Department of Health and Human Services

OFFICE OF 

INSPECTOR GENERAL 

INVALID PRESCRIBER 

IDENTIFIERS ON MEDICARE 

PART D DRUG CLAIMS 

 

Daniel R. Levinson 

Inspector General 

June 2010 

OEI-03-09-00140 
 

INTRODUCTION EXECUTIVE S UMMARY 

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 drug’s 

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 

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EXECUTIVE SUMMARY 

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. 

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EXECUTIVE SUMMARY 

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 CMS’s 

assertion that invalid prescriber identifiers do not automatically 

indicate invalid prescriptions or pharmacy claims. However, CMS’s 

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. 

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EXECUTIVE SUMMARY 

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. 
 TABLE OF CONTENTS 

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

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 

FINDINGS .................................................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 

RECOMMENDATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 

Agency Comments and Office of Inspector General Response . . . . 14

 

APPENDIX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 

A: Agency Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

ACKNOWLEDGMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
 

 INTRODUCTION 

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. 

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INTRODUCTION 

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 drug’s 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 enrollee’s 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 prescriber’s 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 prescriber’s 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. 5–6. 

5 CMS, op. cit., p. 13. 

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INTRODUCTION 

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 partners—such as health plans, clearinghouses, and other 

providers—on 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 prescriber’s 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, 2008—the 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. 

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INTRODUCTION 

4 

merce. 

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 Com

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). 

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INTRODUCTION 

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. 

5 

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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INTRODUCTION 

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 CMS’s 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 

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INTRODUCTION 

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 CMS’s 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 beneficiary’s 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 

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INTRODUCTION 

 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. 

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FINDINGS 

$1.2 billion in Medicare Part D prescription 

drug claims contained invalid prescriber 

identifiers in 2007 

 FINDINGS 

Part D plans are required to 

include prescriber identifiers on the 

PDE records they submit to CMS.15 

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. 

 1

The type of prescriber identifier on PDE records was determined using the codes in the prescriber identifier qualifier 

field. 

Source: OIG analysis of CMS’s 2007 PDE records. 

Table 1: Part D PDE Records With Invalid Prescriber Identifiers by Identifier Type, 2007 

Prescriber 

Identifier Type1

Number of PDE 

Records With Invalid 

Identifiers 

Percentage of All 

PDE Records With 

Invalid Identifiers 

Payments for PDE 

Records With Invalid 

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 

9 

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. 

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FINDINGS 

prescriber identifiers were coded as NPIs. Less than one-tenth of 1 

percent of records with invalid prescriber identifiers were coded as 

UPINs. 

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. These PDE records 

represented $213 million in payments by Medicare drug plans and 

enrollees in 2007. 

Identifiers on 17 percent of the drug claims with 

invalid prescriber identifiers did not conform to 

format specifications 

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 

 O E I - 0 3 - 0 9 - 0 0 1 4 0 I NVALID P RESCRIBER I DENTIFIERS ON MEDICARE PART D DRUG CLAIMS 10 
 

FINDINGS 

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 

invalid prescriber identifiers 

were used on PDE records. 

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. 

Ten invalid identifiers accounted for 17 percent 

of the drug claims with invalid prescriber 

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. 

11 

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. 

 O E I - 0 3 - 0 9 - 0 0 1 4 0 I NVALID P RESCRIBER I DENTIFIERS ON MEDICARE PART D DRUG CLAIMS
 

FINDINGS 

Table 2: PDE Records and Payments for Top 10 Invalid Prescriber Identifiers 

in 2007 

Invalid Prescriber Identifier Number of PDE 

Records for Invalid 

Identifier 

Plan and Enrollee 

Payments for Invalid 

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 

identifiers 

17.15% 19.01% 

 

Source: OIG analysis of CMS’s 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. 

 O E I - 0 3 - 0 9 - 0 0 1 4 0 I NVALID P RESCRIBER I DENTIFIERS ON MEDICARE PART D DRUG CLAIMS 12 
 

FINDINGS 

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 company’s locations across the country. 

This company is a large pharmacy benefit manager and mail-order 

pharmacy. 

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 RECOMMENDATIONS 

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 CMS’s assertion that invalid 

prescriber identifiers do not automatically indicate invalid prescriptions 

or pharmacy claims. However, CMS’s efforts to determine the validity, 

medical necessity, or appropriateness of Part D prescriptions and drug 

claims may be limited without valid prescriber identifiers. 

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RECOMMENDATIONS 

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 CMS’s comments is provided in Appendix A. 

 O E I - 0 3 - 0 9 - 0 0 1 4 0 I NVALID P RESCRIBER I DENTIFIERS ON MEDICARE PART D DRUG CLAIMS 15 
A P PEN D x A 


Agency Comments 

./'..~'iP"I(.'Q.lct, {4.J 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. 

OEI·03·09·00140 INVALID PRESCRIBER IDENTIFIERS ON MEDICARE PART D DRUG CLAIMS 16 
 

 O E I - 0 3 - 0 9 - 0 0 1 4 0 I NVALID P RESCRIBER I DENTIFIERS ON MEDICARE PART D DRUG CLAIMS 17 

APPENDIX ~ A 
 

 O E I - 0 3 - 0 9 - 0 0 1 4 0 I NVALID P RESCRIBER I DENTIFIERS ON MEDICARE PART D DRUG CLAIMS 18 

 ACKNOWLEDGMENTS 

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 General’s Office of Audit Services. 
Office of Inspector General 

http://oig.hhs.gov 

The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-452, as 

amended, is to protect the integrity of the Department of Health and Human Services 

(HHS) programs, as well as the health and welfare of beneficiaries served by those 

programs. This statutory mission is carried out through a nationwide network of audits, 

investigations, and inspections conducted by the following operating components: 

Office of Audit Services 

The Office of Audit Services (OAS) provides auditing services for HHS, either by conducting 

audits with its own audit resources or by overseeing audit work done by others. Audits 

examine the performance of HHS programs and/or its grantees and contractors in carrying 

out their respective responsibilities and are intended to provide independent assessments of 

HHS programs and operations. These assessments help reduce waste, abuse, and 

mismanagement and promote economy and efficiency throughout HHS. 

Office of Evaluation and Inspections 

The Office of Evaluation and Inspections (OEI) conducts national evaluations to provide 

HHS, Congress, and the public with timely, useful, and reliable information on significant 

issues. These evaluations focus on preventing fraud, waste, or abuse and promoting 

economy, efficiency, and effectiveness of departmental programs. To promote impact, OEI 

reports also present practical recommendations for improving program operations. 

Office of Investigations 

The Office of Investigations (OI) conducts criminal, civil, and administrative investigations 

of fraud and misconduct related to HHS programs, operations, and beneficiaries. With 

investigators working in all 50 States and the District of Columbia, OI utilizes its resources 

by actively coordinating with the Department of Justice and other Federal, State, and local 

law enforcement authorities. The investigative efforts of OI often lead to criminal 

convictions, administrative sanctions, and/or civil monetary penalties. 

Office of Counsel to the Inspector General 

The Office of Counsel to the Inspector General (OCIG) provides general legal services to 

OIG, rendering advice and opinions on HHS programs and operations and providing all 

legal support for OIG’s internal operations. OCIG represents OIG in all civil and 

administrative fraud and abuse cases involving HHS programs, including False Claims Act, 

program exclusion, and civil monetary penalty cases. In connection with these cases, OCIG 

also negotiates and monitors corporate integrity agreements. OCIG renders advisory 

opinions, issues compliance program guidance, publishes fraud alerts, and provides other 

guidance to the health care industry concerning the anti-kickback statute and other OIG 

enforcement authorities.