Fraud detection operation examines pharmacy providers

The OIG’s Medicaid Program Integrity (MPI) team conducted a fraud detection operation -- which uses data to identify fraud, waste and abuse -- to examine prescription services billed to Texas Medicaid at a level above and beyond that of the providers’ peers. The OIG Fraud Analytics team enhanced three existing algorithms, developed five new algorithms, and developed a new risk-based method for identifying specific claims for further review based on member claims history related to pharmacies. MPI selected providers to examine based on this analysis, which flagged:

  • Specific drugs that had a significant spike in claims.
  • Prescription brokering, to include member to prescriber, member to pharmacy, and prescriber to pharmacy distances. 
  • Filled prescriptions where the prescriber has no Medicaid billing or rendering history. 

Records were requested from prescribing providers as well as the outlier pharmacies and will be reviewed once received. Cases may be referred to full-scale investigation if the initial review warrants a closer look at the pharmacy’s billing and documentation patterns and other evidence.