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Report (OEI-07-08-00150)

05-04-2011

Medicare Atypical Antipsychotic Drug Claims for Elderly Nursing Home Residents

Complete Report

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Summary

For the period January 1 through June 30, 2007, we determined using medical

record review that 51 percent of Medicare claims for atypical antipsychotic

drugs were erroneous, amounting to $116 million.

A member of Congress requested that OIG evaluate the extent to which elderly

nursing home residents receive atypical antipsychotic drugs and the associated

cost to Medicare. Specifically, this member expressed concern with atypical

antipsychotic drugs prescribed to elderly nursing home residents for off-label

conditions (i.e., conditions other than schizophrenia and/or bipolar disorder)

and/or in the presence of the condition specified in the Food and Drug

Administration's (FDA) boxed warning (i.e., dementia). Medicare requires that

drugs be prescribed for " medically accepted indications " for reimbursement.

Further, CMS sets standards to ensure that nursing home residents' drug therapy

regimens are free from unnecessary drugs.

We also found that 14 percent of the 2.1 million elderly (i.e., age 65 and

older) nursing home residents had at least 1 claim for these drugs. We

determined using medical record review that 83 percent of Medicare claims for

atypical antipsychotic drugs for elderly nursing home residents were associated

with off-label conditions and that 88 percent were associated with the condition

specified in the FDA boxed warning. We further determined through medical record

review that 22 percent of the atypical antipsychotic drugs associated with the

claims were not administered in compliance with CMS standards regarding

unnecessary drugs in nursing homes, amounting to $63 million. Nursing homes'

failure to comply with these standards may affect their participation in

Medicare. However, nursing homes' noncompliance with these standards does not

cause Medicare payments for these drugs to be erroneous.

To ensure that Medicare correctly pays for atypical antipsychotic drugs and that

elderly nursing home residents are free from unnecessary drugs, we recommend

that CMS (1) facilitate access to information necessary to ensure accurate

coverage and reimbursement determinations, (2) assess whether survey and

certification processes offer adequate safeguards against unnecessary

antipsychotic drug use in nursing homes, (3) explore alternative methods beyond

survey and certification processes to promote compliance with Federal standards

regarding unnecessary drug use in nursing homes, and (4) take appropriate action

regarding the claims associated with erroneous payments identified in our

sample.

In its written comments on the report, CMS shared our concern and that of

Congress over whether atypical antipsychotics and other drugs are being

appropriately prescribed for elderly nursing home residents. CMS concurred with

the second, third, and fourth recommendations; however, CMS did not concur with

the first recommendation and expressed several general concerns with the report.

CMS did not concur with the first recommendation, stating that diagnosis

information is not a required data element of pharmacy billing transactions nor

is it generally included on prescriptions. OIG recognizes that the industry has

not developed a standardized way of collecting diagnosis information for

prescription drugs. However, without access to diagnosis information, CMS cannot

determine the indications for which drugs were used. For this reason, CMS is

unable, absent a medical review, to determine whether claims meet payment

requirements.

Although CMS concurred with the second recommendation, we further recommend that

CMS use its authority through the survey and certification processes to hold

nursing homes accountable when unnecessary drug use is detected.

Although CMS concurred with the third recommendation, it did not believe some of

the examples of alternative methods to promote compliance provided in the report

to be practicable. We suggest that CMS either use its existing authority or seek

new statutory authority to prevent payment and hold nursing homes responsible

for submitting claims for drugs that are not administered according to CMS's

standards regarding unnecessary drug use in nursing homes.

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