Medicare paid five times more for two brand-name inhalation meds in Miami.

The HHS Office of Inspector General’s latest report slams fraudulent billing for inhalation medications used in conjunction with durable medical equipment, particularly budesonide and levalbuterol.. “Although only 2 percent of Medicare beneficiaries live in South Florida, this area accounted for 17 percent of Medicare spending on inhalation drugs in 2007,” the OIG noted.

Medicare paid 20 times as much for inhalation drugs in Miami as in the Chicago area, even though Chicago has nearly twice as many beneficiaries, the OIG pointed out. “Among beneficiaries with paid inhalation drug claims, Medicare spent approximately $4,400 per South Florida beneficiary on inhalation drugs, compared to just $815 per beneficiary on inhalation drugs in the rest of the country.”

It was spending on budesonide and levalbuterol that was markedly different in the area, the OIG found. “In 2007, 56 percent of South Florida beneficiaries who received inhalation drugs had claims paid for budesonide, compared to 14 percent of beneficiaries in the rest of the country,” the report said.

And 31 percent of South Florida benes had multiple suppliers for inhalation drugs versus 12 percent in the rest of the country.

A local coverage determination was in place for budesonide during the time the OIG studied, but Medicare’s claims system and contractors failed to enforce it, the OIG said. Consequently, 75 percent of South Florida benes who received the drug exceeded the LCD limit.

For 62 percent of inhalation drug claims, the patient didn’t have a visit with the prescribing doctor in the previous three years, the OIG added. “For 16 percent of suppliers, not a single South Florida beneficiary to whom they provided inhalation drugs had a billed claim with the physician.”

Some beneficiaries are finding out from Medicare Summary Notices that their information is being used to falsely bill for medication they were never prescribed and didn’t receive, according to the Miami Herald.

CMS Will Have to Step Up Its Oversight

The OIG recommends that the Centers for Medicare & Medicaid Services enforce the LCD limits and review suspicious cases for action, the report concludes.

CMS says it has already put in place a medically unlikely edit (MUE) for budesonide, which took effect last September. That edit has cut both allowed and billed amounts for the drug in half in South Florida, the agency says in its official response to the OIG report.

CMS also touts its “DME Stop Gap Plan” -- a crackdown on DME fraud in seven high-risk states. The anti-fraud campaign is already addressing many of the issues raised in this report, said CMS head Charlene Frizzera in the agency’s comments.

Multiple inhalation drug suppliers, pharmacists, and physicians have faced charges under the crackdown, the Herald notes.

The report highlights CMS’s lax oversight of the DME program, industry experts maintain. But it is legitimate suppliers who are likely to end up paying the price for that problem.

Sen. Mel Martinez (R-FL) has called a Senate Special Committee on Aging hearing about the report on May 6. “These findings are confirmation that not enough is being done to detect and prevent the waste of taxpayer dollars,” Martinez says.

“It’s clear that we must step up our efforts to not only detect fraud, but prevent this egregious waste,” he added in a release.

Shining a spotlight on the abuses in the report could hurt legitimate suppliers’ efforts to win help from Congress this year on pressing issues such as competitive bidding and the oxygen cap, industry veterans worry.

Both the OIG report and a recent congressional hearing “underscore the sorry state of Medicare fraud prevention in the United States,” laments the American Association for Homecare. Medicare’s laxity “has had a tragic, adverse impact on the vast majority of home medical equipment providers who fully comply with the law and that provide high quality services to seniors and people with disabilities who require medical equipment and care.”