Thousands of Medicaid drugs payments unlawful

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http://watchdog.org/7495/thousands-of-medicaid-drugs-payments-unlawful/

Thousands of Medicaid drugs payments unlawful Posted

on December 3, 2010

By Miltimore — More than one-third of Medicaid drug

payments could be going to drugs not covered by Medicaid under

federal law, according to a government report

published this week.

The Office of Inspector General for Health and Human Services

found the government could verify only 62 percent of Medicaid

payments had passed Food and Drug Administration approval.

FDA approval is generally a prerequisite for a drug to be

covered under Medicaid.

The findings are part of a government inquest launched in 2008

after lawmakers expressed concerns that Medicaid drug payments

were failing to meet government standards.

Getting FDA approval

Drugs cannot be legally marketed in the U.S. until they are

approved by the FDA, which experts say can be an expensive and

lengthy process.

Information obtained from the application process is collected

and maintained in the National Drug Code Directory.

The directory contains, among other things, an approved

application number for each listed drug.

According to the IOG report, 38 percent of drugs paid for under

Medicaid in 2008 were either not listed in the directory or were

listed but not approved.

Total payment for these drugs was approximately $6.2 billion in

2008, though authors of the report note not all of these

payments lacked FDA approval.

Manual reviews show some of these payments did have FDA

approval but did not appear on the directory because much of the

information in the directory was incomplete or inaccurate.

“As a result, Medicaid could potentially pay for drugs that are

not approved,” the report found. “This report highlights the

fact that the NDC Directory cannot be used to verify the

approval and listing status of drugs paid for under Medicaid.”

FDA officials acknowledged that data quality “has suffered in

the past,” but noted the department has begun implementing

several initiatives to enhance data quality.

The government considers drugs not approved by the FDA

potentially hazardous.

Officials at Community Catalyst, a national consumer health

organization, said the distribution of non-approved drugs poses

public risks.

“Obviously we would be concerned if that was the case,” said

Marcia Ham, director of prescription access and quality at

Community Catalyst.

Ham said the actual extent of non-approved drugs is difficult

to know because of the inaccuracies in NDC Directory.

“The bottom line is the data should be accurate,” she said.

The report comes at a time when many states are cutting

Medicaid services and reimbursement rates because of budget

pressures.

Medicaid, the means-tested health care program jointly funded

by the federal and state governments, serves more than 50

million people and accounts for 20 percent to 25 percent of most

state budgets.

The program saw enrollment hit record highs in 2010 and is an

area of growing concern for states facing upcoming budget

shortfall estimated at $140 billion.

Officials with the National Governor’s Association and the

National Association of State Budget Officers identified

Medicaid as a top concern heading into budget season.

“The end of Recovery Act funding in 2012, along with the

growing pension liability and the rise of Medicaid enrollment

could further exacerbate the already tight fiscal conditions,”

said NGA Executive Director C. Scheppach.