Invoice reconciliation keeps Medicaid-enrolled pharmacies in compliance

One of the ways the OIG ensures program compliance is through pharmacy invoice reconciliation investigations. The OIG initiates these investigations when data analysis flags a pharmacy as an outlier among its peers. By itself, outlier status does not indicate fraud, but it may suggest the need for further investigation.

Several invoice investigations have led to substantial recoveries, penalties and even criminal prosecution. In March, a Fort Worth pharmacy agreed to pay $1.6 million as a result of such an investigation. Another resulted in a criminal conviction. Still, more are pending with the OIG with potential combined overpayments of millions of dollars.

Recordkeeping
The OIG begins pharmacy invoice investigations by reviewing pharmacy records and paid claims data. Investigators may also request medical records from prescribing physicians and invoices from suppliers.

Without adequate records, pharmacies cannot demonstrate that they purchased enough of a particular National Drug Code (NDC) to account for their billing of that NDC or whether the prescriptions billed were dispensed to the client. Maintaining comprehensive records is essential to demonstrate products and services were provided as billed, and is required under Texas Administrative Code, Title 1, Section 371.1667 (4)(B).

Common findings
Discrepancies can typically be attributed to several practices that result in the pharmacy billing for more of an NDC than purchased. These include:

  • Billing for a name-brand medication while dispensing a generic medication.
  • Billing for refills not picked up by the client or never ordered by the prescriber.
  • Dispensing a different NDC than billed, even if for the same medication. Although the medication is the same, different NDCs are reimbursed at different rates to account for package size or other factors. Some NDCs, if not on the Vendor Drug Program Formulary, are not reimbursable.

Prevention and reporting
We hope this information will help pharmacists protect their businesses and avoid costly mistakes. Stringent recordkeeping and quality control processes are critical to quality of care and accurate billing.

Pharmacists who discover discrepancies are encouraged to self-disclose to the OIG by visiting ReportTexasFraud.com or calling 800-436-6184. Doing so can potentially reduce legal and financial exposure by avoiding prolonged investigations or litigation.