You absolutely must read a scary (but kinda entertaining) letter from Senator Charles Grassley (R-IA) to the U.S. Secretary of Health and Human Services about phantom pharmacies—“empty store fronts, apparently without customers, that nonetheless billed millions of dollars to private insurers.”What’s even more amazing is the fact that a private insurer spent a year trying to get CMS to address the fraud. Meet the new boss!
The Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) requires Part D plans to pay pharmacies within 14 calendar days for electronically-submitted prescription claims. Should I feel better that e-fraud has now been streamlined?
Some choice highlights from Senator Grassley’s letter:
- A Miami area pharmacy billed the insurer $26,000 for antipsychotics and inhalers during a three day period. The owners soon disappeared, their lease in default and store empty of inventory.
- A second Miami pharmacy billed the insurer $245,000 in false claims in less than three months. The owner subsequently abandoned the facility and bought a one-way ticket to Europe, where he is at large.
- Another Los Angeles area pharmacy had no inventory and no customers during a three hour audit, despite billing the insurer over $5 million during an 18 month period.
- Yet another Miami pharmacy billed $106,000 in HIV medication in two days. After neighbors stated no pharmacy was present at their location, the private insurer suspended payments and later terminated the pharmacy from its network. The pharmacy continued to bill the insurer an additional $147,000.
Per my comments yesterday, I doubt anyone at a phantom pharmacy has ever authenticated a track-and-trace tag or checked a pedigree.
