Real-Time Data Savings: Invalid DEA Numbers

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1 Annual Phar mac yrepor t

2 Introduction U.S. pharmacies are being impacted by regulatory changes that have evolved out of increased governmental concern over prescription drug abuse, Medicare/Medicaid waste and fraud, and other types of healthcare-related misconduct. In the last year, these changes have had tremendous legal and logistical implications for pharmacies. The reclassification of hydrocodone combination products (HCPs) to Class II drugs was one of the most significant changes affecting pharmacies. Alarming trends of overdose and death have made combating prescription opioid abuse a high priority for the U.S. Department of Health and Human Services (HHS). According to a report by the Centers for Disease Control and Prevention (CDC), 16,235 drug-poisoning deaths in 2013 involved opioid analgesics such as hydrocodone, oxycodone and morphine. From , the rate of drug-poisoning deaths quadrupled from 1.4 to 5.1 per 100, As early as 1999, hydrocodone combination products (HCPs), a class of opioid analgesics, were determined to be among the most popular pharmaceutical drugs associated with drug diversion, trafficking, abuse, and addiction by addiction medication specialists. 2 In 2008, the Drug Enforcement Agency (DEA) began seeking additional scientific and medical evaluations, as well as recommendations, for rescheduling HCPs to Class II drugs. Passage of the Food and Drug Administration Safety and Innovation Act of 2012 accelerated efforts to get HCP abuse and deaths under control. Despite differing opinions by the FDA and DEA, HCPs were upscheduled to Class II drugs, effective October 6, The legal and logistical impact of this change upon pharmacies cannot be overstated. Since 2007, hydrocodone has been the most prescribed drug in the U.S., totaling over 135 million prescriptions in Due to the reclassification, thousands of prescribers are no longer authorized to write prescriptions for commonly used medications: In the weeks following implementation of the new rule, warning messages to HDS pharmacy clients regarding ineligible Schedule II prescribers increased 20 times. Legally, non-compliance of the reschedule can lead to severe monetary fines for pharmacies. Avoiding these consequences places an extraordinary burden on pharmacies, whose systems must be updated to reflect now non-eligible prescribers as well as verify DEA credentials in real-time prior to filling HCP prescriptions. The HCP reschedule is just one example in which pharmacies are being challenged to update their systems and processes to keep pace with regulatory requirements. As this whitepaper demonstrates, a real-time prescriber validation service such as Healthcare Data Solutions (HDS) Prescription Validation Subscription Service (PVSS) is a cost-effective solution that saves pharmacies millions in potential DEA fines as well as a multi-faceted solution that prepares pharmacies for other regulatory changes that require up-to-date prescriber data. 1 Centers for Disease Control and Prevention. (2015). Rates of Deaths from Drug Poisoning and Drug Poisoning Involving Opioid Analgesics United States, Accessed at htm. 2 American Society of Addiction Medicine. (2015). Rescheduling Hydrocodone Combination Products: Addressing the Abuse of America s Favorite Opioid. Accessed at 2

3 Real-Time Data Savings: Invalid DEA Numbers In 2015, efforts to control epidemic cases of prescription drug abuse are gaining momentum through intense enforcement action by the DEA. In an unprecedented effort to crack down on dirty prescribers, Pharmacists and pharmacies, the DEA recently launched a 15-month operation in high-abuse states Arkansas, Alabama, Louisiana and Mississippi. Dubbed Operation Pilluted, nearly 300 arrests have been made across the four states, including 22 arrests of doctors and Pharmacists. The operation is just one part of the DEA Diversion Control s plan to increase enforcement efforts. The second part will bring a renewed focus on regulatory oversight of DEA registrants by increasing the frequency of compliance inspections, and educating DEA registrants on compliance with the Controlled Substances Act. This renewed focus on oversight has important implications for all pharmacies, which are required to validate DEA numbers prior to filling prescriptions for controlled substances. Valid DEA numbers consist of two letters, six digits and one check digit. Verifying DEA numbers manually is a time-consuming process requiring a four-step process: 1) adding the first, third and fifth digits of the DEA number; 2) adding the second, fourth and sixth digits of the DEA number; 3) multiplying the result of Step 2 by two; and 4) adding the result of Step 1 to the result of Step 3. With millions of hydrocodone prescriptions issued every year, it is clear that this process is not only impractical for pharmacies but also highly prone to errors mistakes which can cost a pharmacy $25,000 per invalid claim. Thus, utilizing a validation solution that flags prescribers with invalid DEA numbers in real time is not only cost-effective but also essential for the modern pharmacy. An analysis of data from HDS Prescriber Validation Subscription Service revealed that a single mid-size pharmacy received 113,975 messages about invalid DEA numbers from January 2015 June Figure 1. HDS Analysis of PVSS Response Messages - Invalid DEA Numbers Response Message - DEA Invalid # Flagged HDS indicates the DEA number belongs to a Pharmacist. Verify. 2,345 HDS indicates the DEA number belongs to a Pharmacy. Verify. 602 HDS indicates the DEA number may represent an Organization. Verify. 94,614 HDS indicates the prescriber DEA is expired. Verify prescriber. 979 HDS indicates the prescriber DEA is inactive. Verify prescriber. 4,004 HDS indicates the prescriber DEA is not found. Verify prescriber. 8,726 HDS indicates the prescriber DEA is retired. Verify prescriber. 2,705 Potential Total Saved ($25,000 per claim) $2,849,375,000 3

4 Real-Time Data Savings: Inactive Prescribers Medical licensure is subject to state laws, which vary in terms of administrative and disciplinary action, as well as monetary fines. Using California as an example, licensure to practice medicine must be renewed every two years. Physicians must apply for a license renewal within 90 days of the expiration date and must be renewed before the expiration date; there is no grace period. Medical licenses that have not been renewed on the date of expiration are automatically changed to delinquent status. 3 Physicians who wish to retain their medical license even when they are not actively practicing must apply for an inactive license. While Physicians with inactive licenses are not legally obligated to comply with continuing medical education (CME) requirements, they are not legally allowed to practice medicine in California. Because the laws vary from state-to-state, it is essential for pharmacies to have processes and tools in place to accurately and efficiently verify the practicing status of prescribers each time a prescription is received. Physicians who practice with an expired license may be subject to a citation and fine from the Board. Pharmacies that fill prescriptions from prescribers with expired or inactive licenses are also subject to monetary fines. Analysis of data from HDS Prescriber Validation Subscription Service revealed that a single mid-size pharmacy received 25,747 messages about inactive prescribers from January 2015 June Figure 2. HDS Analysis of PVSS Response Messages - Inactive Prescribers Response Message - "No Longer Practicing" # Flagged Prescriber no longer practicing. {0} allows fills at pharmacist discretion. 8,795 Prescriber no longer practicing. {0} does not allow fills. Verify. 1,210 Prescriber no longer practicing. HDS unable to clarify state regulations. Verify. 14,823 Prescriber no longer practicing. Verify {0} rules for Rx fill and timeframes. 919 Potential Total Saved ($100 - $50,000 per claim) $2,574,000 - $1,287,350,000 3 Medical Board of California. (2013). Guide to the Laws Governing the Practice of Medicine by Physicians and Surgeons. Accessed at 4

5 Real-Time Data Savings: OIG Exclusions Under the American Recovery and Reinvestment Act of 2009 (Recovery Act), the Office of Inspector General (OIG) implemented an Exclusions list as part of its accountability objectives to mitigate fraud, waste and abuse of all Federal healthcare plans. Any individual or entity placed on the OIG Exclusions list may not receive funding from Federally funded healthcare plans. Pharmacies that fill prescriptions issued by a prescriber on the OIG exclusions list will be assessed a civil monetary penalty (CMP) of $10,000 per prescription. As of January 1, 2015, CMS identified 68,000 prescribers who were removed from Medicare due to licensure issues, operational status, or OIG exclusions. There are two types of OIG exclusions permissive and mandatory and both individuals and entities can be placed on the OIG Exclusions list. With permissive exclusions, the OIG has discretionary authority to exclude individuals or entities for the unlawful manufacture, distribution, prescription or dispensing of controlled substances; suspension, revocation, or surrender of a license; submission of false or fraudulent claims to a Federal healthcare program; defaulting on a health education loan; or controlling a sanctioned entity as a manager, officer or owner. 4 With mandatory exclusions, the OIG is required by law to exclude individuals or entities from participating in Federally funded healthcare programs for Medicare/Medicaid fraud; patient abuse or neglect; felony convictions of other healthcare-related fraud, theft or financial misconduct; and felony convictions relating to unlawful manufacture, distribution, prescription, or dispensing of controlled substances. 5 While the OIG provides an online searchable database of List of Excluded Individuals and Entities (LEIE), pharmacies utilizing this method to verify OIG exclusions must exit their internal systems a practice subject to human error. Downloading the LEIE list provides an alternative, but requires pharmacies to match that list to their prescriber database, which is a time-consuming and error-prone method of validation. Pharmacies must also ensure that prescribers do not have any sanctions against them from the State License Board and are not on a State Medicaid Exclusions list prior to filling prescriptions. The amount of time and effort required to acquire that data and match the records to an internal database is unrealistic for modern pharmacies. Analysis of data from HDS Prescriber Validation Subscription Service revealed that a single mid-size pharmacy received 5,475 messages about OIG exclusions from January 2015 June Figure 3. HDS Analysis of PVSS Response Messages - OIG Exclusions Response Message - "OIG Exclusions" # Flagged HDS indicates prescriber is on OIG exclusions list. Verify prescriber Potential Total Saved ($10,000 per claim) $54,750,000 4 Hess, Thomas. (2014). OIG Exclusion List: What it Means, What You Should Do. Accessed at 5 Ibid. 5

6 Real-Time Data Savings: Invalid NPI Numbers Many pharmacies still manually verify prescriber National Provider Identifier (NPI) numbers through the NPI Registry a time-consuming, labor-intensive method that requires exiting an internal system. Utilizing the NPI registry to verify NPI numbers is also ineffective and prone to error: the NPI Registry does not reflect a prescriber s current data such as name changes, address changes and changes in provider s status all of which are essential for accurately validating the right prescriber. To be considered valid, NPI numbers must follow a specific taxonomy: a 10-digit number beginning with 1, 2, 3 or 4. Additionally, an NPI number for a Type 1 entity (solo practitioner) must also match the provider s social security number. Pharmacies that fill prescriptions with invalid NPI numbers are subject to call backs, rejected reimbursements and withdrawals of payment. Analysis of data from HDS Prescriber Validation Subscription Service revealed that a single mid-size pharmacy received 23,774 messages about invalid NPI numbers from January 2015 June Figure 4. HDS Analysis of PVSS Response Messages - Invalid NPI Numbers Response Message - "NPI Invalid" # Flagged HDS indicates the prescriber NPI is inactive. Verify prescriber. 3,240 HDS indicates the prescriber NPI is not found. Verify prescriber. 10,925 HDS indicates the Prescriber NPI is for an Organization. Verify. 9,609 Total Records Flagged 23,774 6

7 Emerging Concerns Part D Benefit Changes Federal efforts to reduce Medicare Part D fraud and abuse recently led to regulatory changes on May 1st, when the Centers for Medicare & Medicaid Services issued an interim final rule (regulation CMS-4159-F) revising requirements related to beneficiary access to covered Part D drugs. Under this new rule, any Physician or other eligible healthcare professional must now either enroll in or opt out of the Medicare program in order to prescribe drugs to patients who receive Part D prescription drug benefits. 6 As of 2014, there were 54 million people on Medicare with access to the Part D prescription drug benefit. The interim final rule is effective January 1, Compliance with the new rule places an additional burden upon pharmacies to employ practices and tools that can identify whether a prescriber is currently enrolled in or opted out of Medicare. Currently, 1,348,294 Physicians and eligible professionals are either enrolled in Medicare on an approved status or have an opt-out affidavit on file. 7 CMS estimates that 31 percent of providers will be impacted by this change. 8 With 54 million people on Medicare with access to the Part D prescription drug benefit, this change will affect millions of prescriptions every year. The combination of this regulatory change with the skyrocketing number of prescriptions filled at retail pharmacies estimated to surpass 4 billion in 2016 has created an urgent need for pharmacies to utilize a solution designed to meet regulatory demands. HDS Prescription Validation Subscription Service is a solution that performs real-time validations of Medicare opt-outs, OIG and Medicaid exclusions, medical licensing and more. The rule also impacts pharmacies and other healthcare organizations at a human resources level. Any healthcare entity that employs an individual that it knew or should have known was excluded from participation in Federal healthcare programs are in violation of the Civil Monetary Penalties Law. In 2015 alone, several healthcare entities have paid hundreds of thousands of dollars each for employing excluded healthcare professionals. Pharmacies and other healthcare organizations can mitigate violations by utilizing a solution like HDS Medical License Monitor, which performs automated checks on employee medical licensing information, OIG & Medicaid exclusions, Medicare Opt-Outs, SAM exclusions and more. Pharmacist Provider Status Currently, CMS-4159-F requirements do not apply to prescribing Pharmacists, but they must still have an active and valid individual NPI number and are still required to meet all other Part D coverage requirements. The trend towards Pharmacist provider status may change that, and pharmacies should be prepared. In 2015 alone, 75 state bills addressing Pharmacist provider status on some level were introduced. Thirtyeight states currently have some form of Pharmacist provider status written in their state code or Medicaid provisions, but the lack of definition as providers remains a significant barrier. 6 Centers for Medicare & Medicaid Services. (2015). Part D Prescriber Enrollment About. Accessed at 7 Center for Medicare & Medicaid Services. (2015). Medicare Individual Provider List. Accessed at 8 Centers for Medicare & Medicaid Services. (2015). File Specifications for Practitioner/Non-Practitioner Enrollment and Opt-Out Status from Provider Enrollment, Chain and Ownership System (PECOS). Accessed at 7

8 Granting Pharmacists provider status at the Federal level could pave the way for greater definition. The introduction of and bipartisan support for provider status bills H.R. 4190, H.R. 592 and S. 314 indicate that the push for Federal Pharmacist provider status could be achieved. Advocates of Pharmacist provider status at the Federal level assert that it is not only necessary for meeting the medical needs of those in medically underserved areas but is also essential for ensuring that Pharmacists receive payment for their services including Medicare payments. Conclusion The demands of modern healthcare are placing extraordinary pressures on pharmacies to replace outdated, inefficient processes with solutions that not only provide real-time access to the most current data available but are also designed to meet changing regulatory requirements as they occur. While failure to implement the proper controls has always had consequences, the Federal government s reinvigorated focus on enforcement has increased the risk of civil monetary fines, administrative actions, and rejected reimbursements. Pharmacy solutions from Healthcare Data Solutions are helping pharmacies of all sizes respond to regulatory pressures quickly and cost-effectively. To learn how our Prescription Validation Subscription Service (PVSS) and Medical License Monitor can help you meet regulatory demands, streamline processes, and reduce the risk of costly fines, visit or call us today at

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