Objective

To determine whether Medicaid recipients, including sex offenders, inappropriately received Medicaid-funded sexual dysfunction and erectile dysfunction drugs, procedures, and supplies, and whether controls are in place to prevent abuse and misuse of these products. The audit covered the period from April 1, 2012 to July 1, 2018.

About the Program

Federal and State laws prohibit Medicaid payment of drugs for the treatment of sexual or erectile dysfunction (herein referred to as ED) for all Medicaid recipients, including registered sex offenders. In addition, Medicaid must not pay for ED drugs, unless that drug has another Food and Drug Administration-approved use and the recipient's treatment is for that other use. To protect public safety, State laws are more restrictive and also prohibit Medicaid payment of procedures and supplies to treat ED for registered sex offenders.

Key Findings

• Medicaid made improper payments of $933,594 for drugs, procedures, and supplies to treat ED. Of that, Medicaid paid $63,301 for 47 sex offenders (30 of whom were classified as a level-2 or a level-3 sex offender).
• Medicaid made questionable payments for ED drugs that are approved to also treat other medical conditions (primarily benign prostatic hyperplasia [BPH] and pulmonary arterial hypertension [PAH]). We identified the following concerns.
  • Significant percentages of recipients prescribed ED drugs approved to also treat BPH or PAH may not have had diagnoses of BPH or PAH – elevating the risk of abuse and diversion associated with these drugs. We found that between $2.8 million and $5.2 million in payments for ED drugs approved to also treat BPH or PAH were made on behalf of recipients who did not have a corresponding BPH or PAH diagnosis on their Medicaid claims that were submitted within two to six months of the drug prescription. Further, among those payments, we found 411 recipients who had a diagnosis of ED (but no BPH or PAH diagnosis) on their claims submitted within six months of the drug prescription, totaling $207,256 in Medicaid payments.
  • Medicaid paid $285,641 for ED drugs approved to also treat BPH or PAH for 14 sex offenders (11 of whom were classified as a level-2 or a level-3 sex offender). We reviewed the medical records of 13 of the 14 sex offenders to determine if the records supported a diagnosis of BPH or PAH and found: 4 of 13 cases supported a diagnosis of ED (31 percent), 8 of 13 cases supported diagnoses of BPH or PAH, and 1 case was indeterminate.
• Managed care organizations (MCOs) made most of the payments we reported on. We found the Department did not monitor utilization of ED drugs, procedures, and supplies, including payments by MCOs. We further found some MCO controls are not designed to prevent sex offenders from obtaining treatment for ED. Specifically, after a recipient obtains services to treat ED, if an MCO finds out the recipient is a registered sex offender, the MCO merely does not pay for the services. Certain steps could be taken to help prevent sex offenders from obtaining the services.
• We observed that certain Medicaid laws and policies are inconsistent:
  • State policy does not allow payment of ED drugs for the treatment of BPH under fee-for-service (because at the approved dosage to treat BPH, the drugs can be used to treat ED), but allows payment of these drugs under managed care.
  • State law prohibits payment of ED procedures and supplies for sex offenders, whereas federal laws do not address ED procedures and supplies for sex offenders.

Key Recommendations

Throughout the audit, we made the Department aware of our findings, and the Department took steps to promptly address many of the problems we identified. We recommended that the Department:

• Review the payments we identified and ensure recoveries are made, as appropriate.
• Regularly provide MCOs with detailed lists of all ED drugs, procedures, and supplies that are excluded or have limited Medicaid coverage.
• Periodically monitor coverage, utilization, and payment of ED drugs, procedures, and supplies; and take corrective actions to ensure compliance with laws, policies, and procedures.
• Improve the Department’s eMedNY computer system controls to (a) apply sex offender status in the processing of certain claims and (b) prevent the processing of incomplete Division of Criminal Justice Services sex offender registry files.