Department of Health and Human Services
OFFICE OF 
   
INSPECTOR GENERAL 
 
 
 
 
 
 
 
 
 
I   P
NVALID  RESCRIBER 
 
I M
DEN  TIFIERS ON  EDICARE 
 
P D D C  
ART    RUG  LAIMS
 
 
 
 
Daniel R. Levinson  
Inspector General 
 
June 2010 
OEI-03-09-00140   
   
I N T R O D U C T I O N  
 E X E C U T I V E   S U M M A R Y  
OBJECTIVE
 
To determine the extent to which invalid prescriber identifiers were 
used on Part D prescription drug event (PDE) records in 2007. 
BACKGROUND 
The Medicare Prescription Drug, Improvement, and Modernization Act 
of 2003 established Part D to provide an optional prescription drug 
benefit for all Medicare beneficiaries.  The Centers for Medicare & 
Medicaid Services (CMS) contracts with private companies, called plan 
sponsors, to administer the benefit through Part D drug plans.   
Part D plans must submit an electronic record, called a PDE record, to 
CMS for each covered prescription filled for their enrollees.  CMS 
requires that most PDE records contain an identifier for the drugs 
prescriber.  Acceptable prescriber identifiers include National Provider 
Identifiers (NPI), Drug Enforcement Administration (DEA) registration 
numbers, Unique Physician Identification Numbers (UPIN), and State 
license numbers.   
To determine the extent to which invalid prescriber identifiers were 
used on Part D claims, we compared prescriber identifiers that 
appeared on PDE records in 2007 to identifiers enumerated in NPI, 
DEA number, and UPIN registries.  We excluded from our review PDE 
records that contained prescriber identifiers classified as State license 
numbers because we did not have access to a national database of State 
license numbers and these records made up only 1.3 percent of all  
Part D claims in 2007. 
We considered prescriber identifiers to be invalid if they did not appear 
in any of the three registries.  Prescriber identifiers that were 
deactivated or retired before January 1, 2006, were also considered to 
be invalid for the purposes of our review. 
FINDINGS 
$1.2 billion in Medicare Part D prescription drug claims contained 
invalid prescriber identifiers in 2007.  Part D plans are required to 
include prescriber identifiers on PDE records they submit to CMS.  
However, Medicare drug plans and enrollees paid pharmacies $1.2 billion 
in 2007 for more than 18 million prescription drug claims that contained 
527,749 invalid prescriber identifiers.  These identifiers either were not 
  OEI-03-09-00140  INVALID PRESCRIBER IDENTIFIERS ON MEDICARE PART D DRUG CLAIMS  i   
   
E X E C U T I V E   S U M M A R Y  
listed in NPI, DEA number, and UPIN registries or had been deactivated 
or retired before January 1, 2006.  PDE records that contained invalid 
prescriber identifiers accounted for 2 percent of all PDE records 
submitted to CMS in 2007. 
Identifiers on 17 percent of the drug claims with invalid prescriber 
identifiers did not conform to format specifications.  Each type of 
prescriber identifier has specific length and format requirements.  For   
17 percent of the PDE records that contained invalid prescriber 
identifiers, the identifiers did not conform to length or format 
specifications.  Medicare drug plans and enrollees paid pharmacies    
$213 million in 2007 for PDE records with invalid prescriber identifiers 
that did not follow format specifications. 
Ten invalid identifiers accounted for 17 percent of the drug claims 
with invalid prescriber identifiers.  These 10 prescriber identifiers are 
the same length as a valid DEA number.  However, we confirmed with 
DEA that nine of the identifiers were never valid DEA numbers and the 
remaining identifier had been retired in 2005.  Medicare drug plans and 
enrollees paid pharmacies $237 million in 2007 for drug claims that 
contained these top 10 invalid identifiers.  A single invalid identifier 
accounted for $105 million of this amount.  We also found that 5 of the  
10 top invalid identifiers appeared on individual drug claims with 
payment amounts totaling more than $10,000 per claim.  Finally, a single 
company that is a large pharmacy benefit manager and mail-order 
pharmacy accounted for the majority of PDE records that contained one 
of the top invalid prescriber identifiers. 
RECOMMENDATIONS 
Prescriber identifiers are valuable Part D program safeguards.  These 
identifiers are the only data on Part D drug claims to indicate that 
legitimate practitioners have prescribed medications for Medicare 
enrollees.  The success of program integrity efforts may be limited 
without valid prescriber identifiers on Part D drug claims. 
Our evaluation found that $1.2 billion in Part D drug claims for 2007 
contained invalid prescriber identifiers.  We conclude that CMS and 
Part D plans have not instituted adequate procedures to detect invalid 
prescriber identifiers.  CMS and Part D plans do not verify that 
prescriber identifiers are enumerated in DEA number, NPI, or UPIN 
registries, nor do they apply claims-processing edits to check prescriber 
identifiers against known format requirements. 
  OEI-03-09-00140  INVALID PRESCRIBER IDENTIFIERS ON MEDICARE PART D DRUG CLAIMS  ii   
   
E X E C U T I V E   S U M M A R Y  
To address these concerns, we recommend that CMS: 
Conduct periodic reviews to ensure the validity of prescriber identifiers 
used on PDE records. 
Require Part D plans to institute procedures to (1) identify invalid identifiers 
in the prescriber identifier field on Part D drug claims and (2) flag for review 
Part D drug claims that contain invalid identifiers in the prescriber identifier 
field. 
AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL 
RESPONSE 
CMS concurred with both of our recommendations.  CMS stated that it 
agrees that invalid prescriber identifiers can hinder program oversight 
efforts for monitoring prescribing practices, but that invalid prescriber 
identifiers are not an automatic indication of invalid prescriptions or 
pharmacy claims.  The Office of Inspector General agrees with CMSs 
assertion that invalid prescriber identifiers do not automatically 
indicate invalid prescriptions or pharmacy claims.  However, CMSs 
efforts to determine the validity, medical necessity, or appropriateness 
of Part D prescriptions and drug claims may be limited without valid 
prescriber identifiers. 
CMS emphasized that there have been significant improvements in 
prescriber identifiers since 2007.  CMS stated that the significance of 
invalid DEA numbers used as prescriber identifiers will decrease 
drastically as the use of NPIs continues to increase.  CMS noted that 
the top 10 invalid prescriber identifiers listed in our report appeared on 
3.2 million PDE records in 2007, but that its own analysis indicates that 
these invalid identifiers appeared on approximately 451,100 PDE 
records in the last half of 2009.  While the reduction in the use of these 
invalid identifiers is a program integrity improvement, the fact that 
invalid identifiers continue to appear on any PDE records indicates that 
CMS and Part D plans are not ensuring the validity of prescriber 
identifiers on all Part D drug claims. 
Specifically, CMS concurred with our first recommendation and stated 
that it will implement a process to periodically review and evaluate 
trends associated with the validity of prescriber identifiers on PDE 
records to identify potential ongoing issues.  CMS will implement this 
process after it has taken further steps to remind Part D plans and 
pharmacies of NPI requirements. 
  OEI-03-09-00140  INVALID PRESCRIBER IDENTIFIERS ON MEDICARE PART D DRUG CLAIMS  iii   
   
E X E C U T I V E   S U M M A R Y  
CMS concurred with our second recommendation and stated that it will 
issue guidance instructing Part D plans to implement policies and 
procedures to identify and review invalid prescriber identifiers on     
Part D claims.  
 
 
  OEI-03-09-00140  INVALID PRESCRIBER IDENTIFIERS ON MEDICARE PART D DRUG CLAIMS  iv   
 T A B L E   O F   C O N T E N T S  
 
EXECUTIVE SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i
 
 
I N T RO DUC T IO N . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 
 
 
F I N D IN G S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9  
  $1.2 billion in Medicare Part D prescription drug claims        
contained invalid prescriber identifiers in 2007 . . . . . . . . . . . . . . . 9  
   
  Identifiers on 17 percent of the drug claims with invalid         
prescriber identifiers did not conform to format specifications. . . 10 
   
  Ten invalid identifiers accounted for 17 percent of the drug         
claims with invalid prescriber identifiers . . . . . . . . . . . . . . . . . . . 11 
 
 
R E C O MMEN D A T ION S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 
  Agency Comments and Office of Inspector General Response . . . . 14 
   
 
APPENDIX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 
  A:  Agency Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 
 
 
A C K NO WL E D G M E N T S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18   
   
 I N T R O D U C T I O N  
OBJECTIVE 
To determine the extent to which invalid prescriber identifiers were 
used on Part D prescription drug event (PDE) records in 2007. 
BACKGROUND 
The Medicare Prescription Drug, Improvement, and Modernization Act 
of 2003 established Part D to provide an optional prescription drug 
benefit for all Medicare beneficiaries.  The Centers for Medicare & 
Medicaid Services (CMS) contracts with private companies, called plan 
sponsors, to administer the benefit through Part D drug plans.  Plans 
provide Part D benefits to enrollees and submit drug claims data to 
CMS for plan payment calculations.  Total Part D program expenditures 
were approximately $49.5 billion in 2007 and $49.3 billion in 2008.1, 2  
Oversight of the Part D program is one of the top management and 
performance challenges that currently face the Department of Health & 
Human Services (HHS).3  Prescriber identifiers on Part D drug claims 
are valuable program integrity safeguards.  The prescriber identifier 
indicates that a legitimate practitioner has prescribed drugs for a     
Part D enrollee and enables Part D plans and CMS, as part of 
postpayment reviews and investigations, to determine who prescribed 
covered drugs.  The success of these program integrity activities may be 
limited without valid prescriber identifiers on Part D drug claims. 
Part D Prescription Drug Claims 
Pursuant to sections 1860D-15(c)(1)(C) and (d)(2) of the Social Security 
Act, as a condition of payment, all Part D plans must submit data and 
information necessary for CMS to carry out Part D payment provisions.  
Plans submit an electronic record to CMS for each covered prescription 
filled for their enrollees.  This electronic record, called a PDE record, 
contains drug cost and payment data fields that enable CMS to make 
payments to plans and oversee the Part D benefit.  In 2007, the PDE 
record contained 37 required data fields, including drug cost, payment, 
 
1 2008 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and 
Federal Supplementary Medical Insurance Trust Funds, March 25, 2008, p. 5.  Available 
online at http://www.cms.hhs.gov/ReportsTrustFunds/.  Accessed on March 3, 2009. 
2 2009 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and 
Federal Supplementary Medical Insurance Trust Funds, May 12, 2009, p. 5.  Available 
online at http://www.cms.hhs.gov/ReportsTrustFunds/.  Accessed on January 26, 2010. 
3 HHS, FY 2008 Agency Financial Report, Section III.  November 17, 2008, p. III-3.  
Available online at http://www.hhs.gov/afr/.  Accessed on October 19, 2009. 
  OEI-03-09-00140  INVALID PRESCRIBER IDENTIFIERS ON MEDICARE PART D DRUG CLAIMS  1   
   
I N T R O D U C T I O N  
enrollee, plan, drug, pharmacy, and prescriber identifier fields.  Part D 
plans submitted almost 1 billion PDE records to CMS in 2007. 
Prescriber Identifiers on Prescription Drug Claims 
CMS requires that PDE records submitted to plans in standard 
electronic National Council for Prescription Drug Programs format 
contain an identifier for the drugs prescriber.  According to CMS 
requirements for submitting PDE data, some of the PDE data fields       
 ... such as pharmacy and prescriber identifiers will be used for 
validation of the claims as well as for other legislated functions such as 
quality monitoring, program integrity, and oversight.4  In chapter 9, 
section 50, of the Medicare Prescription Drug Benefit Manual, CMS 
recommends that sponsors prepare and review reports of                  
drug-prescribing patterns by physician to identify potential prescriber 
fraud.  However, according to CMS, it does not have any edits in place 
to check the data in the prescriber identifier field on PDE records. 
The pharmacy that fills an enrollees prescription enters the prescriber 
identifier on the drug claim.  The prescriber identifier qualifier field on 
the PDE record contains one of four codes that correspond to the type of 
identifier entered in the prescriber identifier field.  As defined by CMS, 
the prescriber identifier field on standard format drug claims: 
will contain the prescribers unique identification number.  
CMS will transition to use of the national provider identifier 
(NPI) when it is implemented.  In the interim, CMS requires 
use of a DEA [Drug Enforcement Administration] number 
whenever it uniquely identifies the prescriber and is allowed by 
state law.  In other cases, the prescribers state license number 
or Unique [Physician] Identification Number (UPIN#) shall be 
used.5 
CMS does not require the prescriber identifier and prescriber identifier 
qualifier fields to be completed on Part D drug claims submitted to 
plans in nonstandard format, such as beneficiary-filed claims and paper 
claims. 
National Provider Identifier.  The administrative simplification provisions of 
the Health Insurance Portability and Accountability Act of 1996 (HIPAA), 
P.L. 104-191,  262, mandated that the Secretary of HHS adopt a standard 
 
4 CMS, Instructions:  Requirements for Submitting Prescription Drug Event Data (PDE), 
April 27, 2006, pp. 56. 
5 CMS, op. cit., p. 13. 
  OEI-03-09-00140  INVALID PRESCRIBER IDENTIFIERS ON MEDICARE PART D DRUG CLAIMS  2   
   
I N T R O D U C T I O N  
unique health identifier for health care providers.6  Beginning May 23, 
2005, providers were able to start applying for an NPI.7  Since May 23, 
2008, NPIs have been used to identify health care providers to their health 
care partnerssuch as health plans, clearinghouses, and other 
providerson all covered electronic health care transactions.  The NPI is 
intended to replace provider identifiers that have traditionally been used 
in standard health care transactions.  CMS discloses certain NPI data to 
the public on its Web site.  These data are available in a query-only 
database known as the NPI Registry and a downloadable file that is 
updated monthly. 
 
Some drug prescribers are not covered entities under HIPAA and may 
choose not to obtain an NPI.8  In a May 2008 memorandum to Part D 
plan sponsors, CMS clarified that prescriber identifiers that are not 
NPIs may be used on Part D drug claims when a prescriber does not 
have an NPI or when the pharmacy cannot obtain a prescribers NPI.9  
CMS stressed that plans and pharmacies should make all reasonable 
efforts to obtain NPIs in the Prescriber ID field, but that plans are not 
permitted to establish point-of-sale claims-processing edits that would 
reject claims without NPIs in the prescriber identifier field.  CMS stated 
in the memorandum that plans should establish alternative policies 
and procedures outside of their claims processing that address potential 
non-compliance with NPI prescriber ID requirements ....  CMS 
required Part D sponsors to attest that enrollee access to Part D drugs 
would not be hindered because of pharmacy claims without prescribers 
NPIs after May 23, 2008the date of full NPI implementation. 
Drug Enforcement Administration registration number.  A DEA registration 
number may be used to identify the drug prescriber on a PDE claim.  
DEA regulations require every individual or entity that handles 
 
6 42 U.S.C.  1320d and 1320d-2. 
7 CMS, MLN Matters Number MM4320, January 1, 2006.  Available online at 
http://www.cms.hhs.gov/MLNMattersArticles/downloads/MM4320.pdf.  Accessed on        
January 26, 2010. 
8 69 Fed. Reg. 3445 (Jan. 23, 2004).  Covered entities under HIPAA include health plans, 
health care clearinghouses, and health care providers who transmit health information in 
electronic form in connection with standard health care transactions.  HIPAA 
Administrative Simplification:  National Plan and Provider Enumeration System Data 
Dissemination, 72 Fed. Reg. 30011 (May 30, 2007); 45 CFR  162.404.  
9 CMS, Prescriber Identifier on Part D NCPDP Pharmacy Claims Transactions,          
May 1, 2008.  Available online at 
http://www.cms.gov/PrescriptionDrugCovContra/Downloads/MemoNPIPrescriberID_05.01.0
8v2.pdf.  Accessed on September 21, 2009. 
  OEI-03-09-00140  INVALID PRESCRIBER IDENTIFIERS ON MEDICARE PART D DRUG CLAIMS  3   
   
I N T R O D U C T I O N  
controlled substances to be registered with DEA unless it is exempt by 
regulation.10  DEA registration grants practitioners Federal authority 
to handle controlled substances.11  DEA provides a database of active 
and retired DEA registrants to the National Technical Information 
Services of the Department of Commerce. 
Unique Provider Identification Number.  A UPIN may be used to identify a 
prescriber on a PDE claim.  The Consolidated Omnibus Budget 
Reconciliation Act of 1985 required CMS to establish UPINs for all 
physicians who provide services to Medicare beneficiaries.  In 1994, 
CMS expanded the use of UPINs to other health care providers, such as 
nurse practitioners, and to group physician practices.  The UPIN 
Registry contains information on all assigned UPINs.  CMS ceased 
issuing UPINs in June 2007 and retired the UPIN Registry.  The data 
in the UPIN Registry are still available and current as of the final June 
2007 update. 
State license number.  A State license number may also be used in the 
prescriber identifier field on a PDE claim.  Medical licenses are typically 
granted to physicians and other medical practitioners by the board of 
medicine in each State.  These boards set their own rules and regulate 
the practice of medicine in their States.  Practitioners cannot obtain 
DEA registration without a State medical license. 
We excluded from our review PDE records that contained prescriber 
identifiers classified as State license numbers because we did not have 
access to a national database of State license numbers and these records 
made up only 1.3 percent of all Part D claims in 2007. 
Part D Program Oversight and Prescriber Identifiers 
CMS contracts with outside entities, known as Medicare Drug Integrity 
Contractors (MEDIC), to address potential fraud, waste, and abuse 
related to the Part D benefit.  MEDICs are required to identify and 
investigate potential Part D fraud and abuse and identify Part D 
program vulnerabilities.  MEDICs must submit a quarterly report to 
CMS describing vulnerabilities identified during the previous quarter.  
Two MEDICs identified problems with invalid prescriber identifiers on 
 
10 21 CFR  1301.11. 
11 Ibid.  The Controlled Substances Act defines a practitioner as a physician, dentist, 
veterinarian, scientific investigator, pharmacy, hospital, or other person licensed, 
registered, or otherwise permitted to distribute, dispense, conduct research with respect to, 
administer, or use in teaching or chemical analysis, a controlled substance in the course of 
professional practice or research, 21 U.S.C.  802(21). 
  OEI-03-09-00140  INVALID PRESCRIBER IDENTIFIERS ON MEDICARE PART D DRUG CLAIMS  4   
   
I N T R O D U C T I O N  
PDE claims in vulnerability reports provided to CMS in 2007 and 2008.  
In these reports, MEDICs documented concerns about their inability to 
investigate Part D prescription fraud without valid prescriber 
identifiers. 
Related Office of Inspector General Work 
The Office of Inspector General (OIG) has issued a number of reports 
regarding problems with UPINs used to identify ordering physicians on 
medical equipment claims, including invalid and inactive UPINs, 
inappropriate use of surrogate UPINs, and UPINs representing 
deceased physicians.12, 13  OIG found that the lack of edits or other 
reviews that validate UPINs listed on Medicare durable medical 
equipment claims presents a vulnerability that has allowed millions of 
dollars in questionable claims to be paid.14 
In February 2009, OIG issued its most recent report on invalid 
identifiers, entitled Medicare Payments in 2007 for Medical Equipment 
and Supply Claims With Invalid or Inactive Referring Physician 
Identifiers (OEI-04-08-00470).  OIG reported that Medicare allowed 
almost $34 million in 2007 for medical equipment and supply claims 
with invalid or inactive referring physicians UPINs, including             
$5 million for claims with deceased referring physicians UPINs.  That 
report also found that Medicare allowed over $300,000 in 2007 for 
claims with invalid referring physicians NPIs.  In its recommendations 
to CMS, OIG noted that while CMS appeared to be implementing 
system changes to verify that NPIs are submitted in the correct format, 
it is unclear whether CMS will implement controls to identify invalid or 
inactive NPIs on Medicare claims. 
 
 
 
12 Medical Equipment and Supply Claims With Invalid or Inactive Physician Numbers, 
OEI-03-01-00110, November 2001; and Durable Medical Equipment Ordered With 
Surrogate Physician Identification Numbers, OEI-03-01-00270, September 2002. 
13 Under certain conditions, practitioners may use surrogate UPINs when they have not 
been assigned their own UPINs.  Surrogate UPINs are OTH000, PHS000, RES000, 
RET000, and VAD000. 
14 Medicare Payments for Claims With Identification Numbers of Dead Doctors:  Hearing 
Before the U.S. Senate Committee on Homeland Security and Governmental Affairs 
Permanent Subcommittee on Investigations, 110th Congress, 2008.  Statement of Robert 
Vito, Regional Inspector General for Evaluation and Inspections, OIG, Department of 
Health & Human Services. 
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I N T R O D U C T I O N  
METHODOLOGY 
We determined the extent to which invalid prescriber identifiers were 
used on PDE records in 2007.  We excluded certain PDE records from 
our review, as described below.   
Data Collection 
We created a file of PDE records from CMS with dates of service from 
January 1 to December 31, 2007.  We excluded the following types of 
PDE records from our analysis: 
  Records that contained a prescriber identifier that was classified as 
a State license number in the prescriber identifier qualifier field.  
We did not have access to a single national database of State 
license numbers.  These records made up only 1.3 percent of all 
Part D claims in 2007. 
  Records for noncovered and over-the-counter drugs.  We limited our 
review to PDE records for Part D covered drugs.  We also excluded 
records for over-the-counter drugs because a prescription is not 
required to obtain them. 
  Records submitted in a nonstandard format, such as records for a 
beneficiary-filed claim or a paper claim.  The prescriber identifier is 
not required on these PDE records. 
Definition of valid and invalid prescriber identifiers.  To determine whether 
prescriber identifiers on the remaining PDE claims were valid, we 
compared them to all of the identifiers enumerated in the three 
registries listed below. 
(1) We accessed an active NPI file from December 2008 on the CMS 
Web site.  We also obtained a file containing deactivated NPIs from 
CMS. 
(2) We accessed a file of active DEA registrants from December 2008 
and a file of DEA registration numbers that were retired between 
January 1, 2006, and December 31, 2008. 
(3) We accessed CMSs active and inactive UPIN registries.  The data 
are current as of June 2007. 
We considered prescriber identifiers to be valid if they were active at 
any point during 2007 according to the NPI, DEA number, or UPIN 
registries.  We also considered prescriber identifiers to be valid if they 
were active at any point during 2006 because these identifiers may have 
  OEI-03-09-00140  INVALID PRESCRIBER IDENTIFIERS ON MEDICARE PART D DRUG CLAIMS  6   
   
I N T R O D U C T I O N  
legitimately appeared on drug claims in 2007 because of prescription 
refills. 
We considered prescriber identifiers to be invalid if they did not appear 
in any of the three registries.  If a prescriber identifier was once active, 
but was deactivated or retired before January 1, 2006, we considered it 
to be invalid for purposes of our review.   
Data Analysis 
We used the codes in the prescriber identifier qualifier field to group 
invalid prescriber identifiers by type.  We determined whether invalid 
identifiers followed format specifications for NPIs, DEA numbers, and 
UPINs.  For invalid identifiers coded as NPIs, we determined whether 
the identifiers appeared as 10-digit numbers beginning with a 1, 2, 3,   
or 4.  For invalid identifiers coded as DEA numbers, we determined 
whether the identifiers were nine digits long; contained two letters 
followed by seven numbers; and began with A, B, F, or M.  In addition, 
we compared them to a verification formula that DEA uses to detect 
invalid numbers in positions three through nine.  For invalid identifiers 
coded as UPINs, we determined whether the identifiers were six digits 
long and contained one letter followed by five numbers. 
We summed six payment fields to calculate Part D plan and enrollee 
payments to pharmacies for PDE records with invalid prescriber 
identifiers:  Patient Pay Amount, Other True Out-Of-Pocket (TrOOP) 
Amount, Low-Income Cost-Sharing Subsidy Amount, Patient Liability 
Reduction Due to Other Payer Amount, Covered D Plan Paid Amount, 
and Noncovered Plan Paid Amount.  These payment fields are defined 
in CMSs Instructions:  Requirements for Submitting Prescription Drug 
Event Data and described below. 
  The Patient Pay Amount field lists the dollar amount the 
beneficiary paid that is not reimbursed by a third party (e.g., 
copayments, coinsurance, deductible, or other patient payment 
amounts). 
  The Other TrOOP Amount field records all qualified third-party 
payments that contribute to a beneficiarys TrOOP costs, except for 
amounts in the Low-Income Cost-Sharing Subsidy Amount and 
Patient Pay Amount fields. 
  The Low-Income Cost-Sharing Subsidy Amount field contains 
Medicare payments to plans that subsidize the cost-sharing 
  OEI-03-09-00140  INVALID PRESCRIBER IDENTIFIERS ON MEDICARE PART D DRUG CLAIMS  7   
   
I N T R O D U C T I O N  
  The Patient Liability Reduction Due to Other Payer Amount field 
contains amounts by which patient liability is reduced because of 
payments by other payers that do not participate in Part D and are 
not TrOOP eligible. 
  The Covered D Plan Paid Amount field contains the net amount the 
plan paid for standard benefits (covered Part D drugs). 
  The Noncovered Plan Paid Amount field contains the net amount 
paid by the plan for benefits beyond the standard benefit. 
We used PDE records containing invalid prescriber identifiers to 
calculate summary statistics by invalid identifier, including total Part D 
payments, total number of Part D enrollees, and total number of 
pharmacies per invalid prescriber identifier. 
Limitations 
We did not validate the accuracy of the NPI, DEA number, and UPIN 
registries that we used to verify prescriber identifier values on PDE 
records.  In addition, we did not assess the medical appropriateness of 
the drug claims submitted with invalid prescriber identifiers. 
Standards 
This study was conducted in accordance with the Quality Standards for 
Inspections approved by the Council of the Inspectors General on 
Integrity and Efficiency. 
  OEI-03-09-00140  INVALID PRESCRIBER IDENTIFIERS ON MEDICARE PART D DRUG CLAIMS  8   
   
F I N D I N G S  
 F I N D I N G S  
$1.2 billion in Medicare Part D prescription  Part D plans are required to 
drug claims contained invalid prescriber  include prescriber identifiers on the 
PDE records they submit to CMS.15  
identifiers in 2007 
Of all PDE records submitted to 
CMS in 2007, 95 percent were coded as DEA numbers, 3.6 percent were 
coded as NPIs, and less than one-tenth of 1 percent were coded as 
UPINs.16 
Our comparison of prescriber identifiers on PDE records for 2007 to 
NPI, DEA number, and UPIN registry databases reveals that Medicare 
drug plans and enrollees paid pharmacies $1.2 billion in 2007 for more 
than 18 million prescription drug claims that contained 527,749 invalid 
prescriber identifiers.  These identifiers are invalid either because they 
were not listed in the NPI, DEA number, and UPIN registries we 
reviewed or because they had been deactivated or retired before 
January 1, 2006.  PDE records that contained invalid prescriber 
identifiers accounted for 2 percent of all PDE records submitted to CMS 
in 2007. 
 
Table 1:  Part D PDE Records With Invalid Prescriber Identifiers by Identifier Type, 2007 
 
  Number of PDE  Percentage of All  Payments for PDE 
Prescriber 
Records With Invalid  PDE Records With  Records With Invalid 
Identifier Type1 
  Identifiers  Invalid Identifiers  Identifiers 
DEA number  18,053,408  98.24%  $1,223,363,037 
 
NPI  309,485  1.68%  $23,429,844 
 
UPIN  13,445  0.07%  $880,294 
 
 Total  18,376,338  100%  $1,247,673,175 
      
1The type of prescriber identifier on PDE records was determined using the codes in the prescriber identifier qualifier 
field. 
Source:  OIG analysis of CMSs 2007 PDE records. 
 
As shown in Table 1, 98 percent of PDE records that contained invalid 
prescriber identifiers were coded as DEA numbers according to the 
prescriber identifier qualifier field.  This field contains one of four 
numeric codes that correspond to the type of identifier reported in the 
prescriber identifier field.  Only 1.7 percent of PDE records with invalid 
 
15 CMS does not require prescriber identifiers to be reported on Part D claims submitted 
to plans in nonstandard format (e.g., beneficiary-filed claims and paper claims). 
16 Another 1.3 percent of PDE records submitted to CMS in 2007 contained prescriber 
identifiers coded as State license numbers.  We excluded these PDE records from our 
review. 
  OEI-03-09-00140  INVALID PRESCRIBER IDENTIFIERS ON MEDICARE PART D DRUG CLAIMS  9   
   
F I N D I N G S  
prescriber identifiers were coded as NPIs.  Less than one-tenth of 1 
percent of records with invalid prescriber identifiers were coded as 
UPINs. 
 
Identifiers on 17 percent of the drug claims with  Each type of prescriber 
invalid prescriber identifiers did not conform to  identifier has specific length 
and format requirements.  For 
format specifications 
17 percent of the PDE records 
that contained invalid prescriber identifiers, the identifiers did not 
conform to length or format specifications.  These PDE records 
represented $213 million in payments by Medicare drug plans and 
enrollees in 2007.   
Identifiers did not meet format specifications on 17 percent of PDE records 
with invalid DEA numbers  
DEA numbers are nine-character identifiers containing two letters that 
begin with A, B, F, or M followed by seven numbers.  We found that          
17 percent of PDE records with invalid prescriber identifiers coded as 
DEA numbers contained identifiers that did not conform to format 
specifications.  For 55 percent of these PDE records, the identifiers were 
shorter or longer than nine characters.  For the remaining PDE records, 
invalid identifiers were the correct length but contained inappropriate 
letters, numbers, punctuation marks, or keyboard symbols in one or 
more of the nine positions.  One invalid prescriber identifier coded as a 
DEA number that did not meet format specifications was a string of 
nine zeros (000000000).  This single invalid identifier accounted for 
almost 40,000 PDE records worth $3.7 million in 2007. 
Identifiers did not conform to format specifications on 88 percent of        
PDE records with invalid NPIs 
NPIs are 10-digit numbers beginning with a 1, 2, 3 or 4.  We found that 
88 percent of PDE records with invalid identifiers coded as NPIs 
contained identifiers that did not follow the correct format.  For            
83 percent of these PDE records, the invalid identifiers contained more 
or fewer than 10 digits.  For example, a 6-digit identifier, A00000, was 
coded as an NPI and appeared on 2,188 PDE records.  For the majority 
of the remaining records, invalid identifiers were the correct length, but 
contained a character other than 1, 2, 3, or 4 in the first position.  
Typically, these invalid identifiers began with a zero.  While positions   
2 through 10 of a valid NPI should contain only numbers, we observed 
  OEI-03-09-00140  INVALID PRESCRIBER IDENTIFIERS ON MEDICARE PART D DRUG CLAIMS  10   
   
F I N D I N G S  
invalid NPIs that contained letters, punctuation marks, and keyboard 
symbols in these positions. 
Identifiers did not meet format specifications on 91 percent of PDE records 
with invalid UPINs 
UPINs are six-character identifiers starting with one letter followed by 
five numbers or surrogate UPINs.17  We found that 91 percent of PDE 
records with invalid prescriber identifiers coded as UPINs contained 
identifiers that did not appear in the correct format.  For 66 percent of 
these PDE records, the invalid identifiers were longer or shorter than 
six characters.  For the remaining records, the identifiers were the 
correct length, but often contained numbers or symbols in the first 
position and letters in the second and third positions. 
 
In 2007, 527,749 different 
Ten invalid identifiers accounted for 17 percent 
invalid prescriber identifiers 
of the drug claims with invalid prescriber 
were used on PDE records.  
identifiers
However, 10 of these invalid 
identifiers accounted for 17 percent of all PDE records with invalid 
prescriber identifiers in 2007.  Medicare drug plans and enrollees paid 
pharmacies $237 million in 2007 for drug claims that contained these  
10 invalid identifiers. 
Although these invalid identifiers are the same length as a valid DEA 
number, the identifiers are suspect because they contain inappropriate 
letters and repeating or sequential number strings.  We compared these 
10 identifiers to a verification formula that DEA uses to detect invalid 
numbers in positions three through nine.  We found that the numbers in 
the identifiers meet the requirements of this formula.  However, we 
confirmed with DEA that nine of these identifiers were never valid DEA 
numbers and that the remaining identifier had been retired in 2005.  
Table 2 displays the number of PDE records and the amount of plan and 
enrollee payments in 2007 associated with each of the top 10 invalid 
identifiers.                                                      
 
 
 
 
17 Eight percent of PDE records with invalid UPINs as prescriber identifiers contained 
surrogate UPINs.  We did not compare surrogate UPINs to UPIN format specifications. 
  OEI-03-09-00140  INVALID PRESCRIBER IDENTIFIERS ON MEDICARE PART D DRUG CLAIMS  11   
   
F I N D I N G S  
 
Table 2:  PDE Records and Payments for Top 10 Invalid Prescriber Identifiers 
  in 2007 
Number of PDE  Plan and Enrollee 
  Invalid Prescriber Identifier 
Records for Invalid  Payments for Invalid 
 
Identifier  Identifier 
 
AA0000000  1,754,892  $104,670,821 
 
AB1111119  429,049  $47,664,819 
  ZZ4567890  194,080  $31,242,291 
  AB1234563  160,923  $10,283,875 
AA1111119  121,383  $7,980,938 
 
AB5555555  106,282  $9,413,610 
 
CC1462667  103,329  $6,949,677 
 
AS1111119  101,584  $6,943,650 
 
AS1234563  94,104  $6,373,417 
  AM1111119  86,241  $5,642,300 
    Total  3,151,867  $237,165,398 
Percentage of all records       
 
and payments with invalid  17.15%  19.01% 
identifiers 
   
 
Source:  OIG analysis of CMSs 2007 PDE records. 
 
A single invalid prescriber identifier, AA0000000, was recorded on 
almost 1.8 million PDE records in 2007 for 151,269 beneficiaries 
enrolled with 248 different Part D plan sponsors.  In other words,          
10 percent of all PDE records with invalid prescriber identifiers in 2007 
contained this one invalid identifier.  Part D plans and Medicare 
enrollees paid pharmacies almost $105 million for these PDEs. 
Top invalid identifiers were used on prescription drug claims worth more 
than $10,000 each 
We found that 5 of the 10 top invalid identifiers listed in Table 2 were 
used on claims for very expensive prescription drugs in 2007.  These 
invalid identifiers appeared on individual PDE records with payment 
amounts totaling more than $10,000 each.  Payment amounts ranged 
from $10,057 to $17,998 for a single claim.  The top invalid prescriber 
identifier, AA0000000, appeared on 15 drug claims worth more than 
$10,000 each.  The invalid identifier ranked second in Table 2, 
AB1111119, was used on five individual drug claims worth more than 
$11,000 each.  The invalid prescriber identifier ranked third in Table 2, 
ZZ4567890, was used on 10 claims worth more than $10,000 each. 
  OEI-03-09-00140  INVALID PRESCRIBER IDENTIFIERS ON MEDICARE PART D DRUG CLAIMS  12   
   
F I N D I N G S  
One large company accounted for the majority of PDE records that 
contained a top invalid prescriber identifier 
Nine of the ten top invalid prescriber identifiers displayed in Table 2 
were used on Part D drug claims submitted by thousands of individual 
pharmacies in 2007.  However, the remaining invalid identifier, 
ZZ4567890, was used on drug claims that were submitted using                
37 different pharmacy provider numbers.  In 2007, over 99 percent of 
the PDE records that contained the ZZ4567890 prescriber identifier 
were submitted by a single company under multiple provider numbers 
that reflect a number of the companys locations across the country.  
This company is a large pharmacy benefit manager and mail-order 
pharmacy. 
  OEI-03-09-00140  INVALID PRESCRIBER IDENTIFIERS ON MEDICARE PART D DRUG CLAIMS  13   
   
 R E C O M M E N D A T I O N S  
 
Prescriber identifiers are valuable Part D program safeguards.  These 
identifiers are the only data on Part D drug claims used to indicate that 
legitimate practitioners have prescribed medications for Medicare 
enrollees.  The success of prepayment and postpayment reviews and 
fraud investigations may be limited without valid prescriber identifiers 
on Part D drug claims. 
Based on a review of PDE records submitted to CMS in 2007, our 
evaluation found that $1.2 billion in Part D drug claims contained 
invalid prescriber identifiers.  We did not, however, assess the medical 
appropriateness of the drug claims submitted with these invalid 
prescriber identifiers. 
We conclude that CMS and Part D plans have not instituted adequate 
procedures to detect invalid prescriber identifiers.  CMS and plans do 
not verify that prescriber identifiers are enumerated in NPI, DEA 
number, or UPIN registries, nor do they apply claims-processing edits to 
check prescriber identifiers against known format requirements. 
To address these concerns, we recommend that CMS: 
Conduct periodic reviews to ensure the validity of prescriber identifiers 
used on PDE records. 
Require Part D plans to institute procedures to (1) identify invalid identifiers 
in the prescriber identifier field on Part D drug claims and (2) flag for review 
Part D drug claims that contain invalid identifiers in the prescriber identifier 
field. 
AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL 
RESPONSE 
CMS concurred with both of our recommendations.  CMS stated that it 
agrees that invalid prescriber identifiers can hinder program oversight 
efforts for monitoring prescribing practices, but that invalid prescriber 
identifiers are not an automatic indication of invalid prescriptions or 
pharmacy claims.  OIG agrees with CMSs assertion that invalid 
prescriber identifiers do not automatically indicate invalid prescriptions 
or pharmacy claims.  However, CMSs efforts to determine the validity, 
medical necessity, or appropriateness of Part D prescriptions and drug 
claims may be limited without valid prescriber identifiers. 
  OEI-03-09-00140  INVALID PRESCRIBER IDENTIFIERS ON MEDICARE PART D DRUG CLAIMS  14   
   
R E C O M M E N D A T I O N S  
CMS emphasized that there have been significant improvements in 
prescriber identifiers since 2007.  CMS stated that the majority of 
prescriber identifiers on 2009 PDE records were NPIs, since NPIs 
became the standard identifier on electronic health care transactions in 
May 2008.  CMS stated that the significance of invalid DEA numbers 
used as prescriber identifiers will decrease drastically as the use of 
NPIs continues to increase.  CMS noted that the top 10 invalid 
prescriber identifiers listed in our report appeared on 3.2 million PDE 
records in 2007, but that its own analysis indicates that these invalid 
identifiers appeared on approximately 451,100 PDE records in the last 
half of 2009.  While the reduction in the use of these invalid identifiers 
is a program integrity improvement, the fact that invalid identifiers 
continue to appear on any PDE records indicates that CMS and Part D 
plans are not ensuring the validity of prescriber identifiers on all Part D 
drug claims. 
Specifically, CMS concurred with our first recommendation and stated 
that it will implement a process to periodically review and evaluate 
trends associated with the validity of prescriber identifiers on PDE 
records to identify potential ongoing issues.  CMS stated that it will 
implement this process after it has taken further steps to remind Part D 
plans and pharmacies of NPI requirements. 
CMS concurred with our second recommendation and stated that it will 
issue guidance instructing Part D plans to implement policies and 
procedures to identify and review invalid prescriber identifiers on     
Part D claims.  The guidance will include a reminder that CMS expects 
plans to have procedures in place outside of their claims processing to 
address potential noncompliance with NPI prescriber ID requirements.  
CMS stated that Part D sponsors and CMS [must] strike a balance 
between ensuring valid prescriber identifiers on all Part D claims and 
ensuring beneficiary access to legitimate, medically necessary Part D 
prescriptions.  CMS stated that it will continue to instruct Part D 
sponsors not to implement point-of-sale edits to reject Part D claims 
with invalid prescriber identifiers because of the significant potential 
to interrupt medically necessary drug therapies. 
The full text of CMSs comments is provided in Appendix A. 
  OEI-03-09-00140  INVALID PRESCRIBER IDENTIFIERS ON MEDICARE PART D DRUG CLAIMS  15  x 
A  P  PEN  D  A 

Agency Comments 
{4
./'..~'.iP"I(.J'Q.lct,  
DEPARTMENT OF HEALTH & HUMAN SERVICES  Centers for Medicare & Medicaid Services 
",",,-""': 
~)<<Ga (;.  Administrator 
Washington, DC 20201 
.DATE:  APR  - 5 20i0 
TO: 	 Daniel R. Levinson 

Inspector General 

FROM: 	 Charlene Frizzera 

Acting Administrator 

SUBJECT: 	 Office of Inspector General (orG) Draft Report:  "Invalid Prescriber Identifiers 
on Medicare Part D Drug Claims" (OEI-03-09-00140) 
Thank you for the opportunity to review and comment on this orG draft report to determine the 
extent to which invalid prescriber identifiers were used on Part D prescription drug event (PDE) 
records in 2007. The Centers for Medicare & Medicaid Services (CMS) understands that 
prescriber identifiers on PDE records can provide valuable infOimation for program oversight 
and, therefore, acknowledges the importance of collecting valid prescriber identifiers. 
The CMS concurs with the report recommendations.  We would like to provide some 
clarification about payments of $1 ,2 billion you identified were made for invalid claims. The 
prescriber identifier is only 1 of 37 data elements that CMS collected on each PDE in 2007 is not 
generally indicative of invalid prescriptions. Instead, it often reflects that the pharmacy did not 
have access to the prescriber's DEA number when filling prescriptions for non-controlled 
substances.  So while CMS agrees that invalid prescriber identifiers can hinder program 
oversight efforts for monitoring prescribing practices of specific prescribers, this is not an 
automatic indication for invalid prescriptions or pharmacy claims, 
In addition, CMS wishes to emphasize that there have been significant improvements in 
prescriber identifiers since 2007.  As mentioned in the report, the national provider identifier 
(NPI) became the standard identifier on electronic health care transactions as of May 23,2008. 
As a result of that change, the majority of prescriber identifiers reported on 2009 PDEs were 
NPls, compared to the use of DE A numbers in 2007. A~ the percentage of prescriber NPIs 
continues to increase, the significance of invalid prescriber DEA numbers will decrease 
drastically.  For example, while the orG "Top 10 lnvalid Prescriber Identifiers" (all DEA 
numbers) accounted for approximately 3,2 million PDEs in 2007, an ad hoc CMS analysis 
showed only approximately 451.1 00 instances of those same DEA numbers (or .08 percent of all 
PDE records) in the last 6 months of2009. Moreover, unlike invalid prescriber DEA numbers, 
the oro report did not identify default prescriber NPls as a source of invalid prescriber 
identifiers.  Accordingly, CMS will take this into account when considering future actions or 
guidance. 
OEI030900140  INVALID PRESCRIBER IDENTIFIERS ON MEDICARE PART D DRUG CLAIMS  16   
   
A P P E N D I X   ~   A  
  OEI-03-09-00140  INVALID PRESCRIBER IDENTIFIERS ON MEDICARE PART D DRUG CLAIMS  17   
   
 A C K N O W L E D G M E N T S  
 
This report was prepared under the direction of Robert A. Vito, Regional 
Inspector General for Evaluation and Inspections in the Philadelphia 
regional office, and Linda M. Ragone, Deputy Regional Inspector 
General. 
Amy Sernyak served as the team leader for this study.  Other principal 
Office of Evaluation and Inspections staff from the Philadelphia 
regional office who contributed to the report include Emily Multari; 
central office staff who contributed include Eddie Baker, Jr.,           
David Graf, and Rita Wurm.  We also would like to acknowledge the 
assistance of Jeffrey Cohen and Amanda Fleck from the Office of 
Inspector Generals Office of Audit Services.  
 
  OEI-03-09-00140  INVALID PRESCRIBER IDENTIFIERS ON MEDICARE PART D DRUG CLAIMS  18   
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: 
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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 
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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 
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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.