OIG identifies common pharmacy violations

March 7, 2023

The Texas Health and Human Services Office of Inspector General (OIG) works with Texas pharmacists to prevent and investigate fraud, waste and abuse in Medicaid and CHIP services. OIG actions help providers minimize billing mistakes and ensure Texas tax dollars are used for their intended purposes.

Through the course of its audits, inspections, reviews and investigations, the OIG often sees similar errors repeated by numerous pharmacy providers. The problems can be revealed through the OIG’s data-driven initiatives that examine claims and flag unusual billing patterns, or may arise from reports by an MCO or Medicaid client. Whether the violations are accidental or intentional, it is the OIG’s job to verify that prescriptions billed to Medicaid were filled as prescribed, necessary and met the profession’s standard of care.

Typical errors

These are the most common violations observed in OIG pharmacy investigations:

Dispensing more or less quantity than prescribed without prescriber authorization documented.
Refilling a prescription without authorized refills.
Adding drugs to prescriptions received and not giving the medications to clients.
Billing for a brand drug but dispensing a generic.
Billing for a drug without documentation of an invoice supporting the purchase.
Phantom billing for prescriptions that were never dispensed.

Costly violations

What seem like minor errors can add up to a large cost. Two examples of pharmacy cases settled by the OIG in fiscal year 2022 include:

A Southeast Texas pharmacy lacked documentation to support the medication quantities billed to Medicaid compared to medications purchased from vendors over a four-year period. The provider worked with the OIG to resolve these issues and agreed to a settlement of $1,333,660.
A Houston pharmacy lacked documentation to support the medication quantities billed to Medicaid compared to medications purchased from vendors. For that case, the OIG agreed to a settlement of $42,521.

Report a problem

Providers who discover their own discrepancies are encouraged to self-report the matter to their pharmacy benefits manager, managed care organization or to the OIG’s Fraud Hotline at 800-436-6184 or website, ReportTexasFraud.com. The OIG may consider self-reporting as a potential mitigating factor that may warrant less restrictive administrative actions or sanctions.