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Inspector General faults Medicare for not tracking ‘extreme’ prescribers

Echoing a ProPublica investigation, a report finds hundreds of doctors with questionable and potentially dangerous prescribing patterns. In a response, Medicare says it will step up monitoring and review the list for fraud or abuse

More than 700 doctors nationwide wrote prescriptions for elderly and disabled patients in highly questionable and potentially harmful ways, according to a critical report of Medicare's drug program released today.
 

The review by the inspector general of the U.S. Department of Health and Human Services flags those doctors as "very extreme" in their prescribing – and says that Medicare should do more to investigate or stop them.
 

The study mirrors a ProPublica investigation last month that found Medicare had failed to protect patients from doctors and other health professionals who prescribed large quantities of potentially harmful, disorienting or addictive drugs.
 

Medicare's prescription drug program was launched in 2006 and now accounts for about one of every four drugs dispensed nationwide. Last year, the government spent $62 billion subsidizing the drugs of 32 million people.
 

"Strong oversight of the Medicare prescription drug program is critical for protecting patients from harm," Sen. Tom Carper, D-Del., said in an email.
 

Carper chairs the Senate Homeland Security and Governmental Affairs Committee, which has scheduled a hearing Monday about prescription abuse in the Medicare program, known as Part D.
 

The inspector general's report focused on the prescribing of nearly 87,000 general-care physicians, such as family practitioners and internists, in urban and suburban areas in 2009. These doctors accounted for about half of all the prescribing in the program that year.
 

The review found more than 2,200 doctors whose records stood out in one of several areas: prescriptions per patient, brand name drugs, painkillers and other addictive drugs or the number of pharmacies that dispensed their orders.
 

Of those, 736 were flagged as "extreme outliers." Their patterns, the report says, raised questions about whether the prescriptions were "legitimate or necessary."
 

For instance, 24 doctors wrote more than 400 prescriptions for at least one patient, including refills dispensed. One Ohio physician did so more than a dozen times, according to the report. The average doctor wrote 13 per patient.
 

In another case, an Illinois doctor had prescriptions filled by 872 pharmacies in 47 states and Guam. General-care doctors, on average, had prescriptions for all their Medicare patients filled by 52 pharmacies.
 

The cost to the government was enormous in some instances. Medicare paid $9.7 million for the prescriptions of one California doctor alone – that is 151 times more than the cost of an average doctor's tally, the report says.
 

Most of this physician's drugs were supplied by just two pharmacies, both of which had previously been identified by the inspector general as having questionable billing practices.
 

All told, the drugs ordered by the doctors labeled "extreme outliers" cost Medicare $352 million, the report says.
 

While some of this may have been appropriate, the report says, "prescribing high amounts on any of these measures may indicate that a physician is prescribing drugs which are not medically necessary or that he or she has an inappropriate incentive, such as a kickback, to order certain drugs."
 

Sen. Tom Coburn of Oklahoma, the ranking Republican on Carper's committee, said no one wants Medicare to tell doctors which drugs to prescribe. But the government does have a responsibility in preventing fraud and abuse, he said.
 

Medicare officials "should be using their data to make sure those practicing medicine are practicing medicine and not practicing a sham," said Coburn, who is also an obstetrician.
 

The inspector general's report calls on the Centers for Medicare and Medicaid Services (CMS), which oversees the program, to step up scrutiny of doctors with questionable prescribing patterns. It urged CMS to direct its fraud contractor to expand its analysis of prescribers and train the private insurers that administer Part D on how to spot problem prescribers.
 

Medicare also should send doctors report cards comparing their prescribing to their peers, the report says.
 

In a response to the inspector general, the Medicare agency wrote that it agreed with the recommendations, has been working to reduce overuse of narcotics and plans to expand its use of data to flag questionable prescribing.
 

"We must balance these efforts with ensuring that beneficiaries have access to the medicines they need," a CMS spokesman said Wednesday in a statement.
 

For ProPublica's investigation, reporters analyzed four years of Medicare prescription drug data and examined the prescriptions of all health professionals across specialties. It examined all prescribers – 1.7 million in 2010 alone – not just those in general-care specialties or mostly urban areas.
 

The new report from the inspector general is the latest to find oversight problems in Part D. Previous reports found that insurers have paid for prescriptions from doctors who were barred by Medicare or whose identities were unknown to insurers or Medicare.
 

Coburn said Medicare has had repeated warnings that it was failing to properly oversee the program.
 

"This is incompetency and lack of somebody being held accountable," he said. "It's fixable."

Courtesy: ProPublica.org

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COMMENTS

MOHAN SIROYA

3 years ago

This is the story of USA.
When I am back in India, in July, I will give you what havoc the 'Cartelization' of Chemists ,Druggists and MANUFACTURERS ARE INDULGING IN and how the F & D Administration ,has been rendered a helpless spectator.

Rupee falls 13 paise against dollar in early trade

The rupee weakened further by 13 paise to trade at Rs59.70 against the US dollar in early trade on Friday, on unrelenting capital outflows and strong demand of the American currency from importers

Continuing its decline, the rupee weakened further by 13 paise to trade at Rs59.70 against the US dollar in early trade on Friday, on unrelenting capital outflows and strong demand of the American currency from importers.

 

However, the euro’s gain against the US dollar overseas, capped rupee’s loss.

 

The Indian unit had yesterday hit an all-time low of 59.93 intraday, before the Reserve Bank of India stepped in to help the local currency recover some ground. It had ended 87 paise down at 59.57 on huge outflows.

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SEBI’s call auction absurdity: A trade of 1 share wipes off Rs1.72 crore of market cap

Hind Industries, a small-cap company, saw its market capitalisation get decimated by Rs1.72 crore over a single trade of a single share on Wednesday! This is a result of SEBI’s newly-introduced call auction system of tackling illiquid counter

On Wednesday, Rs1.72 crore of market capitalisation was wiped off, in a single trade of just one share, in Bombay Stock Exchange (BSE) listed scrip—Hind Industries, points out investor Bosco Menezes. This trade took place in the much-touted and controversial Periodic Call Auction System (PCAS) window, introduced by Securities Exchange Board of India (SEBI), where illiquid scrips are traded. This clearly means that PCAS system is extremely susceptible to manipulation—exactly what the SEBI tried to counter through PCAS!

Here is what happened yesterday.
 

In the BSE’s PCAS window, just one share was traded at Rs 38.10, which is apparently the lower circuit filter and the first trade since 29 May 2013. Its previous close was Rs40.10 (i.e. 29th May). This means, roughly Rs1.72 crore of market capitalisation of Hind Industries was destroyed with a single trade. In fact, this isn’t helping the liquidity situation because the total traded volume was just one share!
 

What is more shocking is that Hind Industries was actually a healthily traded company, with decent volumes, at least by its small-cap standards. It wasn’t until the PCAS system introduced by SEBI which termed the company ‘illiquid’.
 

Hind Industries saw 78,939 shares traded in January 2013, followed by 31,525 shares in Feb 2013, and thereafter a volume of 56,873 shares in March 2013. This is a cumulative of 167,337 shares, or roughly 2,700 shares traded daily, over the three month period ending March 2013 (i.e. 62 trading days), just prior to the inauguration of the PCAS system. Last year it was greater than 1,600 shares and the year prior to that it was greater than 2,250 shares. These are decent numbers of shares traded for a small-cap company.
 

What happened after PCAS system came into force? The company became ‘illiquid’ overnight. The average daily traded volume tanked over 95%! In May, only 2,673 shares were traded over 23 trading days (and works out to 116 shares daily). In April, it was slightly better though, with 982 shares traded daily, but still way below the 2,700 shares in the first calendar quarter.
 

So much for SEBI’s effort to infuse ‘liquidity’ and “curb manipulation” through a separate window. This puts many counters at the risk of price manipulation (whether by the promoter or someone else). We had written about SEBI’s flawed PCAS policy in the past. You can access them below:
 

Curbing manipulation in illiquid stocks: Another harebrained idea by SEBI?
 

Bombay Stock Exchange declares 2,050 companies as ‘illiquid’

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COMMENTS

Sreeselva

3 years ago

Sreeselva

I offer my support to the movement

1. City I belong to - Bangalore

2. Willingness to contribute financially - Yes

3. Willingness to add their name as petitioners - Yes

4. Willingness to attend court hearings - No

imran

3 years ago

Imran from Trivandrum, Kerala

1. City I belong to - Trivandrum

2. Willingness to contribute financially - Yes

3. Willingness to add their name as petitioners - Yes

4. Willingness to attend court hearings - Sorry.

SS

3 years ago

I am a genuine small investor and SEBI's idea is hurting a lot. I am holding a good profit making company for one year now - but not easy to sell. I hope to just collect the dividend till SEBI gets better sense. The price and volume are subdued due to this rule. I have already made up my mind to stay away from this segment because of this stupid rule even when there are good companies with attractive valuations - mind you SEBI, I am a genuine investor with a minimal portfolio churn.

If I am an owner I would hate to have a step motherly treatment to my company, where investors avoid my company because of SEBI's mindless action.


It seems like the decision was purely academic. I doubt whether anyone in the panel is a significant investor in these companies and could think genuinely from a practical investors point of view or from owners point of view.

I am all for a PIL:

1. City I belong to - Bangalore

2. Willingness to contribute financially - Yes

3. Willingness to add their name as petitioners - Yes

4. Willingness to attend court hearings - No

Neeraj

3 years ago

Recently Finaicial Express has covered PCA mechanism. The link is:-
http://www.financialexpress.com/news/cal...

Call auction window for illiquid stocks fails to find many takers

FE Bureau : Mumbai, Jul 13 2013, 00:24 IST

More than three months have passed since the Securities and Exchange Board of India (Sebi) introduced the periodic call auction mechanism for illiquid stocks, but market participants are still questioning the merits of the practice as it has led to a notable drop in trading volumes on these stocks.

According to Bloomberg data, nearly 50% of the stocks under illiquid category have seen a drop in volumes since April. Stocks like Mafatlal Industries, Pioneer Distilleries, Hindoostan Mills, DCM Shriram Industries, Lancor Holdings, Anjani Portland and Nahar Capital have seen their volumes halve when compared to volumes seen in April before the periodic call auction was introduced.

Periodic call auction mechanism refers to a system wherein buy/sell orders are pooled for a predetermined period of time, after which the orders are matched and executed. Sebi is of the belief that call auction mechanism lowers the probability of speculative trades done at artificial prices.

However, according to an industry veteran, the system of 4-5 auction windows in a single day has made trading difficult with many investors ignoring the segment due to the uncertainty in the execution of trades

There seems to be no such precedent in any other leading market globally. Many investors find it cumbersome to trade in these illiquid windows. Most stocks have seen a fall in turnover and it cannot be said that only speculative trades have vanished, said the co-head of a domestic brokerage, wishing not to be named.

In February, Sebi stated that periodic call auction sessions of one hour each would be conducted throughout the trading hours with the first session starting at 9.30am. Market players, however, say that the mechanism has made trading in these stocks more complex, thereby driving away even the genuine investors.

Brokers further say if Sebi is keen on continuing with the auction windows, then it should at least cut down the number of such sessions each day so that a larger number of orders can be pooled in a shorter duration of time. This, they say, would enhance the probability of trades getting executed.

The biggest hindrance in the auction window is uncertainty of execution. Even if you place an order near the equilibrium price, there is a probability that it would not be executed. That defeats the whole purpose of the system aimed at efficient price discovery. These factors become major concerns at a time when the overall market scenario is also bleak, said another broker.

While market participants have discussed this matter with the regulator, it is believed that Sebi would like to wait for some more time before reviewing the current mechanism.

Interestingly, the regulator has implemented the periodic call auction window in the segment for small and medium enterprises (SMEs) launched by BSE and NSE. Market participants have already suggested to Sebi that the current system should be done away with and only one auction session should be allowed in one day.

Manoj Chakraborty

3 years ago

Manoj Chakraborty
I offer my support to the movement

1. City I belong to - Bangalore

2. Willingness to contribute financially - No

3. Willingness to add their name as petitioners - Yes

4. Willingness to attend court hearings - No

Subbu Murugesan

3 years ago

I offer my support to the movement

1. City I belong to - London

2. Willingness to contribute financially - Yes

3. Willingness to add their name as petitioners - Yes

4. Willingness to attend court hearings - No

Neeraj

3 years ago

I offer my support to the movement

1. City I belong to - Hissar, Haryana

2. Willingness to contribute financially - Yes

3. Willingness to add their name as petitioners - No

4. Willingness to attend court hearings - No

Neeraj

3 years ago

http://articles.economictimes.indiatimes...

http://www.anmi.in/admin/anmiatworkfiles...

Everybody knows that there is a perfect correlation between fall in cash mkt./delivery volumes & introduction of PCA in stocks. But SEBI is far too arrogant to realise its mistake & rectify it. Stock Brokers, one by one, are banning buy/sell in PCA stocks, which now comprise 60% of all listed & active stocks in Indian Stock Markets, making things even worse. - A Concerned Investor

Archana Chirawewala

3 years ago

Name: Archana C
1. City that they belong to: Mumbai

2. Willingness to contribute financially: No

3. Willingness to add their name as petitioners: Yes

4. Willingness to attend court hearings when free: Yes

Abhay Munot

3 years ago

Abhay Munot
I offer my support to the movement

1. City I belong to - Chicago, USA

2. Willingness to contribute financially - Yes

3. Willingness to add their name as petitioners - Yes

4. Willingness to attend court hearings - No

Vijayraghav rao

3 years ago

We need more of good governance and less of needless intervention into markets. The sebi needs to focus on big manipulators rather than come up with ill conceived ideas to destroy small cap market

Siva

3 years ago

I think a PCA exclusion list would save a lot of time for SEBI and investors. What crap!! Next, SEBI might propose going back to the old system of transacting share certificates!!

Bosco Menezes

3 years ago

PCAS - New List is out today .... 274 companies in the list, many well known names such as Kirloskar Industries, LG Bala Bros, Wendt, Rajshree Sugar, Oriental Carbon & Chemicals, Alkyl Amines, Warren Tea, ITD Cementation, Panasonic Appliances, Sandesh, Rishi Lazer, Ador Fontech, MRO-TEK, APW President, Rane (Madras), Asian Hotels (West) .... they will go into PCAS from July 8th.

Announcement is here : http://www.bseindia.com/markets/MarketIn...

aditya deorah

3 years ago

aditya

money life subscriber
[email protected]




1. City I belong to - kolkata

2. Willingness to contribute financially - Yes

3. Willingness to add name as petitioner - Yes

4. Willingness to attend court hearings when free - Yes

Shankarnarayan

3 years ago

Few more ill effects of PCA :

1.)Potential multibaggers are dying a slow death. Multibaggers , atleast during their initial stages of upmove, usually have characteristics like relatively unknown,low liquidity,low institutional holding etc. These are exactly the kind of stocks in PCA.

2.) Also many retail investors prefer low priced scripts than the high priced ones. A kind of feeling of safety buying a Rs 50 stock than a Rs 500 stock. Such investors are now discouraged to participate.

I am ready to contribute anyway to fight this.

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