on 2016 PDE records submitted to CMS with the NPIs listed in CMS’s National Plan and Provider Enumeration System (NPPES) file, to conduct its review.  The NPPES is the system of record for health care providers’ NPIs.  The OIG considered prescriber NPIs to be invalid if: (1) they did not appear in the NPPES file; or (2) they appeared in the NPPES file but had been deactivated before January 1, 2015, and remained deactivated through 2016.  It also developed and administered a questionnaire for CMS personnel regarding the relevant CMS validation procedures.  The OIG used the questionnaire responses and additional CMS documentation as part of its evaluation.

The OIG found the following:

  • Nearly all PDE records for 2016 Part D drug claims contained valid prescriber identifiers.
    • In 2016, Part D plans submitted 1.5 billion PDE records to CMS for covered drugs. The OIG found that only 147 of these records contained invalid prescriber identifiers, representing $19,122 in Part D payments.  Further, the 147 PDE records were associated with only 70 invalid prescriber identifiers.
    • One of the 70 invalid prescriber identifiers did not match any NPI contained in the NPPES database. The identifier contained an incremental sequence of numbers in the first nine positions of the identifier.
    • 69 prescriber NPIs found on the PDE records had been deactivated in NPPES prior to January 1, 2015.
    • Forty Part D plan sponsors each submitted at least one PDE record that contained an invalid prescriber NPI. From those forty, three plan sponsors accounted for half of the PDE records that contained invalid prescriber NPIs.
  • CMS has “system edits” to reject PDE records with invalid prescriber identifiers.
    • CMS is able to review Part D prescriber information on PDE records through its system edits, once Part D plans submit the PDE records. CMS uses two system edits to determine whether prescriber identifiers are valid NPIs: Edits 833 and 834.  Edit 833 is used to determine whether the prescriber identifier is an individual NPI in CMS’s current NPPES file.  CMS uses Edit 834 to determine whether the date of service for PDE records is more than one year after the prescriber NPI has been deactivated.  Edit 833 functions as a reject edit whereas Edit 834 functions as an informational edit to account for prescriptions beyond the one-year time period.
    • In the case of one invalid prescriber NPI, the OIG found that the same identifier was used in the prescriber and service provider fields of the PDE records. As a result, it bypassed CMS’s PDE editing system.  CMS is in the process of attempting to modify its edit logic to avoid such occurrences.  If unable to do so, CMS will perform data analysis to exclude PDEs with invalid NPIs.
    • With respect to the 69 prescriber NPIs that had been previously deactivated in NPPES, the OIG found that CMS accepted these PDE records because Edit 834 was operating as an informational edit at that time.
  • CMS recommended procedures for Part D plan sponsors to ensure their proper use of prescriber NPIs.
    • On June 1, 2015, CMS issued a memorandum to all Part D plan sponsors describing its existing Part D claims procedures regarding prescriber NPIs and NPI requirements under MACRA Section 507.
    • CMS stated that a Part D plan sponsor communicates whether or not a submitted prescriber NPI is active and valid, at point of sale to the pharmacy.
    • If the sponsor determines that the prescriber NPI is active and valid, then the sponsor pays a claim.
    • If the sponsor determines that the prescriber NPI is not active and valid, but the pharmacy corrects the NPI or confirms that the NPI is active and valid through verification of updated information, then the sponsor pays the claim.

The OIG report concluded that the current CMS system edits are effective in ensuring the validity of most Part D prescriber NPIs.

The OIG report is available at: