Department  of Health  and Human  Services 
OFFICE OF 
INSPECTOR GENERAL 
QUESTIONABLE  PRACTICES  INVOLVING 
NEBULIZER  DRUG  THERAPY  OFFICE  OF  INSPECTOR  GENERAL 
The  mission of the Office  of Inspector  General  (OIG),  as mandated  by Public Law 
95-452, is to protect  the integrity of the Department  of Health  and Human  Services 
programs  as well as the health and welfare  of beneficiaries  served by them.  This 
statutory mission is carried out through a nationwide  program  of audits, investigations, 
inspections,  sanctions, and fraud alerts.  The  Inspector  General  informs the Secretary 
of program  and management  problems  and recommends  legislative, regulatory, and 
operational  approaches  to correct  them. 
Office of Evaluation and Inspections 
The  Office  of Evaluation  and Inspections  (OEI)  is one  of several components  of the 
Office  of Inspector  General.  It conducts  short-term management  and program 
evaluations  (called  inspections)  that focus  on issues of concern  to the Department,  the 
Congress,  and the public.  The inspection  reports  provide  findings and 
recommendations  on the efficiency, vulnerability, and effectiveness  of departmental 
programs. 
The  OEIS Philadelphia  Regional  Office  prepared  this report  under the direction  of 
Robert  A. Vito,  Regional  Inspector  General.  Principal OEI  staff included: 
Region
 Headquarters 
Robert  A.  Katz, Project  Leader
 Mary Beth Clarke, Program  Specialist

Amy  Sernyak, Lead  AnaZyst
 Brian Ritchie,  Technical  Suppoti  Staff

Linda M. Ragone,  Program  AnaZyst
 Barbara Tedesco,  Statistician

Cynthia Hansford,  Program  Assistant
 Linda Moscoe,  Technical  SuppoH  Staff

Karen Folk, Intern

Ethan Shaw, Intern

Patti Loyack,  Intern

Office  of Audit  Services

David  J. Graf, Advanced  Techniques
 Sta&,  Philadelphia 
Lourdes  Puntonet, Auditor,  Atlanta
 EXECUTIVE  SUMMARY 
PURPOSE 
This report  identifies questionable  practices  relating to nebulizer  drug therapy 
provided  to Medicare  beneficiaries  under Part B of the Medicare  program. 
BACKGROUND 
A nebulizer  is a type of durable medical  equipment  (DME)  through which 
prescription  inhalation drugs are administered.  Nebulizers  andassociated  drugs are 
covered  by Medicare  if the patients  ability to breathe  is severely impaired. 
Medicare  allowances  for nebulizer  drugs remained  relatively stable during the years 
1990 through  1992, never exceeding  about  $78 million annually.  In 1993, allowances 
increased  to about  $169 million and rose  to about  $226 million in 1994, an increase  of 
almost 200 percent  from  1990.  Albuterol  sulfate 0.083%  is the most commonly 
reimbursed  nebulizer  drug code.  This drug accounted  for $150 million, or more  than 
65 percent,  of the total dollars allowed  for all nebulizer  drugs in 1994.  While 
Medicare  payments for nebulizer  drugs have increased  in recent years, payments for 
nebulizer  equipment  have actually decreased.  Allowances  for nebulizer  equipment 
dropped  from  $131 million in 1993 to $40 million in 1994.  This maybe  due in part to 
Medicares  capped  rental policy for certain types of nebulizer  equipment. 
To  review Medicare  payments for nebulizers  and associated  drugs, we utilized a 
random  sample  of nebulizer  claims focusing  on albuterol  sulfate 0.083%.  We  also 
analyzed data from  the Health  Care Financing Administrations  (HCFA)  National 
Claims History File.  We  sought to determine  1) if Medicare  reimbursed  nebulizer 
equipment  when a beneficiary  had no corresponding  nebulizer  drug claims, and 2) if 
beneficiaries  were  receiving more  than one type of nebulizer  drug at the same time. 
FINDINGS 
Medicare  paid for multiple inhalation drugs that when used together  may be harmful 
to beneficiaries. 
Medicare  paid  $8 million  for  multiple  beta -adrene~c  bronchodilator  drugs  that 
should  almost  never  be taken  during  the same  time period. 
Medicare  paid  an  additional  $22  million  for  drugs  that  may  be inappropriate  when 
taken  together. 
One  of HCFA  k four  Durable  Medical  Equipment  Regional  Camers (DMERCS) 
accounted  for  a dkpropotionate  share  of multiple  nebulizer  drug allowances.  Other  questionable  drug provision  practices  may compromise  beneficiaries  care. 
Medicare  beneficiaries  received  units  of albuterol  sulfate  that  diflered  from 
amounts  prescribed  by their physicians. 
Prescribed  dosage  levels for  some  beneficiaries  exceed  medical  guidelines. 
Beneficiaries  do  not  use  all of the  nebulizer  drugs provided  to them. 
Questionablebilling practices  contribute  to improper  Medicare  payments for nebulizer 
therapy. 
Medicare  allowed  over  $10  million  for  nebulizer  equipment  without  corresponding 
billings for  nebulizer  drugs. 
Suppliers  billed  Medicare  for  drug dispensing  services  thqy did  not perform. 
Some  suppliers  did  not  collect  beneficia~  coinsurance  payments. 
RECOMMENDATIONS 
We  recommend  that HCFA  develop  a strategy to  1) eliminate the questionable  and 
abusive billings we encountered  in this inspection,  and 2) ensure that beneficiaries 
requiring nebulizer  therapy receive  treatments that are appropriate. 
As part of this strategy, we urge HCFA  to implement  a comprehensive  coverage  and 
medical  review policy focusing  on nebulizer  equipment  and inhalation drugs.  In 
concert  with these policies,  the DMERCS  should develop  and issue guidelines to 
suppliers and pharmacies  outlining recommended  prescribing practices  for inhalation 
drugs used with nebulizer  equipment.  To  ensure compliance  with the recent Medicare 
policy revision prohibiting  drug payments to non-dispensing  suppliers, the HCFA 
should take action to confirm  that only appropriately  licensed  suppliers be  permitted 
to dispense  drugs, bill for dispensing fees,  and physically handle drug products.  In 
addition,  the DMERCS  could  also provide  suppliers with a reminder  about  Medicare 
regulations prohibiting the routine waiver of beneficiary  coinsurance. 
If the recommendations  we just outlined had been  in place  during the time period  of 
our review, Medicare  could have saved up to $40 million in payments for questionable 
nebulizer  equipment  and drugs.  Although  this $40 million is an estimate, we believe  it 
is credible  since a more  rigorous review of inhalation drug claims by one DMERC 
resulted in savings of nearly $20 million during only a 5 month period.  The  savings 
occurred  after DMERC  C implemented  a review screen for claims involving both 
incompatible  multiple inhalation drugs and overutilization.  The  DMERC  took  the 
initiative to implement  this screen when concerns  about  Medicare  payments for 
inhalation drugs in this region were raised by HCFA  and the OIG  after reviewing data 
compiled  by the Statistical Analysis Durable  Medical  Equipment  Regional  Carrier.  We  will refer possible  abusive or fraudulent claims we encountered  during our review

to the fraud units responsible  for handling such activities.  In addition, we are planning

a multi-disciplinary review, including evaluation and investigation staff, to determine

the magnitude  of inappropriate  multiple nebulizer  drug use as well as the

identification  of suppliers employing  fraudulent or abusive practices  in their Medicare

billings.

AGENCY  COMMENTS

The  HCFA  concurred  with our recommendations.  They have already taken steps to

institute corrective  actions, including revising their policies  relating to nebulizer

equipment  and drugs which will take effect  in April  1997.  The revised guidelines

contain more  stringent requirements  and are aimed  at curtailing improper  billings such

as overutilization  and billing for nebulizer  equipment  without corresponding  billings

for nebulizer  drugs.  To  ensure that beneficiaries  receive  appropriate  nebulizer

therapy treatments, HCFA  has clarified its guidelines to require that only licensed

entities meeting  pharmacy  standards established by State Boards  of Pharmacy be

allowed  to dispense  and bill for nebulizer  drugs.  This change, according  to HCF~

will prevent  such abusive practices  as supplying incompatible  multiple drugs and

excessive dosages  of drugs.  The  full text of HCFAS  comments  may be  found  in

Appendix  B.

... 
111  TABLE  OF  CONTENTS

PAGE

EXECUTIVE  SUMMARY  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..i

INTRODUCIION  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...1

FINDINGS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...6


Medicare  paid for multiple drugs that maybe  harmful.  . . . . . . . . . . . . . . . . . . . 6

.  Other  drug provision  practices  compromise  care  . . . . . . . . . . . . . . . . . . . . . . . .  8

.  Questionable  billing practices lead to inappropriate  payments  . . . . . . . . . . . . . .  9

RECOMMENDATIONS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...12

APPENDIXA  Point Estimates and Confidence  Intervals  . . . . . . . . . . . . . . . . .  A-1

APPENDIX  B:  HCFA  Comments  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..  B-l
 INTRODUCTION

PURPOSE 
This report  identifies questionable  practices  relating to nebulizer  drug therapy 
provided  to Medicare  beneficiaries  under Part B of the Medicare  program. 
BACKGROUND 
Title XVIII  of the Social Security Act  prescribes  coverage  requirements  under Part B 
of the Medicare  program.  Part B covered  items and services include durable medical 
equipment  (DME)  as well as certain outpatient prescription  drugs.  The Health  Care 
Financing Administration  (HCFA)  administers the Medicare  program.  The HCFA 
designated  four Durable  Medical  Equipment  Regional  Carriers (DMERCS)  to process 
all claims for DME,  prosthetics,  orthotics,  and medical  supplies, including nebulizers 
and inhalation drugs.  Effective  October  1, 1993, the DMERCS  replaced  local  carriers 
which had previously processed  these claims. 
MedicareCoverageof NebukzerTherapy 
A nebulizer  is a type of DME  through which prescription  inhalation drugs are 
administered.  It consists essentially of two components:  1) a power  source  such as an 
air compressor  or ultrasonic device,  and 2) a dispensing mechanism  consisting of 
flexible tubing, a mouthpiece,  and liquid reservoir.  Nebulizer  drug therapy is 
administered  by placing a prescription  inhalation drug into the reservoir of a nebulizer. 
The nebulizers  power  source  converts the drug into a fine spray which is inhaled by 
the patient. 
The  Medicare  Coverage  Issues Manual  states that nebulizers  are covered  if the 
patients  ability to breathe  is severely impaired.  While Medicare  does  not generally 
pay for outpatient  prescription  drugs, drugs used in conjunction  with a nebulizer  are 
covered  under the program.  Section  2100.5 of the Medicare  Carriers Manual  specifies 
the covered  uses of outpatient  prescription  drugs including drugs used in conjunction 
with DME.  In accordance  with HCFA  policy, if a beneficiary  has a severe respiratory 
illness or disease, Medicare  will pay for any drug that transforms a nebulizer  into 
effective  therapy for that condition.  Medicare  guidelines stipulate that the prescribed 
drug must be  used to deliver respiratory therapy, and the nebulizer  must be  the means 
to deliver that therapy.  If these conditions  are met, Medicare  will reimburse  both  the 
drug and the equipment  for as long as the nebulizer  drug therapy is necessary. 
In 1994, the DMERCS  proposed  a new nebulizer  medical  policy which focused  on 
specific  coverage  and medical  necessity issues.  The proposed  policy  outlined baseline 
documentation  requirements  to support Medicare  coverage  criteria for nebulizer 
therapy.  In addition, the policy required  trial use of a metered  dose  inhaler (MDI),  a 
non-covered  device under Medicare,  before  nebulizer  treatment would  be reimbursed.  The  HCFA  withdrew the policy proposal  in response  to concerns  voiced  by 
organizations  and physicians.  Primarily, these concerns  centered  on the possible 
deterioration  of a patients  condition  during the MDI  trial period  to the point where 
an emergency  room  visit or hospitalization  might be  required. 
MedicareAllowancesfor Nebuluer Therapy 
Between  1991 and 1993, allowances  for nebulizer  equipment  increased  from  $87 
million to $131 million.  However,  in 1994 there was a sharp reduction  in Medicare 
allowances  to $40 million.  The  decline was due in large part to an almost $100 million 
decrease  between  1993 and 1994 for nebulizers with compressors  (HCFA  Capped 
Rental  Code  E0570).  However,  in contrast, allowances  for portable  nebulizers  (Code 
E1375)  increased  more  than 700 percent  from  $389,047  in 1993 to more  than $3 
million in 1994.  Portable  nebulizers  are not capped  rental items.  Medicare  will pay 
for only 15 months of rental for capped  rental items if beneficiaries  choose  not to 
purchase  these items. 
While  payments for nebulizer  equipment  have diminished in recent years, payments 
for drugs used with nebulizers have increased.  Medicare  allowances  remained 
relatively stable during the years 1990 through  1992, never exceeding  about  $78 million 
annually.1  In 1993, allowances  for 21 nebulizer  drug codes  increased  to about  $169 
million and rose to about  $226 million in 1994, an increase  of almost 200 percent  from 
1990.  Albuterol  sulfate 0.083%  (Code  J7620), hereafter  simply referred  to as 
albuterol  sulfate, is the most commonly  reimbursed  nebulizer  drug code.  This drug 
accounted  for $150 million, or more  than 65 percent,  of the total dollars allowed  for 
all nebulizer  drugs in 1994. 
Pharmacies  or DME  suppliers use drug-specific  procedure  codes  to claim Medicare 
reimbursement  for nebulizer  drugs.  Each DMERC  determines  allowances  for 
prescription  drug codes  in its respective  region based  on the guidelines stated in 
HCFA  regulations.  In addition  to reimbursing for the drug product,  Medicare  will 
also pay a monthly dispensing fee  of $5 when pharmacies  provide  drugs used in 
nebulizers. 
Related Work by the (ljjice of IhspectorGeneral 
This report  is one  of a series of Office  of Inspector  General  (OIG)  inspections 
concerning  Medicare  payments for outpatient  prescription  drugs in general  and 
inhalation drugs in particular.  In 1996, we released  a report  entitled, Medicare 
Payments  for  Nebulizer  Drugs  (OEI-03-94-O0390).  We  found  that Medicaid  reimbursed 
albuterol  sulfate and other nebulizer  drugs at significantly lower prices than Medicare. 
10 ffice  of Inspector  General, Medicare  Part  B  - Reimbumement  to Rrovidem  for 
Drugs  Used  in  Conjunction  with  Durable  Medical  Equipment,  A-06-92-OO079 
(Washington,  D. C.: U.S. Department  of Health  and Human  Services,  1995),3. 
2  In a companion  report  called A  Comparison  of Albuterol  Su~ate  Prices  (OEI-03-94-
00392),  we  found  that many retail and mail-order  pharmacies  charge customers  less 
for generic  albuterol  sulfate than Medicares  allowed  price.  A previously issued 
report,  Suppliers  Acquisition  Costs for Albuterol  Sulfate  (OE1-03-94-O0393),  examines 
how much suppliers pay for albuterol  sulfate.  An  additional  report, Appropriateness  of 
Medicare  Prescription  Drug Allowances  (OEI-03-95-O0420),  compared  Medicare  drug 
reimbursement  mechanisms with Medicaid  payment mechanisms  for  17 drugs and 
found  that Medicare  could  achieve  significant savings by adopting  reimbursement 
strategies similar to those used by Medicaid. 
The  HCFA,  in response  to these inspections,  concurred  with our recommendation  that 
it reexamine  its drug reimbursement  methodologies.  The HCFA  agreed  to explore 
new reimbursement  mechanisms  to take into account  actual drug costs and reduce 
Medicare  payments. 
O~ration Restore lhmt 
This study was conducted  as part of Operation  Restore  Trust, an initiative combining 
the forces  of multiple agencies  to combat  Medicare  and Medicaid  fraud, waste, and 
abuse in five States.  The  five States   California, Florida,  Illinois, New York,  and 
Texas   account  for 40 percent  of the nations Medicare  and Medicaid  beneficiaries. 
The initiative centers on services provided  by DME  suppliers in addition  to nursing 
homes,  hospices,  and home  health agencies. 
METHODOLOGY 
We  reviewed  pertinent background  information  on nebulizer  therapy from  a wide 
variety of sources including HCFA  officials, medical  equipment  suppliers, 
pharmaceutical  reference  books,  and pharmacies.  In addition, we consulted with the 
DMERCS  medical  and utilization review staffs regarding nebulizer  and inhalation 
drug therapy coverage,  medical  necessity, and other technical issues such as acceptable 
supplier documentation  and pharmaceutical  practices.  We  received  information  and 
reports  from  the Statistical Analysis Durable  Medical  Equipment  Regional  Carrier 
(SADMERC).  For  guidance  on recommended  inhalation drug dosage  and 
administration practices, we used the USP Drug  Information  for  the Health  Care 
Professional,  the Physicians  Desk  Reference,  and the product  information  provided  in 
the package  insert for one brand  of albuterol  sulfate. 
We  requested  information  from  two main sources  suppliers and beneficiaries.  We 
selected  the suppliers and beneficiaries  based  on a sample of claims from  a One 
Percent  DME  Claims File developed  from  HCFAS  National  Claims History File. 
Focusing  on albuterol  sulfate, the nebulizer  drug most frequently reimbursed  under 
Medicare,  we selected  a stratified random  sample  of albuterol  sulfate claims from  the 
file.  Seven strata were  designated  in the sampling plan:  one for each of the five 
Operation  Restore  Trust States, Puerto  Rico,  and a strata comprised  of J7620 claims 
from  all other States.  Service dates were  confined  to a 14-month period  of review, 
.)  January 1, 1994 through February 28, 1995.  Medicare  allowances  foralbuterol  sulfate 
exceeded  $182 million during the 14-month period  of our review, representing  68 
percent  of the $269 million in total allowances  for nebulizer  drugs.  Our sample  of 485 
claims is statistically representative  of the universe of over one million claims for 
albuterol  sulfate which Medicare  processed  during the period  of our review. 
SupplierInfortnutionRequests 
We  mailed requests for information  to the suppliers that billed Medicare  for the 485 
sample  albuterol  sulfate claims.  In this report, we use the term supplier to indicate 
the entity which billed  Medicare  for the nebulizer  drug provided  to the beneficiary. 
These  requests covered  a variety of subjects, including 1) supplier business 
characteristics, 2) how the supplier obtained  the nebulizer  drug and delivered  it to the 
beneficiary,  3) description  of the drug provided,  and 4) drug procurement  costs and 
related  drug costs.  We  asked suppliers to submit copies  of documents  from  their files, 
such as physician prescriptions,  invoices  showing drug procurement  costs, and 
beneficiary  medical  information,  to support  each sample J7620 claim. 
Suppliers returned completed  requests for 418 of the 485 sample J7620 claims (86 
percent  response  rate).  Some  suppliers did not, however,  submit copies  of all of the 
claim-supporting  documentation  that we requested.  We  contacted  these suppliers by 
telephone  and letter to secure missing documentation. 
BeneficiaryInformationRequeim 
We  mailed information  requests to the Medicare  beneficiaries  identified in the sample 
claims.  We  did not send information  requests to deceased  beneficiaries  if we knew 
they were  deceased  at the time of the mailing.  Questions  related to five broad  areas: 
1) nebulizer  and inhalation drug utilization patterns, 2) health condition,  3) nebulizer 
and inhalation drug characteristics, 4) ordering  and receipt  of inhalation drug, and 5) 
efficacy  of nebulizer  and inhalation drug. 
Two  hundred  and twenty-three beneficiaries  or their relatives returned  completed 
information  requests.  These  responses  account  for 307 sample  albuterol  sulfate claims 
because  the sample  contains more  than one  claim for some  beneficiaries. 
We  analyzed supplier and beneficiary  responses  to the information  requests.  To 
detect inconsistencies  and irregular practices  in the provision  of albuterol  sulfate we 
compared  supplier and beneficiary  responses  to related questions.  We  examined 
suppliers  documentation  to identify possible  questionable  billing practices  and 
inappropriate  albuterol  sulfate utilization.  Percentage  estimates and corresponding  95 
percent  confidence  intervals for the supplier and beneficiary  data were  computed 
using standard statistical formulas for a single-stage stratified random  sample.  Point 
estimates and confidence  intervals for all statistics presented  in this report  are 
provided  in Appendix  A. 
4
 Nebuli.zerDrugReview 
We  performed  two separate  analyses of data from  the One  Percent  DME  Claims File.

We  sought to determine  1) if Medicare  had reimbursed  nebulizer  equipment  when a

beneficiary  had no corresponding  nebulizer  drug claims, and 2) if Medicare  had made

payments for more  than one beta-adrenergic  bronchodilator  drug at the same time.

To  identify beneficiaries  who had nebulizer  equipment  claims without nebulizer  drug

claims, we matched  nebulizer  equipment  claims for the 14-month period  (January 1,

1994- February 28, 1995) with nebulizer  drug claims.  Because  of possible  lags in

billing, we believed  it would be  more  conservative  to identify only those beneficiaries

who  had no matching nebulizer  equipment  and drug claims in the middle  8 months

(April  1- November  30, 1994) of our review period.  In addition,  to ensure that

corresponding  drug claims for these beneficiaries  were not billed before  or after the 8-

month period,  we searched  the One  Percent  DME  Claims File for drug claims billed

during the 3 months prior to April  1, 1994 and the 7 months after November  30, 1994.

No  such claims were  located.

We  also verified  our findings with the DMERCS  which reviewed  the on-line  Part B

service histories for a random  sample  of  100 of the 1,234 beneficiaries  who  had

nebulizer  equipment  billings without corresponding  nebulizer  drug billings.  The

medical  directors  confirmed  that the beneficiaries  had no history of nebulizer  drug

billings during the period  of our review.  They did find drug billings for 5

beneficiaries  in late 1995 and early 1996, which were  subsequent  to our review period.

Medicare  reimburses  four  categories  of nebulizer  drugs:  bronchodilators,  anti-

inflammatories,  mucolytics,  and antibiotics.  Within the bronchodilator  category,  there

are two types of drugs  beta-adrenergics  and anticholinergics.  For  our analysis of

beneficiaries  receiving more  than one  drug at a time, we focused  only on the beta

adrenergic  bronchodilator  type of nebulizer  drug.

To  determine  if Medicare  had made  payments for more  than one beta-adrenergic

bronchodilator  drug at the same time, we used the data from  the DME  Claims File

for our  14-month review period.  We  selected  12 drug codes  that represent

bronchodilator  drugs with beta-adrenergic  stimulator  effects.  Using these codes,  we

determined  if two or more  beta-adrenergic  drugs were billed for a beneficiary  in the

same 30-day period.  We  then calculated  the total payment for these multiple

nebulizer  drugs.

We  did a separate  analysis where we matched  the 12 beta-adrenergic  drug codes

against drug code  J7699 which represents  not otherwise  classified inhalation drugs.

Code  J7699 can be used to bill for at least one  type of beta-adrenergic  bronchodilator

drug which does  not yet have a specific  code.  We  then determined  the total Medicare

payment  for these matches.

This inspection  was conducted  in accordance  with the Qzdi~  Standards  for  Inspections

issued by the Presidents  Council  on Integrity and Efficiency.

J  FINDINGS

MEDICARE  PAID  FOR  MULTIPLE  INHALATION  DRUGS  THAT  WHEN 
USED  TOGETHER  MAY  BE HARMFUL  TO  BENEFICIARIES. 
Medicarepaid $8 mililonfor multiplebeta-adrenagicbronchodilktordugs thatshod 
almostneverbe takenduringthesametimeperiod 
Medicare  made  payments for two or more  beta-adrenergic  bronchodilator  drugs for at 
least a 30-day period  between  January 1, 1994 through February  1995 for more  than 
10,000 beneficiaries.  Medicare  and its beneficiaries  paid almost $8 million dollars for 
these drugs during this time.  Beta-adrenergic  bronchodilator  drugs open  up or dilate 
the lungs airways by relaxing the bronchial  smooth  muscle.  Using two beta-adrenergic 
drugs during the same time period  is not only ineffective  but can be  potentially 
harmful to the beneficiary. 
A majority of these beneficiaries  received  albuterol  sulfate along with another 
beta-adrenergic  bronchodilator  drug, such as metaproterenol  sulfate or isoetharine 
hydrochloride.  The  product  information  provided  in the package  insert for one brand 
of albuterol  sulfate states that other sympathomimetic  aerosol  bronchodilators  or 
epinephrine  should not be used concomitantly  with albuterol.  According  to DMERC 
medical  personnel,  beta-adrenergic  bronchodilator  drugs such as albuterol  sulfate, 
metaproterenol  sulfate, and isoetharine  hydrochloride,  when used in combination, 
provide  no further clinical improvement  beyond  that obtained  through the use of only 
one  nebulizer  drug in this category. 
While  these drug combinations  provide  no increased  benefit,  they can be  harmful to 
the respiratory, heart, and nervous systems.  Use  of multiple beta-adrenergic  drugs can 
effectively be  considered  an overdosage.  Overutilization  can lead to a loss of 
sensitivity to the drugs.  This can eventually result in unresponsive  asthma since 
breathing  can no longer be  improved  with nebulizer  drug therapy.  In addition, 
overdosage  can lead to irregular heart beat,  anginal pain, hypertension,  tremulousness, 
and other adverse reactions.  It can even be potentially fatal, especially in a 
health-compromised  elderly beneficiary. 
Medicarepad  an additional$22 millwnfor drugsthatmuy be inappropriatwehentaken 
together. 
Along  with the almost $8 million paid for multiple beta-adrenergic  bronchodilator 
drugs, another  $22 million was spent by Medicare  on multiple inhalation drugs for 
which the level of effectiveness  or harmfulness cannot be  determined.  The 
beneficiaries  for whom  Medicare  paid these bills received  multiple inhalation drugs 
including one beta-adrenergic  drug and one  drug that cannot be identified  since it was 
billed using code  J7699.  Code  J7699 represents  not otherwise  classified inhalation 
drugs.  Drugs billed with this code  either have no procedure  code  or are prescribed  in 
6  amounts that do not fit the dosage  of current codes.  These  drugs can be 
bronchodilators  or other types of inhalation drugs. 
When  billing information  for code  J7699 was matched  against other beta-adrenergic 
bronchodilator  drug codes,  22,500 beneficiaries  were found  to have received  multiple 
inhalation drugs.  If the drugs billed to Medicare  under code  J7699 were beta
adrenergic  drugs, then these beneficiaries  may have received  drugs that were 
inappropriate  if used during the same time frame. 
While  it is possible  that a beneficiary  may receive  multiple inhalation drugs during a 
single 30-day period  if their doctor  makes a prescription  change, multiple beta
adrenergic  drug claims for individual beneficiaries  over successive months provide 
evidence  that makes this an improbable  explanation  for such widespread  multiple drug 
use.  When  individual beneficiary  nebulizer  drug usage was reviewed, we found 
instances where multiple inhalation drugs were used over a number  of months.  We 
also found  claims for some beneficiaries  for not just two beta-adrenergic 
bronchodilator  drugs, but up to four different inhalation drugs during the same time 
period.  To  illustrate this point, Medicare  paid over $13,000 for one beneficiary  who 
received  four inhalation drugs over a 9-month period.  Three  of the drugs were beta
adrenergics  and the fourth drug could not be  identified  since it was billed  using code 
J7699. 
One DMERC  accountedfor a dkprophoraate shareof multiplknebzdizerdrug 
allowances. 
The  DMERC  for Region  C paid over $20 million of the $30 million in questionable

multiple nebulizer  drug payments.  While only 27 percent  of the Medicare  population

resides in the area serviced by DMERC  C, the region  accounted  for 60 percent  of the

beneficiaries  that received  multiple nebulizer  drugs.  The  carrier paid an average of

$1133.00 for each beneficiary  receiving multiple nebulizer  drugs during the 14-month

review period.  This was 30 percent  more  than the average dollars paid by the

DMERC  with the next highest average allowance  per beneficiary.

The  Region  C DMERC  not only has an unusually large share of multiple drug

payments but also accounts  for 60 percent  of total allowances  for nebulizer  drugs

during the 14-month review period.  For five specific  nebulizer  drugs, DMERC  C

made  100 percent  of the Medicare  payments over the  14 months.

Region  Cs large share of payments appears  to have continued  into  1995.  According

to a SADMERC  statistical report  for the third-quarter of  1995, DMERC  C accounts

for 67 percent  of the quarters total national allowances  of $88 million for nebulizer

drugs.  The  report  also provided  evidence  that while DMERC  C has hundreds,

sometimes  thousands,  of beneficiaries  using certain drugs, other regions have less than

10 beneficiaries  using the same drugs.  Similar to what was found  during the 14-month

review period,  DMERC  C allowed  85 percent  of the national

payments for bitolterol;  93 percent  for acetylcystein; 95 percent  for metaproterenol;
 99percent  forisoetharine;  and 100percent  forisoproterenol  inthethird-quarterof 
1995. 
OTHER  QUESTIONABLE  DRUG  PROVISION  PRACTICES  MAY 
COMPROMISE  BENEFICIARIES  CARE. 
Questionable  practices  involving the provision  of albuterol  sulfate therapy may 
compromise  the quality of care received  by Medicare  beneficiaries.  We  are 
highlighting these practices  because  they could  adversely affect  the benefits  of 
nebulizer  therapy intended  for Medicare  beneficiaries. 
Medicarebeneficiariesreceivedunitsof albuterolsulfatethatd~ered @m  arnoum 
prescribedby theirphysicians. 
Twenty-six percent  of claims represents billings for units of albuterol  sulfate that 
differed  from  the units prescribed  by beneficiaries  physicians.  Thirteen  percent 
reflects  allowed  units of albuterol  sulfate that exceed  prescribed  units by between  9 
and 819 milliliters (ml).  The  other thirteen percent  of claims represents  allowed  units 
that were between  15 ml and 495 ml less than prescribed  units. 
Allowed  units could  not be  compared  to prescribed  units of albuterol  sulfate for 36 
percent  of claims due to two factors:  PRN  prescriptions,  and billings processed  by 
pre-DMERC  carriers.  A number  of claims were  supported  with prescription 
documents  that included  a PRN,  or as needed,  direction.  The  PRN  direction 
does  not indicate  a fixed amount  of albuterol  sulfate to be  dispensed.  In addition, 
albuterol  sulfate claims were being billed  to the pre-DMERC  carriers as well as the 
four new DMERC  carriers during the period  of our review.  Billing standards for 
albuterol  sulfate were not uniform  across the pre-DMERC  carriers; therefore, 
suppliers were  not consistently billing for units equal to the ml of albuterol  sulfate 
dispensed. 
l%zwribed &sage levehfor some beneficiati  exceedmedicalguidelines. 
Approximately  13 percent  of claims had physicians orders prescribing  5 or 6 albuterol 
sulfate treatments per day (more  than 450 ml per month).  Physicians orders for more 
than two-thirds of these claims prescribed  monthly albuterol  sulfate treatments of 540 
or more  mls.  The product  information  provided  by the manufacturer  of one brand  of 
albuterol  sulfate advises a nebulizer  dosage  of 3 ml of albuterol  sulfate three to four 
times per day.  A  one  month prescription  for albuterol  sulfate at a dosage  of 3 ml 
administered  three or four times per day would  result in 270 to 360 ml of the drug 
being  dispensed.  More  frequent  administration or higher doses  are not 
recommended,  according  to guidelines issued by manufacturers. 
Drug labeling information,  provided  by manufacturers  and approved  by the Food  and 
Drug Administration,  presents clear and unmistakable warnings about  the dangers of 
overdosage.  The  package  insert for albuterol  sulfate cautions against the overuse  of 
8  albuterol  sulfate and lists a number  of life-threatening  conditions  that could  result 
from  overdosage,  including cardiovascular  and central nervous system reactions. 
Although  the drug labeling information  for albuterol  sulfate currently cautions against 
exceeding  the recommended  dosage,  there are conceivable  occasions  when  a physician 
might escalate the dose  for a patient depending  on the individuals needs.  However, 
physicians would  not normally start a patient on such a high dosage  scale, nor is it a 
common  dosage  regimen.  Although  these high dosages  are not inconceivable,  one  out 
of every seven albuterol  sulfate claims reviewed were based  on prescriptions  exceeding 
recommended  dosages.  This number  of beneficiary  claims for such an uncommonly 
high dosage  seems questionable. 
Nineteen  percent  of claims were  supported  with prescription  documents  that included 
a PRN  direction,  Therefore,  as discussed above,  we could  not determine  the exact 
number  of albuterol  sulfate units prescribed  for comparison  with the dosage 
recommended  by manufacturers.  Depending  on the actual dosage  the physician 
intended  to prescribe  using the PRN  direction,  our analysis may have underestimated 
the percentage  of claims with prescriptions  for six albuterol  sulfate treatments per day. 
Bene&a&?s do not we all of the nebulizerdrugsprovidedto them 
For  twenty-four percent  of albuterol  sulfate claims, beneficiaries  reported  that they did 
not use all of the nebulizer  medication  provided  to them each month.  Almost  33 
percent  of these claims involved beneficiaries  who  only used half of their nebulizer 
medicine  each month;  another  44 percent  of these claims represented  beneficiaries 
who used three-quarters  of their dosages.  For  almost half (45 percent)  the claims 
where  non-use  of medication  was found,  beneficiaries  reported  discarding the unused 
supply each month. 
While  one  could  argue that beneficiaries  were not using all of their nebulizer 
medication  due to non-compliance,  when this non-use  is viewed in the context of this 
reports  previous  findings, other explanations  seem more  credible.  Possible 
explanations include:  1) the lack of medical  need  or clinical effectiveness  for the 
number  and/or  dosages  of drugs prescribed,  and 2) the oversupply  of drug products. 
QUESTIONABLE  BILLING  PRACTICES  CONTRIBUTE  TO  IMPROPER 
MEDICARE  PAYMENTS  FOR  NEBULIZER  THERAPY. 
Medicareallowedover $10 millionfor nebulizerequtpnumtwithoutcorrespondingbillings 
for nebulizerdrugs. 
Medicare  allowed  over $10 million for nebulizers without corresponding  billings for 
nebulizer  drugs during the 8-month period,  April  1, 1994 to November  30, 1994.  This 
$10 million represents  almost 40 percent  of the $26 million that Medicare  paid for 
nebulizer  equipment  during the 8 months.  Two  types of nebulizer  equipment 
9
 accounted  for 89 percent  of the $10 million in improper  Medicare  allowances: 
nebulizer  with compressor  (code  E0570)  and ultrasonic nebulizer  (code  E0575). 
According  to Medicare  DME  coverage  guidelines, nebulizers  are reimbursable  only 
when beneficiaries  with severely impaired  breathing use the nebulizers with albuterol 
sulfate or other inhalation drugs.  If inhalation drugs are not being used with 
nebulizers,  then the nebulizers  should not be  paid for by the Medicare  program. 
More  than one-third  of beneficiaries  (123,400  of 357,000)  had billings for nebulizer 
equipment  without corresponding  billings for nebulizer  drugs.  For  16 percent  of 
beneficiaries,  Medicare  paid for 8 months of equipment  billings with no corresponding 
claims for nebulizer  drugs.  About  half of the beneficiaries  had equipment  payments 
for  1 or 2 months without corresponding  drug claims.  The remaining beneficiaries  had 
between  3 and 7 months of claims for nebulizer  equipment  with no corresponding 
drug billings. 
SupplienbilkdMedicarefor drugdispensingservicestheydidrwtperforrm 
Thirty-six percent  of claims for albuterol  sulfate involved Medicare  payments to

suppliers who  did not dispense  the drugs to beneficiaries.  Instead, these suppliers had

arrangements with pharmacies  who  actually dispensed  the drugs to beneficiaries.  For

25 percent  of albuterol  sulfate claims, suppliers without licensed  pharmacy

components  billed Medicare  not only for the drug but also for  the  $5.00 dispensing  fee

even though they did not dispense  the drug to beneficiaries.

Medicare  paid an estimated  $1.5 million for improper  dispensing fee  billings between

January 1, 1994 and February 28, 1995.  This represents  one-third  of the total

estimated  $4.7 million in albuterol  sulfate dispensing fees paid for by Medicare  during

the review period.

The  payment  of both  drug allowances  and dispensing fees to suppliers who  do not

actually provide  drugs to beneficiaries  conflicts with HCFAS  written policy  and

guidelines.  Medicare  Carriers Manual  section  3060 states that the carrier may pay

assigned benefits  only to the physician or other supplier who  furnished the service.

When  the policy  to pay dispensing fees was introduced,  a December  1993 HCFA

memorandum  to Medicare  administrators and carriers stated that a monthly

dispensing fee  for each inhalation drug would  be paid  ...where pharmacies  provide

drugs used in nebulizers.

Recent  revisions to section  3060 of the Medicare  Carriers Manual,  as outlined in a

HCFA  Bureau of Policy Development  memorandum  dated July 30, 1996, will prohibit

drug and dispensing fee  payments to suppliers who  do not actually provide  drugs

10  directly to beneficiaries.  The  memorandum  explains that the following  language will 
be  included  in section  3060.D  of the manual: 
In the  case of drugs used in conjunction  with durable  medical  equipment 
(DME)  or prosthetic  devices, the  entity  that  dispenses  the  drug must  furnish  it 
directly  to the  patient  for whom  a prescription  is written.  Therefore,  those 
drugs cannot  be purchased  for resale  to the  beneficiary  by any supplier  that  is 
not  the  entity  which dispenses  the  drug.  Such  a supplier  may only bill for the 
DME  or prosthetic  devices.  In order  for prescription  drugs that  are used  in 
conjunction  with DME  or prosthetic  devices to be covered  by Medicare,  the 
entity  that  dispenses  the  drugs must have  a Medicare  supplier  number,  must be 
licensed  to dispense  the  drug in the  State  in which the  drug is dispensed,  and 
must bill and receive  payment  in its own name. 
This policy revision should prevent millions of dollars in payments to non-dispensing 
suppliers that Medicare  has been  allowing up to this point. 
Some suppliersdid not collectbeneficimycoirmmancepayments. 
For  11 percent  of the albuterol  sulfate claims billed to Medicare,  beneficiaries

reported  they did not pay the 20 percent  coinsurance  for their nebulizer  medications.

These  beneficiaries  also reported  that they did not have some  other form  of health

insurance that would  cover  the coinsurance  payments.  Since beneficiaries  are required

to pay (unless there is financial hardship)  20 percent  of the Medicare  allowed  amount

for services, suppliers who routinely waive this payment  are not following  Medicare

regulations regarding beneficiary  coinsurance.

Routine  waiver of the coinsurance  amount may constitute a violation  of the Medicare

and Medicaid  Anti-Kickback  provision  (42 U.S.C.  1320a-7b(b)),  if the purpose  of the

routine waiver is to induce Medicare  or Medicaid  business.  A providers  routine

waiver of a beneficiarys  obligation  to pay may also result in the filing of a Medicare

or Medicaid  claim that is considered  false because  it misrepresents  the actual amount

charged for the item or service.  Anti-kickback  violations  and false claims can be

actionable  under criminal, civil, and administrative authorities.

11
 RECOMMENDATIONS

We  recommend  that HCFA  develop  a strategy to  1) eliminate the questionable  and 
abusive billings we encountered  in this inspection,  and 2) ensure that beneficiaries 
requiring nebulizer  therapy receive  treatments that are appropriate. 
As part of this strategy, we urge HCFA  to implement  a comprehensive  coverage  and 
medical  review policy focusing  on nebulizer  equipment  and inhalation drugs.  In 
concert  with these policies,  the DMERCS  should develop  and issue guidelines to 
suppliers and pharmacies  outlining recommended  prescribing practices  for inhalation 
drugs used with nebulizer  equipment.  To  ensure compliance  with the recent Medicare 
policy revision prohibiting  drug payments to non-dispensing  suppliers, the HCFA 
should take action to confirm  that only appropriately  licensed  suppliers be permitted 
to dispense  drugs, bill for dispensing fees,  and physically handle drug products.  In 
addition, the DMERCS  could  also provide  suppliers with a reminder  about Medicare 
regulations prohibiting the routine waiver of beneficiary  coinsurance. 
If the recommendations  we just outlined had been  in place  during the 14-month time 
period  of our review, Medicare  could  have saved up to $40 million in payments for 
questionable  nebulizer  equipment  and drugs.  Although  this $40 million is an estimate, 
we believe  it is credible  since a more  rigorous review of inhalation drug claims by just 
one DMERC  resulted in savings of nearly $20 million during only a 5-month  period. 
The  savings occurred  after DMERC  C implemented  a review screen for claims 
involving both  incompatible  multiple inhalation drugs and overutilization.  The 
DMERC  took  the initiative to implement  this screen when concerns  about Medicare 
payments for inhalation drugs in this region were raised by HCFA  and the OIG  after 
reviewing data compiled  by the Statistical Analysis Durable  Medical  Equipment 
Regional  Carrier. 
Many of the findings presented  pertain to abusive and possibly fraudulent practices. 
We  will refer these matters to the DMERC  fraud units responsible  for handling such 
activities.  In addition, we are planning a multi-disciplinary review, including evaluation 
and investigation staff, to determine  the magnitude  of inappropriate  multiple nebulizer 
drug use as well as the identification  of suppliers employing  fraudulent or abusive 
practices  in their Medicare  billings. 
AGENCY  COMMENTS 
The HCFA  concurred  with our recommendations.  They have already taken steps to 
institute corrective  actions, including revising their policies  relating to nebulizer 
equipment  and drugs which will take effect April  1997.  The revised guidelines contain 
more  stringent requirements  and are aimed at curtailing improper  billings such as 
overutilization  and billing for nebulizer  equipment  without corresponding  billings for 
nebulizer  drugs.  To  ensure that beneficiaries  receive  appropriate  nebulizer  therapy 
treatments, HCFA  has clarified its guidelines to require that only licensed  entities 
12  meeting  pharmacy  standards established by State Boards  of Pharmacy be  allowed  to 
dispense  and bill for nebulizer  drugs.  This change, according  to HCF~  will prevent 
such abusive practices  as supplying incompatible  multiple drugs and excessive dosages 
of drugs. 
13
 APPENDIX  A

POINT  ESTIMATES  AND  CONFIDENCE  INTERVALS 
The  tables below  contain  statistical estimates presented  in the Findings section  of this 
report.  Point estimates and corresponding  95 percent  confidence  intervals based  on 
beneficiary  and supplier data were  computed  using standard statistical formulas  for a 
single-stage stratified random  sample.  Those  based  on analyses of data from  the 
HCFA  One  Percent  DME  Claims File were  computed  using standard statistical 
formulas  for a simple random  sample. 
MEDICARE  PAID  FOR  MULTIPLE  INHALATION  DRUGS  THAT  WHEN 
USED  TOGETHER  MAY  BE HARMFUL  TO  BENEFICIARIES. 
M&care  paid $8 millwnfor multiplebeta-adre~c  bronchodilatordrugsthatshould 
not be takendurihgthe same timeperiod 
Point Estimate  957.  ConfidenceInterval 
I $7,707,533  I $6,975,119-$8,439,946 
M&care  pakianaddzlional$22 millwnfor drugsthatmaybe inapproptitewhentaken 
togethen 
IIPoint Estimate  I 95% ConfidenceInterval  II 
$22,416,942  $21,615,746-$23,218,138 
One  DMERC  accountedfor a dkproptinate  shareof multiplenebulizerdug 
allowances. 
1~1  ohtte 
95% CkmfideneeInterval 
II I
DMERC C share of allowances  $20,395,724  $19,129,240-$21,662,208 
,, I 
IITotal questionable payments  $30,124,480  $29,034,195-$31,214,765  I 
DMERC C pereent of beneficiaries  59.609o  54.0990- 65.12% 
A-1
 OTHER  QUESTIONABLE  DRUG  PROVISION  PRACIICES  MAY 
COMPROMISE  BENEFICIARIES  CARE. 
Medicarebenejiciati  receivedunitsof albuterolsulfatethatdi#kredfrom amounts 
prescribedby ttiphysicians. 
11  I 
~1  0-  I%-
Units differed from prescription  26.44%  18.28% -34.60% 
II  I 
Units exceeded prescription  13.27%0  6.72?Z0- 19.83% 
Units less than prescription  13.167.  7.00% - 19.33%0 
Relationship  undeterminable  ]]36.30%  I 28.16% -44.45% 
l%wribed dixagelevekfor some beneficiariesexceedmedicalguidelines. 
II I
Greater than or equal to 450 ml  13.47%  7.24(?Z-O19.70% 
,,  I 
IIGreater than or equal to 540 ml  9.38%  4.67% - 14.10%  I 
II 
I 
Prescribed frequency undeterminable  18.8070  11.85% -25.76% 
Bene&izries do not use all of the nebukzerdrugsprovidedto then 
1]Do not use all nebulizer drugs  II23.63%  ] 14.50% -32.75%  II 
II 
I]Use half of nebulizer medicine  II32.53%  I 9.85% -55.21% 
II II II 
Use three-quarters of drugs  43.77%  21.3392.-66.21% 
Discard unused drugs  45.35%  22.87% - 67.83% 
QUESTIONABLE  BILLING  PRACTICES  CONTRIBUTE  TO  IMPROPER 
MEDICARE  PAYMENTS  FOR  NEBULIZER  THERAPY. 
Medicareallbwedover $10 rnililonfor nebulizerequipmentwithoutcorrespondingbilliiqp 
for nebulizerdrugs. 
IIAllowances for equipment without drugs  1[$10,382,230  [ $10,031,740-$10,732,720  II 
Total equipment allowances  II$25,701,454  I $25,169,154-$26,233,753 
A-2
 Suppi%mbilledMedicarefor thugdhpensingservicestheydidnotperfom
Point Estimate  95% Cmfidenee Interval 
Suppliers did not dispense drugs  36.38%  28.01% - 44.74% 
Suppliers did not dispense drugs but billed  25.449Z0  17.5470-33.3370 
dispensing fees 
Medicare allowances for improper dispensing  $1,525,375  $1,051,899-$1,998,851 
fee billings 
Total Medicare allowances for albuterol  $4,688,024  $4,351,533-$5,024,514 
sulfate dispensing fees 
Some suppliersdid not collectbenejicimycoinsurancepayments. 
Point Estimate  95% Confidence Interviil  I 
I 
10.9470  4.05%  - 17.83% 
A-3
 ,+
S,*vw#, 
*.+  J~.f, 
*  DEPARTMENT  OF HEALTH  & HUMAN  SERVICES  Health  Care  Financing  Administration 
f 
5 
--
o 
+
~++> .,a  The  Adm!nlstrator
Washington,  D.C.  20201 
IV 
DATE:  FEB  -6  1997 
jJ#wd 
v  J 
FROM:  Bruce C. Vladeck 
Administrator  * 
SUBJECT:  OffIce  of Inspector General (OIG)  Draft Report: Questionable  Practices 
Involving  Nebuhzer  Drug Therapy,  (OEI-03-94-00391) 
TO:  June Gibbs Brown 
Inspector General 
We reviewed the above-referenced  report that identified questionable practices  relatig  to 
nebulizer  drug  therapy  provided  to  Medicare  beneficiaries. 
Our detailed comments on the report recommendations  are attached for your 
consideration.  Thank you for the opportunity  to review and comment on this report. 
Attachment 
JG 
E:  = 
mm 
DIG-AS 
gII;c 
325 
m-a   
DIG-MP_ 
AIG-LC 
OGCJIG 
Exccscc
z
DateW  ~  The Health Care Financing Administration  [HCFA)  Comments  on 
Office  of Inspector General (OIG)  Draft Report: 
Questionable  Practices Involving Nebulizer  Drug Therarw,> 
(OEI-03-94-00391] 
OIG Recommendation 
HCFA should eliminate the questionable  and abusive billings  encountered  in this 
inspection. 
HCFA Response 
We concur.  HCFA is aware of existing problems in this area of the Medicare program 
and took corrective action to ensure that nebulizer drug therapy billings are appropriate. 
The durable medical equipment  (DME)  regional carriers revised the regional medical 
review  policy  (RMRP)  for nebulizers  and nebulizer drugs.  The revised RMRP  was 
published  in the December  1996 DME  Regional  Carrier Advisory  for distribution to all 
DME  suppliers.  The new policy,  which becomes  effective  in April  1997, has more 
stringent guidelines  that should reduce over-utilization  and overfWing  for nebulizer  drug 
therapy equipment and services.  It requires that suppliers bill Medicare for nebulizers 
and licensed pharmacy entities dispense and bill for nebulizer drugs.  The policy also 
provides tightened coverage criteria for respiratory  diagnoses and requires more specific 
coding to be used when billing Medicare for nebulizer therapy.  The revised coverage 
criteria and coding guidelines will compel the supplier to bill Medicare for the services 
that are medically necessary.  This will reduce the opportunity for suppliers to upcode. 
We anticipate  significant savings will result from these actions. 
OIG Recommendation 
HCFA should ensure that beneficiaries requiring nebulizer therapy receive treatments  that 
are appropriate. 
HCFA Response 
We concur.  HCFA recently clarified the Medicare Carriers Manual at section 3060.D. 
That section places the dispensing and billing for nebulizer drugs under the jurisdiction  of 
licensed pharmacies that must meet the strict pharmacy practice standards established  by 
state boards of pharmacy regulations and professional association ethics.  We believe 
pharmacists  involvement will ensure appropriate dispensing and prevent overuse of 
nebulizer  drugs.