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Medicare Buys Unneeded Anti-Psychotic Drugs for Nursing Homes

Medicare paid nursing homes to administer powerful anti-psychotic drugs to elderly residents who shouldn’t take the medicines, the program’s inspector general told Congress.

Medicare improperly paid about $116 million in the first half of 2007 for prescriptions filled in nursing homes for a class of drugs called atypical anti-psychotics, Daniel Levinson told the Senate Committee on Aging in a hearing today. Psychiatrists reviewing claims determined they weren’t for “medically accepted indications,” a violation of Medicare payment rules, he said.

Medicare is the U.S. program for the elderly and disabled. Brian Cook, a spokesman for Medicare, didn’t immediately respond to an e-mail seeking comment.

Anti-psychotics include AstraZeneca Plc (AZN)’s Seroquel and Eli Lilly & Co. (LLY)’s Zyprexa. The drugs are customarily used to treat conditions including schizophrenia and bipolar disorder. Levinson didn’t name specific drugs in his testimony.

The “large majority” of the prescriptions were written for elderly patients with dementia, who face an increased risk of death from using anti-psychotics, Levinson said.

“Medicare is paying for drugs that it should not,” he told the committee.

To contact the reporter on this story: Alex Wayne in Washington at awayne3@bloomberg.net

To contact the editor responsible for this story: Adriel Bettelheim at abettelheim@bloomberg.net

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