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NYS Comptroller

THOMAS P. DiNAPOLI

Press Releases

February 6, 2015, Contact: Press Office (518) 474-4015

DiNapoli: State Failed to Block Payments to Providers Supplying Controlled Substances Beyond Legal Limits

New York’s Medicaid system overpaid pharmacies by more than $1.1 million over a five-year period for narcotics and other controlled substance prescriptions that exceeded limits allowed by the law, according to an audit of the Department of Health (DOH) released today by State Comptroller Thomas P. DiNapoli.

“Controlled substances can ease suffering and provide treatment for people with serious medical problems, but these drugs can also cause serious harm or be sold illicitly,” DiNapoli said. “New York puts limits on these medications for a reason – to cut the potential for abuse. The Department of Health needs to do a better job making sure that pharmacies, health care providers and patients are not skirting these rules.”

The New York State Controlled Substances Act limits the quantities of controlled substances that pharmacies can dispense when prescriptions are ordered via telephone or fax due to the inherent risk of drugs ordered in this manner being diverted for inappropriate or unauthorized use. Generally, drugs that are highly prone to abuse are limited to a five-day supply, while others that carry less risk are limited to a 30-day supply.

DiNapoli’s auditors determined DOH’s eMedNY claims processing system did not properly deny claims from pharmacies for controlled substances that exceeded the supply limits put in place by the Controlled Substances Act and thus prevent improper payment. Medicaid overpaid pharmacies $1.2 million for 13,705 fee-for-service claims, in which quantities of controlled substances exceeded the legal limits.

In one instance, DiNapoli’s auditors found that a pharmacy filled two telephone orders for the anti-anxiety drug Alprazolam on the same day for one recipient. Each order was filled for a 30-day supply even though telephone orders for this drug are limited to a five-day supply that can only be dispensed in emergency situations. The supporting documentation for the prescriptions did not indicate the orders were authorized for emergency purposes.

Auditors also identified 3,323 managed care claims for controlled substances in which the quantities dispensed exceeded the limits set by the act. Auditors identified two managed care organizations (MCO) that, similar to DOH, do not have system edits to prevent the payment of pharmacy claims for controlled substances that exceed supply limits. Other participating MCOs may also not have such controls.

DiNapoli recommended DOH:

  • Review the improper pharmacy claims and make recoveries, as appropriate;
  • Implement eMedNY edits to prevent the payment of pharmacy claims for quantities of controlled substances that exceed supply limits allowed by the act;
  • Instruct MCOs to implement controls to prevent the payment of pharmacy claims for quantities of controlled substances that exceed supply limits allowed by the act; and
  • Formally remind pharmacy providers of the supply limits on controlled substances.

DOH agreed with the audit’s findings and has begun implementing the recommendations. For a copy of the report visit: Improper Payments for Controlled Substances that Exceed Allowed Dispensing Limits.

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