Department of Health and Human Services 
OFFICE OF 
 
INSPECTOR GENERAL 
 
 
 
 
 
 
M
EDICARE 
 
 
I P
NAPPROPRIATELY  AID FOR 
 
  D O
RUGS  RDERED BY 
 
I  W
NDIVIDUALS  ITHOUT 
 
P A  
RESCRIBING  UTHORITY
 
Daniel R. Levinson  
Inspector General 
 
June 2013 
OEI-02-09-00608   
   
MEDICARE INAPPROPRIATELY PAID FOR DRUGS ORDERED BY 
INDIVIDUALS WITHOUT PRESCRIBING AUTHORITY 
OEI-02-09-00608 
 
WHY WE DID THIS STUDY 
 
Under Medicare Part D, the Centers for Medicare & Medicaid Services (CMS) contracts 
with private insurance companies, known as sponsors, to provide prescription drug 
coverage to beneficiaries who choose to enroll.  In recent years, prescription drug abuse 
has emerged as a serious and growing problem.  The Centers for Disease Control and 
Prevention has characterized prescription drug abuse as an epidemic.  With the rise in 
prescription drug abuse, concerns about Medicare fraud, particularly prescriber fraud, 
have increased.   
 
HOW WE DID THIS STUDY 
 
We based this study on an analysis of all Prescription Drug Event records from 2009.  
Sponsors submit these records to CMS for each drug dispensed to beneficiaries enrolled 
in their plans.  We matched each record to the National Plan and Provider Enumeration 
System to determine the prescriber type, such as physician or dentist.  We selected 14 
types that clearly did not have the authority to prescribe and identified the drugs they 
prescribed nationwide.  We also identified 7 other types for a more in-depth review in the 
10 States with the highest Part D payments.  
 
WHAT WE FOUND 
 
Nationwide, Part D inappropriately paid for drugs ordered by individuals who clearly did 
not have the authority to prescribe, such as massage therapists, athletic trainers, home 
contractors, interpreters, and transportation companies.  This raises concerns about the 
appropriateness of Part D payments and about patient safety.  In 10 States, Part D also 
inappropriately paid for drugs ordered by other individuals without the authority to 
prescribe, such as counselors, social workers, and chiropractors.  Tens of thousands of 
these drugs were controlled substances.  These drugs are of particular concern because 
they have potential for abuse.  
 
WHAT WE RECOMMEND 
 
Our findings show the need for increased oversight of prescribers.  We recommend that 
CMS:  (1) require sponsors to verify that prescribers have the authority to prescribe 
drugs, (2) increase the Medicare Drug Integrity Contractors monitoring of prescribers, 
(3) ensure that Medicare does not pay for prescriptions from individuals without 
prescribing authority, and (4) follow up on the individuals without prescribing authority 
who ordered prescriptions.  CMS concurred with all four recommendations. 
 
   
TABLE OF CONTENTS 
 
Objective ......................................................................................................1 
Background ..................................................................................................1 
Methodology ................................................................................................6 
Findings......................................................................................................10 
Nationwide, Part D inappropriately paid for drugs ordered by 
individuals who clearly did not have the authority to prescribe, 
such as massage therapists and athletic trainers. ...........................10 
 
In 10 States, Part D also inappropriately paid for drugs ordered 
by other individuals without the authority to prescribe, such as 
counselors and social workers. ......................................................12 
 
Tens of thousands of drugs ordered by individuals without  
prescribing authority were controlled substances ..........................14 
Conclusion and Recommendations ............................................................16 
Agency Comments and Office of Inspector General Response... ..18 
Appendix ....................................................................................................20 
A:  Agency Comments ...................................................................20 
Acknowledgments......................................................................................23 
   
   
OBJECTIVE  
To determine whether Medicare Part D paid for drugs ordered by 
individuals who did not have the authority to prescribe. 
BACKGROUND  
The Medicare Part D program provides an optional prescription drug 
benefit to Medicare beneficiaries.1  The Centers for Medicare & Medicaid 
Services (CMS) contracts with private insurance companies, known as 
sponsors, to provide drug coverage to beneficiaries who choose to enroll. 
In 2011, 36 million beneficiaries were enrolled in Part D.2  
Prescription drug abuse is a serious and growing problem.  The Centers 
for Disease Control and Prevention (CDC) has characterized prescription 
drug abuse as an epidemic.3  In 2010, approximately 7 million people in 
the United States were misusing prescription drugs.4  Moreover, overdoses 
of prescription painkillerscalled opioidsare among the leading causes 
of accidental death in the United States.5 
With the rise in prescription drug abuse, concerns about Medicare fraud, 
particularly prescriber fraud, have increased.  A number of recent fraud 
cases have focused on prescribers  In one case, a physician knowingly 
.
allowed nonmedical personnel to prescribe commonly abused painkillers, 
such as oxycodone, morphine, and hydrocodone, to Medicare patients.6  In 
a similar case, a physician assistant used prescriptions that were signed in 
advance by a physician to inappropriately prescribe drugs to Medicare 
 
1 The Medicare Prescription Drug, Improvement, and Modernization Act of 2003,  
P.L. 108-173. 
2 The Boards of Trustees, Federal Hospital Insurance and Federal Supplementary 
Medical Insurance Trust Funds, 2012 Annual Report of the Boards of Trustees of the 
Federal Hospital Insurance and Federal Supplementary Medicare Insurance Trust 
Funds, p. 164.  Accessed at http://www.cms.gov/Research-Statistics-Data-and-
Systems/Statistics-Trends-and-Reports/ReportsTrustFunds/Downloads/TR2012.pdf on  
July 6, 2012.   
3 CDC, Press Release, Prescription Painkiller Overdoses at Epidemic Levels,  
November 1, 2011.  Accessed at 
http://www.cdc.gov/media/releases/2011/p1101_flu_pain_killer_overdose.html on  
February 21, 2012.   
4 National Institute on Drug Abuse, Topics in Brief:  Prescription Drug Abuse,  
December 2011.  Accessed at http://www.drugabuse.gov/publications/topics-in-
brief/prescription-drug-abuse on September 18, 2012. 
5 CDC, Unintentional Drug Poisonings in the United States, July 2010.   
6 Federal Bureau of Investigation, Palmetto Physician Pleads Guilty To Illegal 
Prescription Drug and Medicare Fraud Conspiracies, March 18, 2010.  Accessed at 
http://www.fbi.gov/tampa/press-releases/2010/ta031810.htm on July 2, 2012. 
 Medicare Inappropriately Paid for Drugs Ordered by Individuals Without Prescribing Authority (OEI-02-09-00608)  1 
   
   
beneficiaries.7  In another case, a chiropractor was charged with illegally 
dispensing and distributing prescription drugs.8 
This report is part of a larger body of work examining Part D billing.  
Another report identified pharmacies with questionable billing in 2009.9  A 
third report identified inappropriate Part D payments for Schedule II 
refills.10  A fourth report determines the extent to which general-care 
physicians have questionable prescribing patterns.11  All four reports are 
part of the Health Care Fraud Prevention and Enforcement Action Team 
Initiative (HEAT), which focuses on detecting health care fraud through 
innovative data analysis and enhanced cooperation among the Department 
of Justice (DOJ), OIG, and CMS.12 
Prescription Drugs 
Medicare Part D covers prescription drugs that meet certain requirements 
and are used for medically accepted indications.13  CMS considers a drug 
to be prescription if the Food and Drug Administration has determined it 
must be labeled  only, which means it cannot be dispensed without a 
prescription from a practitioner who is licensed to prescribe such drugs.14  
The types of practitioners that are licensed to prescribe drugs are 
 
determined by State law.
The Drug Enforcement Agency (DEA) regulates certain drugs that have 
potential for abuse and dependence, called controlled substances.15  These 
 
7 Attorney General of Texas, A Dallas Man Pleads Guilty to Health Care Fraud in State 
and Federal Probe, July 18, 2012.  Accessed at 
https://www.oag.state.tx.us/oagNews/release.php?id=4091 on July 23, 2012. 
8 Department of Justice (DOJ), Former Daytona Beach Chiropractor Charged With 
Illegally Dispensing Prescription Drugs and Health Care Fraud.  Accessed at 
http://www.justice.gov/usao/flm/press/2012/may/20120518_Wagner.html on  
May 22, 2012. 
9 Office of Inspector General (OIG), Retail Pharmacies With Questionable Part D 
Billing, OEI-02-09-00600, May 2012. 
10 OIG, Inappropriate Part D Payments for Schedule II Drugs Billed as Refills,  
OEI-02-09-00605, September 2012. 
11 OIG, Prescribers with Questionable Patterns in Medicare Part D, OEI-02-09-00603, 
June 2013. 
12 U.S. Department of Health and Human Services and DOJ, HEAT Task Force Success. 
Accessed at http://www.stopmedicarefraud.gov/heattaskforce/index.html on January 11, 
2011.  
13 For more information, see 42 U.S.C.  1860D-2(e) and CMS, Medicare Prescription 
Drug Benefit Manual, Chapter 6, Part D Drugs and Drug Formulary Requirements, 
February 2010. 
14 CMS, Medicare Prescription Drug Benefit Manual, Chapter 6, Part D Drugs and 
Drug Formulary Requirements,  10, February 2010.  Also see 21 U.S.C.  353(b)(1). 
15 21 U.S.C.  801 et seq.  Also see DEA, Office of Diversion Control, Controlled 
Substance Schedule.  Accessed at 
http://www.deadiversion.usdoj.gov/schedules/index.html#define on November 13, 2012. 
 Medicare Inappropriately Paid for Drugs Ordered by Individuals Without Prescribing Authority (OEI-02-09-00608)  2 
   
   
drugs are divided into five schedules.  Schedule II drugs have the highest 
potential for abuse of any prescription drugs legally available in the 
United States.16  They include stimulants and narcotics commonly used to 
relieve pain, such as oxycodone and morphine.  Drugs on Schedules III 
through V also have a potential for abuse and psychological or physical 
dependence.  The DEA requires all practitioners who handle controlled 
substances to register with the agency.17  It assigns each registrant a DEA 
number and maintains a database with information about each registrant, 
such as name, address, degree, and the drug schedules each is permitted to 
handle. 
Part D Oversight 
CMS relies on sponsors to help safeguard Part D from fraud and abuse. 
CMS requires sponsors to have compliance plans that contain measures to 
detect, prevent, and correct fraud, waste, and abuse.18  CMS recommends 
that sponsors use data analysis as part of these plans.19  Specifically, it 
recommends that sponsors develop indicators and establish baseline data 
so that they can recognize abnormalities and changes in prescribing 
patterns. 
In addition, CMS contracts with a Medicare Drug Integrity Contractor 
(MEDIC) to detect and prevent fraud, waste, and abuse.  Its 
responsibilities include identifying and investigating potential fraud and 
abuse, referring cases, and fulfilling requests for information from law 
enforcement.20  The MEDIC is required to identify potential fraud and 
abuse through external sources, such as tips, as well as proactive methods, 
such as data analysis.21 
CMS is responsible for the oversight of the sponsors and the MEDIC.  
CMS conducts a number of audits for sponsors, including onsite audits of 
their compliance plans.22  During these audits, CMS assesses the 
 
16 Schedule I drugs currently have no accepted medical use in the United States.  They 
include drugs such as heroin. 
17 DEA registration grants prescribers Federal authority to handle certain schedules of 
controlled substances.  See 21 CFR  1301.11. 
18 42 CFR  423.504(b)(4)(vi). 
19 CMS, Prescription Drug Benefit Manual Chapter 9, Compliance Program Guidelines 
 50.6.9, July 2012.  Accessed at http://www.cms.gov/Medicare/Prescription-Drug-
Coverage/PrescriptionDrugCovContra/Downloads/Chapter9.pdf on  
September 12, 2012. 
20 CMS, MEDIC Statement of Work, July 2009. 
21 For more information on the responsibilities of the MEDIC, see OIG, MEDIC Benefit 
Integrity Activities in Medicare Parts C and D, OEI-03-11-00310, January 2013.  
22 For more information on audits by CMS, see OIG, Audits of Medicare Prescription 
Drug Plan Sponsors, OEI-03-09-00330, December 2011. 
 Medicare Inappropriately Paid for Drugs Ordered by Individuals Without Prescribing Authority (OEI-02-09-00608)  3 
   
   
effectiveness of sponsors fraud and abuse programs.  CMS evaluates the 
MEDICs performance annually. 
Prescription Drug Event Data 
Sponsors submit a Prescription Drug Event (PDE) record to CMS for each 
prescription filled for their enrollees.  CMS uses the PDE records to 
administer the program and to calculate its payments to sponsors at the 
end of each year in a process known as reconciliation.  Each PDE record 
contains information about the drug and beneficiary.  It also includes 
identification numbers for the prescriber and pharmacy, which are 
typically National Provider Identifiers (NPI).23 
Sponsors are required to certify the accuracy, completeness, and 
truthfulness of their PDE data.24  Beginning in January 2012, they are also 
required to ensure that the prescriber identifiers on the PDE records are 
active and valid, meaning that they are currently assigned to a health care 
provider.25  NPIs are assigned to many types of health care providers.  
Having an NPI does not mean that an individual has the authority to 
prescribe drugs.  CMS does not specifically require sponsors to verify that 
drugs are ordered by individuals who have the authority to prescribe. 
Prescriber Information 
CMS maintains a registry of all the NPIs it assigns in its National Plan and 
Provider Enumeration System (NPPES) database.26  To receive an NPI, 
providers report certain identifying information such as their names, 
addresses, and professional credentials, such as M.D. or R.N.  Providers 
also indicate whether they are individuals or organizations, such as a 
hospital, clinic, or group practice. 
Providers must also select a taxonomy code that provides information 
about their primary specialty.27  The taxonomy code indicates a providers 
 
23 PDE records allow four types of prescriber identification numbers:  NPIs, DEA 
numbers, State license numbers, and Unique [Physician] Identification Numbers (UPIN).  
See CMS, Prescriber Identifier on Part D NCPDP Pharmacy Claims Transactions,  
May 1, 2009.  Accessed at https://www.cms.gov/Medicare/Prescription-Drug-
Coverage/PrescriptionDrugCovContra/Downloads/MemoNPIPrescriberID_050108v2.pdf 
on December 5, 2012. 
24 42 CFR  423.505(k). 
25 Sponsors must also confirm that any controlled substance is within the prescribers 
scope of practice to prescribe.  CMS, Announcement of Calendar Year (CY) 2012 
Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment 
Policies and Final Call Letter, April 4, 2011. 
26 The Health Insurance Portability and Accountability Act of 1996 (HIPAA) required the 
development of a standard unique health care system identifier for each provider.  
Providers that are subject to HIPAA must have an NPI.  This includes all providers that 
bill Medicare. 
27 CMS, National Plan and Provider Enumeration System (NPPES) Data Elements Data 
Dissemination:  Information for Providers, June 20, 2007. 
 Medicare Inappropriately Paid for Drugs Ordered by Individuals Without Prescribing Authority (OEI-02-09-00608)  4 
   
   
type and specialty, if any.  For example, it may indicate that a prescriber is 
a family-medicine physician specializing in geriatric medicine. 
Providers must ensure that information in the NPPES database, including 
the taxonomy, is updated and accurate.  When applying for an NPI, 
providers certify that the information is correct and that they agree to 
provide notification within 30 days of any changes.28  
Related Work 
A recent OIG report found that 2,637 retail pharmacies had questionable 
billing in 2009.29  These pharmacies had extremely high billing for at least 
one of the eight measures we developed.  For example, many pharmacies 
billed extremely high dollar amounts or numbers of prescriptions per 
beneficiary or per prescriber, which could mean that a pharmacy is billing 
for drugs that are not medically necessary or were never provided.  Among 
other things, the report recommended that CMS strengthen its monitoring 
of pharmacies, provide additional guidance to sponsors on monitoring 
pharmacy billing, and further strengthen its compliance plan audits.  CMS 
concurred with these recommendations. 
Another recent OIG report found that Medicare Part D inappropriately 
paid $25 million for Schedule II drugs billed as refills in 2009.30  Sponsors 
should not have paid for any of these drugs because Federal law prohibits 
the refilling of Schedule II controlled substances without a valid 
prescription.31  Also, three-quarters of Part D sponsors paid for Schedule II 
drugs billed as refills, indicating that many sponsors do not have adequate 
controls to prevent these refills.  Among other things, the report 
recommended that CMS issue guidance to sponsors to prevent billing of 
Schedule II refills and to exclude Schedule II refills when calculating 
payments to sponsors. 
Another OIG report found that Medicare Part D paid $1.2 billion in 2007 
for drugs with invalid prescriber identifiers, which had either never been 
assigned or had been retired.32  The report recommended that CMS 
conduct periodic reviews to ensure the validity of prescriber identifiers 
 
28 CMS, National Provider Identifier (NPI) Application/Update Form, November 2008.  
Accessed at https://www.cms.gov/Medicare/CMS-Forms/CMS-
Forms/Downloads/CMS10114.pdf on June 5, 2012. 
29 OIG, Retail Pharmacies With Questionable Part D Billing, OEI-02-09-00600,  
May 2012. 
30 OIG, Inappropriate Part D Payments for Schedule II Drugs Billed as Refills,  
OEI-02-09-00605, September 2012. 
31 Federal law permits partial refills under certain circumstances.  It is possible some of 
these drugs may have been inaccurately billed as refills when they were partial fills.   
32 OIG, Invalid Prescriber Identifiers on Medicare Part D Claims, OEI-03-09-00140,  
June 2010. 
 Medicare Inappropriately Paid for Drugs Ordered by Individuals Without Prescribing Authority (OEI-02-09-00608)  5 
   
   
and require Part D plans to institute procedures to identify and review 
records containing invalid prescriber identifiers.  
Finally, another OIG report found barriers to the MEDICs benefit 
integrity efforts.33  These barriers included problems in sharing of 
information and recovering inappropriate payments.  The report also found 
that only a small percentage of the MEDICs investigations and case 
referrals resulted from proactive data analysis.  In the 1-year study period, 
the MEDIC initiated just 209 Part D investigations from proactive 
methods, such as data analysis.  
METHODOLOGY 
We based this study on an analysis of all PDE records from 2009, which 
we collected to undertake this study and other studies.34  We matched these 
records to the NPPES database to obtain descriptive information about the 
prescribers. 
PDE Data 
We identified all PDE records for covered Part D drugs with dates of 
service from January 1 to December 31, 2009.35  We identified  
1.07 billion PDE records.36   
For each PDE record, we identified the identification number of the 
prescriber, which was generally an NPI.  For records that used other types 
of prescriber identification numbers, we used a crosswalk developed by 
OIG analysts to identify the prescribers NPI.37 
Using the NPI, we determined which PDE records were prescribed by 
individuals, as opposed to organizations.  We focused our review on 
individual prescribers because organizations may be associated with 
multiple prescribers.  We identified 1,102,275 individual prescribers who 
were associated with 1.03 billion PDE records.38  These records represent 
 
33 OIG, MEDIC Benefit Integrity Activities in Medicare Parts C and D,  
OEI-03-11-00310, January 2013. 
34 These studies include: Retail Pharmacies With Questionable Part D Billing  
(OEI-02-09-00600); Inappropriate Part D Payments for Schedule II Drugs Billed as 
Refills (OEI-02-09-00605); and Prescribers with Questionable Patterns in Medicare  
Part D (OEI-02-09-00603). 
35 This excludes any over-the-counter medications that sponsors provide as part of a 
utilization management program.  These medications are not considered covered Part D 
drugs. 
36 The exact number of PDE records was 1,070,149,994. 
37 To develop this crosswalk, we used information from the Services Tracking, Analysis, 
and Reporting System, the DEA database, and the NPPES.  We did not include  
214,042 PDE records in our review because they did not have prescriber identification 
numbers. 
38 The exact number of PDE records was 1,026,983,870. 
 Medicare Inappropriately Paid for Drugs Ordered by Individuals Without Prescribing Authority (OEI-02-09-00608)  6 
   
   
96 percent of all PDE records and totaled $71 billion in Medicare 
payments.39  All of these records contained NPIs that were assigned to 
providers.  Having an NPI, however, does not mean that a provider has the 
authority to prescribe. 
Analysis 
To determine the prescriber type, such as a physician or dentist, we 
matched the NPI for each individual prescriber to the NPPES.  We used 
the taxonomy code reported by each prescriber in the NPPES and grouped 
these codes into categories of prescriber types.40 
We reviewed the prescriber types of all Part D prescribers nationwide.  We 
selected 14 prescriber types, such as contractors or veterinarians, that 
clearly did not have prescribing authority.  We identified all of the PDE 
records for these prescriber types in all 50 States, the District of Columbia, 
and the Territories.41 
We then conducted a more in-depth analysis of 10 States.  To do this, we 
identified the 10 States with the highest Part D payments in 2009: 
California, Florida, New York, Texas, Pennsylvania, Ohio, Illinois, North 
Carolina, Michigan, and New Jersey. 42  These States accounted for  
53 percent of all Medicare Part D payments in 2009.43  We selected seven 
prescriber types that we suspected did not have the authority to prescribe 
in these States.  Attorneys from the Office of Counsel to the Inspector 
General reviewed State laws and confirmed that none of these 7 prescriber 
types had the authority to prescribe in these States.  We then identified all 
of the PDE records for the 7 prescriber types in the 10 States.  
We took several steps to verify that the individuals identified nationwide 
and in the 10 States did not report any other information in the NPPES that 
suggested they had the authority to prescribe.  First, we reviewed all the 
information that these individuals reported in the additional taxonomy 
fields in the NPPES.44  Second, we reviewed the information they reported 
in the credential field in the NPPES.  We also determined whether any of 
 
39 The exact amount was $70,657,705,438.  We used three fields on the PDE records to 
calculate Part D payments:  the ingredient cost, dispensing fee, and sales tax.  
40 We grouped codes based on the prescribers scope of practice or services.  For 
example, we grouped all of the counselors together and all of the non-advanced practice 
nurses together, including Registered Nurses and Licensed Practical Nurses. 
41 For the purposes of this review, we refer to the District of Columbia and the Territories 
as States. 
42 We calculated Part D payments for each State based on the prescribers ZIP Codes.  
43 Medicare Part D payments in these 10 States amounted to $37,715,549,212 in 2009. 
44 Providers may report up to 14 other taxonomies, in addition to their primary taxonomy.  
We reviewed all of the taxonomy codes these prescribers reported. 
 Medicare Inappropriately Paid for Drugs Ordered by Individuals Without Prescribing Authority (OEI-02-09-00608)  7 
   
   
these individuals had a DEA number.45   We assumed that individuals who 
reported any information suggesting that they were physicians, advance 
practice nurses, physician assistants, dentists, podiatrists, or optometrists 
or had a DEA number had the authority to prescribe and therefore 
excluded them from our analysis.  For example, if a prescriber reported 
that he was an interpreter, but included M.D. in the credential field, we 
assumed that he was a physician and excluded him from our analysis. 
We then analyzed the PDE data for the 14 prescriber types we identified 
nationwide.46   For these prescriber types, we calculated the total number of 
prescriptions and the amount Medicare paid for these prescriptions in all 
States.47  For the purposes of this study, we use the term prescription to 
mean one PDE record.   
We also analyzed the PDE data for the 7 prescriber types in the 10 States 
and calculated the total number of prescriptions these prescribers ordered  
and the amount Medicare paid for these prescriptions.  We did this 
analysis by prescriber type and by State. 
Finally, we calculated the total number of prescriptions for controlled 
substances ordered by the 14 prescriber types nationwide and the  
7 prescriber types in the 10 States.  To do this, we matched the National 
Drug Code on the PDE record to data from First DataBank.  First 
DataBank indicates whether a drug is a controlled substance and, if so, 
which schedule the drug is on. We used this information to calculate the 
total number of prescriptions for controlled substancesSchedules II 
through IVordered by these prescriber types.48  
Limitations 
This report does not review all prescriber types without the authority to 
prescribe. It looks at selected types that clearly do not have authority 
 
45  We  used a crosswalk developed by OIG analysts that linked the NPIs to DEA numbers.  
This is a conservative approach.  Not every prescriber with a DEA number  has the 
authority to  prescribe controlled substances.  In some cases, mid-level practitioners have  
the right to  only administer or dispense the drugs.   DEA,  Office Diversion  Control,   
Mid-Level Practitioners Authorization by State, accessed at  
http://www.deadiversion.usdoj.gov/drugreg/practioners/index.html  on August 8,  2012. 
46 We  excluded PDE records for specific insulin brands that did  not require a 
prescription.   We identified these brands  of  insulin using the Food and  Drug  
Administration drug labels.  We also excluded medical supplies associated with the  
delivery of insulin, such as syringes, needles, and alcohol swabs,  which are covered by 
Part D but do not require a prescription.  
47 To calculate the total amount Medicare paid, we summed three fields on the PDE 
records that represent the total gross drug costs:  ingredient cost, dispensing fee, and sales  
tax.    
48  We  were unable to match 105 PDE records to First  Databank.  As a result, we could  
not  determine whether they  were controlled substances.  
 Medicare Inappropriately Paid for Drugs Ordered by Individuals Without Prescribing Authority (OEI-02-09-00608)   8 
   
   
nationwide and selected types that do not have the authority to prescribe in 
the 10 States.   
In addition, this review is based on an analysis of PDE data; we did not 
review documentation from the pharmacies or prescribers to verify the 
data.  We also did not independently verify the accuracy of the data from 
the NPPES. 
Standards 
This study was conducted in accordance with the Quality Standards for 
Inspection and Evaluation issued by the Council of the Inspectors General 
on Integrity and Efficiency. 
   
 Medicare Inappropriately Paid for Drugs Ordered by Individuals Without Prescribing Authority (OEI-02-09-00608)  9 
   
   
FINDINGS 
Nationwide, Part D inappropriately paid for drugs 
ordered by individuals who clearly did not have the 
authority to prescribe, such as massage therapists 
and athletic trainers 
Medicare should never pay for drugs ordered by individuals who do not 
have the authority to prescribe.  To be covered under Medicare Part D, 
drugs must be prescribed in accordance with State law, which specifies the 
types of health care providers that have the authority to prescribe drugs in 
the State.  Although these health care providers can vary by State, some 
types clearly do not have the authority to prescribe in any State.  If drugs 
are being ordered for Medicare beneficiaries by individuals who do not 
have the authority prescribe, it raises concerns about the appropriateness 
of Part D payments and about patient safety. 
A review of Part D payments nationwide showed that Medicare 
inappropriately paid for 72,552 prescriptions ordered by 14 prescriber 
types that clearly do not have the authority to prescribe in any State.  We 
selected these 14 prescriber types for review; they do not represent all 
types without the authority to prescribe.  The 14 types included massage 
therapists, athletic trainers, and dental hygienists.  None have the training 
necessary to prescribe drugs.  In total, Medicare paid $5.4 million for 
prescriptions ordered by the 14 prescriber types we reviewed.49  (See  
Table 1.) 
   
 
49 This total includes the amounts paid by Part D sponsors, by the Government, and by or 
on behalf of beneficiaries. 
 Medicare Inappropriately Paid for Drugs Ordered by Individuals Without Prescribing Authority (OEI-02-09-00608)  10 
   
   
Table 1:  Selected Prescriber Types Without the Authority To Prescribe, 
Nationwide, 2009 
Number of  Total 
Number of 
Prescriber Type  Individuals  Medicare 
Prescriptions 
Who Prescribed  Payments 
Dietitian and Nutritionist  20,044  713  $1,684,988 
Audiologist or Other Hearing/Speech-Related 
16,229  706  $1,085,699 
Services 
Massage Therapist  12,082  240  $798,991 
Athletic Trainer  8,795  398  $694,288 
Optician  3,860  157  $261,285 
Dental Hygienist, Dental Assistant, Denturist  3,085  223  $144,177 
Contractor  2,827  117  $178,443 
Home Health Aide or Other Personal Care 
1,781  117  $287,527 
Provider 
Interpreter  1,529  7  $68,225 
Transportation or Lodging Company  890  26  $49,689 
Speech-Language Assistant  549  23  $32,503 
Music or Art Therapist  493  21  $61,678 
Nursing Technician  267  12  $21,058 
Veterinarian  121  20  $6,080 
     Total   72,552  2,780  $5,374,632* 
*Total does not equal $5,374,632 because of rounding.  It includes the amounts paid by Part D sponsors, by the 
Government, and by or on behalf of beneficiaries.  
Note:  The prescriber types in the table are not a comprehensive list of all types that do not have the authority to 
prescribe.   
Note:  For the purposes of this report, we considered a prescription to be one PDE record. 
Source:  OIG analysis of Part D data, 2012. 
 
Notably, massage therapists ordered 12,082 prescriptions in 2009.  
Athletic trainers ordered another 8,795.  Contractors ordered 
2,827 prescriptions; these individuals complete home repairs or 
modifications to accommodate a health condition, such as wheelchair 
ramps.  Others who ordered prescriptions paid by Part D included personal 
care providers (e.g., home health aides, chore providers, and companions), 
interpreters, transportation companies (e.g., taxis, private vehicles, and 
drivers), lodging companies, and veterinarians. 
   
 
 
 Medicare Inappropriately Paid for Drugs Ordered by Individuals Without Prescribing Authority (OEI-02-09-00608)  11 
   
   
 
   
   
Examples of Individuals Without Prescribing Authority  

  Who Ordered Extremely  High Amounts of Part D Drugs 
 
 
   	  One Florida massage therapist ordered 3,756 prescriptions, 
amounting to $183,132. 
 
 	  A Florida dietician ordered 2,645 prescriptions for a total of  
 
165 beneficiaries. 
 
 	  An interpreter ordered 1,210 prescriptions filled at 55 pharmacies. 
 
 
 
 
 
In 10 States, Part D also inappropriately paid for 
drugs ordered by other individuals without the 
authority to prescribe, such as counselors and social
workers  
An in-depth analysis of 10 States revealed that Part D inappropriately paid 
for 344,714 prescriptions ordered by other selected types that did not have 
the authority to prescribe.  In total, Medicare paid $26.2 million for drugs 
ordered by counselors, chiropractors, social workers, physical therapists, 
registered nurses, occupational therapists, and speech-language 
pathologists. 50  Our review of State laws found that these prescriber types 
did not have the authority to prescribe drugs in any of the 10 States. 
Although the seven selected prescriber types were the focus of the in-
depth State analysis, they do not represent all types without authority to 
prescribe in these States.   
As shown in Table 2, counselors ordered 87,400 prescriptions, the most of 
the prescriber types reviewed in the 10 States.  Counselors include such 
professions as marriage and family therapists.  Chiropractors were next, 
with 70,681 prescriptions, followed by social workers, with 
69,075 prescriptions.   
 
 
 
50 This total includes the amounts paid  by Part D sponsors, by the Government, and by  or  
on behalf of  beneficiaries.  
 Medicare Inappropriately Paid for Drugs Ordered by Individuals Without Prescribing Authority (OEI-02-09-00608)   12 
   
   
Table 2:  Selected Prescriber Types Without the Authority To Prescribe in  
10 States, 2009 
Total 
Number of  Number of 
Prescriber Type  Medicare 
Prescriptions  Individuals  
Payments 
Counselor  87,400  2,838  $7,374,910 
Chiropractor  70,681  2,809  $4,929,992 
Social Worker  69,075  2,542  $5,391,641 
Physical Therapist  52,892  2,101  $3,690,425 
Registered Nurse  27,552  1,076  $2,104,351 
Occupational Therapist  19,900  674  $1,481,768 
Speech-Language Pathologist  17,214  664  $1,199,122 
     Total  344,714  12,704  $26,172,208* 
*Total does not equal $26,172,208 because of rounding.  It includes the amounts paid by Part D sponsors, by the 
Government, and by or on behalf of beneficiaries. 
Note:  For the purposes of this report, we considered a prescription to be one PDE record. 
Source:  OIG analysis of Part D data, 2012. 
 
Part D paid for drugs ordered by 12,704 individuals without prescribing 
authority in the 10 States.  On average, each of these individuals ordered 
27 prescriptions, but a few ordered extremely high numbers.  In fact, 32 of 
these individuals without prescribing authority ordered more than 
1,000 prescriptions each. 
   
 
 
Examples of Individuals Without Prescribing Authority 
Who Ordered Extremely High Amounts of Part D Drugs 
 
  One Florida counselor ordered 2,912 prescriptions for  
217 beneficiaries, which were filled at 103 pharmacies. 
  An Ohio social worker ordered 1,639 prescriptions, which were 
all filled at one retail pharmacy. 
  A registered nurse from California ordered 1,111 prescriptions, 
which were filled at a single retail pharmacy in New York. 
  An Illinois social worker ordered 1,345 prescriptions, which 
were filled at 149 pharmacies for 312 beneficiaries.  Almost all 
of these pharmacies were part of the same national chain. 
 
 
 Medicare Inappropriately Paid for Drugs Ordered by Individuals Without Prescribing Authority (OEI-02-09-00608)  13 
   
   
 
As shown in Table 3, among the 10 States, California and Florida had the 
highest number of prescriptions ordered by such individuals.  California 
accounted for 25 percent of all of these prescriptions, while Florida 
accounted for 20 percent.   
 
Table 3:  Number of Prescriptions Ordered by Individuals Without Authority 
in Each of 10 States, 2009 
Percentage 
Number of  Total Medicare 
State  of 
Prescriptions  Payments 
Prescriptions 
California  86,494  25%  $7,001,918 
Florida  68,027  20%  $4,570,107 
New York  49,245  14%  $3,887,613 
Illinois  34,199  10%  $2,564,564 
Texas  30,362  9%  $2,246,366 
Pennsylvania  17,825  5%  $1,317,686 
Ohio  17,672  5%  $1,206,428 
New Jersey  14,581  4%  $1,208,509 
North Carolina  14,034  4%  $1,188,530 
Michigan  12,275  4%  $980,486 
     Total  344,714  100%  $26,172,208* 
*Total does not equal $26,172,208 because of rounding.  It includes the amounts paid by Part D sponsors, by the 
Government, and by or on behalf of beneficiaries. 
Note:  These calculations are based on the seven selected prescriber types.  They do not include all types that do 
not have the authority to prescribe. 
Note:  For the purposes of this report, we considered a prescription to be one PDE record. 
Source:  OIG analysis of Part D data, 2012. 
 
Tens of thousands of drugs ordered by individuals 
without prescribing authority were controlled 
substances 
Most of the prescriptions ordered by individuals who did not have the 
authority to prescribe were for commonly used drugs; however, thousands 
were for controlled substances.51  These drugs are of particular concern 
because they have potential for abuse.  In total, 29,212 prescriptions for 
controlled substances were ordered by 4,863 individuals without 
 
51 Overall, the drugs that the prescribers without authority most frequently ordered were 
simvastatin, lisinopril, hydrocodone-acetaminophen, amlodipine besylate, and levothyroxine 
sodium.  A recent OIG report found that these drugs were also the five most common drugs 
dispensed by retail pharmacies in 2009.  See OIG, Retail Pharmacies With Questionable 
Part D Billing, OEI-02-09-00600, May 2012. 
 Medicare Inappropriately Paid for Drugs Ordered by Individuals Without Prescribing Authority (OEI-02-09-00608)  14 
   
   
prescribing authority.  These included individuals we identified nationwide 
and those from the 10 States for which we conducted an in-depth review. 
Of these prescriptions, 7,679 were Schedule II drugs.  Schedule II drugs 
have the highest potential for abuse of any prescription drugs legally 
available in the United States.  They include commonly abused painkillers, 
like oxycodone, that can be diverted and resold for profit.  In one example, 
a counselor ordered 174 Schedule II drugs for 13 beneficiaries.  In a 
second example, a contractor ordered 79 Schedule II drugs, which were all 
commonly abused painkillers. 
 
   
 Medicare Inappropriately Paid for Drugs Ordered by Individuals Without Prescribing Authority (OEI-02-09-00608)  15 
   
   
CONCLUSION AND RECOMMENDATIONS 
Nationwide, Medicare inappropriately paid for prescriptions ordered by 
individuals who clearly did not have the authority to prescribe, such as 
massage therapists and athletic trainers.  Additionally, in 10 States we 
reviewed in more depth, Medicare paid for prescriptions ordered by others 
who did not have the authority to prescribe.  These included counselors, 
social workers, chiropractors, registered nurses, physical therapists, 
occupational therapists, and speech-language pathologists.  Even more 
concerning, tens of thousands of these prescriptions were for controlled 
substances.   
Our findings raise concerns about the appropriateness of Medicare 
payments and about patient safety.  They also show the need for increased 
oversight of prescribers to ensure that Medicare does not pay for drugs 
ordered by individuals who do not have the authority to prescribe.  Drugs 
prescribed by such individuals may not be appropriate and may endanger 
patients.  Such practices may also contribute to the prescription drug abuse 
problem in our Nation.   
We recommend that CMS: 
Require Sponsors To Verify That Prescribers Have the 
Authority To Prescribe Drugs  
CMS requires sponsors to verify that the prescriber identifiers on the PDE 
records are currently assigned to a health care provider.  However, having 
an NPI does not mean that an individual has the authority to prescribe 
drugs.  CMS should also require sponsors to use the information available 
in the NPPES database to check that the prescriber on the PDE record is a 
type of prescriber that has the authority to prescribe under State law. 
Increase the MEDICs Monitoring of Prescribers  
CMS should instruct the MEDIC to conduct additional proactive data 
analysis to identify individuals who do not have authority to prescribe 
drugs and further investigate and refer these individuals, as appropriate. 
Ensure That Medicare Does Not Pay for Prescriptions From 
Individuals Without Prescribing Authority 
CMS should issue guidance that requires sponsors to review PDE records 
to verify that the prescriber is associated with a type of prescriber that has 
the authority to prescribe and to submit adjustments and deletions when 
appropriate.  This will help to ensure that payments are accurate.  CMS 
should also monitor sponsors performance to make sure they are 
appropriately adjusting the PDE records prior to the reconciliation process 
in which CMS finalizes payments to sponsors.  
 Medicare Inappropriately Paid for Drugs Ordered by Individuals Without Prescribing Authority (OEI-02-09-00608)  16 
   
   
Follow Up on Individuals Without Prescribing Authority Who 
Ordered Prescriptions  
In a separate memorandum, we will refer to CMS for appropriate action 
the individuals without prescribing authority who ordered Part D 
prescriptions, particularly those who ordered high numbers of controlled 
substances. 
 
   
 Medicare Inappropriately Paid for Drugs Ordered by Individuals Without Prescribing Authority (OEI-02-09-00608)  17 
   
   
AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL 
RESPONSE 
In its comments on the draft report, CMS concurred with all four of our 
recommendations.  It concurred with our first recommendation, stating 
that it will issue guidance requesting sponsors to include a retrospective 
review in their required programs to combat fraud, waste, and abuse where 
data anomalies, such as those identified by OIG in this report, suggest 
possible inappropriate prescribing and to report any potential fraud to the 
MEDIC for further investigation.  Further, CMS stated that it will 
examine ways to improve the reliability of data in the National Plan and 
Provider Enumeration System (NPPES) database.  CMS stated that it is 
aware that there are limitations to the NPPES database and believes that 
instances identified in this report are likely due to administrative data 
input and maintenance issues.  For example, prescribers may have a record 
that indicates the prescriber is a student, when other data indicates the 
individual has become a full licensed practitioner.  We agree with CMS 
that the reliability of the NPPES should be improved and we support its 
efforts to do so; however, we do not agree with CMSs assertion that the 
instances in this report are due to limitations of the NPPES.  As explained 
in the report, we took multiple steps to ensure that none of the individuals 
included in this report provided any information indicating they have 
prescribing authority.  For example, we looked for credentials, such as 
M.D., and a DEA number.  If they had either, we assumed they had the 
authority to prescribe.  We also excluded all students from our review 
because some medical students, such as those on rotation, have the 
authority to prescribe under certain circumstances.   
CMS concurred with our second recommendation and stated that the 
MEDIC will continue to monitor prescribers and identify other proactive 
analyses targeted at prescribers.  It further noted that the MEDIC 
currently conducts proactive analysis to identify prescribers who do not 
have the authority to prescribe drugs, validates these finding through 
further investigations, and refers to law enforcement and State licensing 
boards, as appropriate.  Additionally, CMS noted that it has increased its 
monitoring of prescribers through the Part D Recovery Audit Contractor, 
with which it has contracted to identify and recover Part D improper 
payments. 
CMS concurred with our third recommendation, stating that current PDE 
guidance provides Part D sponsors with a process to delete PDEs that are 
fraudulent.  PDEs from prescribers confirmed by the MEDIC as not 
having prescribing authority would be communicated back to sponsors 
who would then delete the PDEs and implement point-of-sale edits to 
 Medicare Inappropriately Paid for Drugs Ordered by Individuals Without Prescribing Authority (OEI-02-09-00608)  18 
   
   
reject claims from these fraudulent prescribers in the future.   Finally, 
CMS concurred with our fourth recommendation to follow up on 
individuals without prescribing authority who ordered prescriptions. 
We support CMSs efforts to address these issues.  For the full text of 
CMSs comments, see Appendix A. 
 
   
 Medicare Inappropriately Paid for Drugs Ordered by Individuals Without Prescribing Authority (OEI-02-09-00608)  19 
  APPENDIX A 
Agency Comments 
/'!.fA'IICt.f., 
~
( ... DEPARTMENT OF HEALTH & HlJMAN SERVICES  Centers for Medicare 8. Medicaid Services 
<::-z~ 
Administrator 
Washington, DC 20201 
DATE:  MAY - 9 2013 
TO: 	 Daniel R. Levinson 
Inspector General 
FROM: 	 Ma(i~UV61l.n CP 
Acting Adm inist!Utor 
SUBJECT: 	 Office oflnspector General (OIG) Draft Report: "Medicare Inappropriately Paid 
for Drugs Ordered by Individuals Without Prescribing Authority'' 
(OEI-02-09-00608) 
The Centers f()r Medicare & Medicaid Services (CMS) appreciates the opportunity to review and 
comment on the above-referenced OIG draft report. The purpose of this report is to determine 
whether Medicare Part D paid for drugs ordered by individuals who did not have the authority to 
prescribe. 
The CMS is committed to preventing prescriber fraud, particularly when fraud is related to the 
serious and growing problem of prescription drug abuse . To help protect the Medicare Part D 
program , CMS requires plan sponsors to have compliance programs in place to help detect, 
prevent, and correct fraud, waste, and abuse. CMS also contracts with a Medicare Drug Integrity 
Contractor (MEDIC) that is tasked with identifying and investigating potential fraud and abuse, 
referring such cases to law enforcement, and fulfilling requests for information from law 
enforcement. 
We appreciate OIG's efforts in working with CMS to ensure that Medicare, particularly 
Medicare Part D. does not inappropriately pay for drugs ordered by individuals who lack the 
authority to prescribe such drugs . Our response to each ofthe OIG recommendations follows. 
OIG Recommendation 
The OIG recommends that CMS should require sponsors to verify that prescribers have the 
authority to prescribe drugs. 
CMS Response 
The CMS concurs with this recommendation. CMS currently requires Part D sponsors to verify 
that prescribers of controlled substances paid for under Part D have an active and valid 
individual National Provider Number (NPI) number to crosswalk to an individual Drug 
Medicare Inappropriately Paid for Drugs Ordered by Individuals Without Prescribing Authority (OEI-02-0900608)  20   
   
 
   
 Medicare Inappropriately Paid for Drugs Ordered by Individuals Without Prescribing Authority (OEI-02-09-00608)  21 
   
   
   
 Medicare Inappropriately Paid for Drugs Ordered by Individuals Without Prescribing Authority (OEI-02-09-00608)  22 
   
   
ACKNOWLEDGEMENTS 
This report was prepared under the direction of Jodi Nudelman, Regional 
Inspector General for Evaluation and Inspections in the New York regional 
office, and Nancy Harrison and Meridith Seife, Deputy Regional 
Inspectors General. 
Miriam Anderson served as the team leader for this study.  Other principal 
Office of Evaluation and Inspections staff from the New York regional 
office who contributed to the report include Jenell Clarke and 
Jason Kwong.  Central office staff who contributed include 
Eddie Baker, Jr.; Kevin Farber; Meghan Kearns; Christine Moritz; and 
Debra Roush. 
 Medicare Inappropriately Paid for Drugs Ordered by Individuals Without Prescribing Authority (OEI-02-09-00608)  23 
   
Office of Inspector General 
http://oig.hhs.gov 
 
The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-452, as 
amended, is to protect the integrity of the Department of Health and Human Services 
(HHS) programs, as well as the health and welfare of beneficiaries served by those 
programs.  This statutory mission is carried out through a nationwide network of audits, 
investigations, and inspections conducted by the following operating components: 
Office of Audit Services 
The Office of Audit Services (OAS) provides auditing services for HHS, either by conducting 
audits with its own audit resources or by overseeing audit work done by others.  Audits 
examine the performance of HHS programs and/or its grantees and contractors in carrying 
out their respective responsibilities and are intended to provide independent assessments of 
HHS programs and operations.  These assessments help reduce waste, abuse, and 
mismanagement and promote economy and efficiency throughout HHS. 
Office of Evaluation and Inspections 
The Office of Evaluation and Inspections (OEI) conducts national evaluations to provide 
HHS, Congress, and the public with timely, useful, and reliable information on significant 
issues.  These evaluations focus on preventing fraud, waste, or abuse and promoting 
economy, efficiency, and effectiveness of departmental programs.  To promote impact, OEI 
reports also present practical recommendations for improving program operations.  
Office of Investigations 
The Office of Investigations (OI) conducts criminal, civil, and administrative investigations 
of fraud and misconduct related to HHS programs, operations, and beneficiaries.  With 
investigators working in all 50 States and the District of Columbia, OI utilizes its resources 
by actively coordinating with the Department of Justice and other Federal, State, and local 
law enforcement authorities.  The investigative efforts of OI often lead to criminal 
convictions, administrative sanctions, and/or civil monetary penalties. 
Office of Counsel to the Inspector General 
The Office of Counsel to the Inspector General (OCIG) provides general legal services to 
OIG, rendering advice and opinions on HHS programs and operations and providing all 
legal support for OIGs internal operations.  OCIG represents OIG in all civil and 
administrative fraud and abuse cases involving HHS programs, including False Claims Act, 
program exclusion, and civil monetary penalty cases.  In connection with these cases, OCIG 
also negotiates and monitors corporate integrity agreements.  OCIG renders advisory 
opinions, issues compliance program guidance, publishes fraud alerts, and provides other 
guidance to the health care industry concerning the anti-kickback statute and other OIG 
enforcement authorities.