(CNN) The US government is warning insurance companies to be on the lookout for suspicious prescriptions of a drug being used in nursing homes across the country.

The medication, called Nuedexta, is the only drug approved by the Food and Drug Administration to treat a rare condition marked by uncontrollable laughing and crying, called pseudobulbar affect (PBA).

While drugmaker Avanir Pharmaceuticals has said that many dementia patients suffer from PBA, regulators are concerned that Medicare may be paying for the drug for unapproved and potentially fraudulent uses.

Prescribing for unapproved uses is not illegal, but diagnosing a patient with a condition in order to secure Medicare coverage is considered fraud.

A CNN investigation published in October found that Nuedexta's maker had been aggressively targeting frail and elderly nursing home residents for whom the drug may be unnecessary or even unsafe. CNN found multiple examples in which doctors had inappropriately prescribed Nuedexta to dementia patients, using a PBA diagnosis when it was actually being prescribed to control unruly behaviors.

In one case of alleged misprescribing, an Ohio physician who was a top prescriber of the drug was accused of accepting kickbacks in exchange for prescribing Nuedexta and fraudulently diagnosing patients with PBA to secure Medicare coverage. The physician has denied these allegations. The government previously confirmed that a federal investigation into his alleged conduct was launched, but it wouldn't comment on the current status.

Since Nuedexta came on the market in 2011, Avanir has generated millions of dollars in annual sales from prescriptions of the drug in nursing homes. And the federal government has been footing a large portion of the bill in the form of Medicare Part D prescription drug funding, for people 65 and over and the disabled.

Documents recently obtained by CNN through a public records request show that red flags have been raised to federal authorities about Nuedexta for years. Complaints filed to the FDA specifically related to marketing and advertising date back to 2012, when the agency received a strongly-worded letter from BlueCross BlueShield of Arizona.

"We would like to confidentially express concern about the marketing and 'educational efforts' by representatives/employees of Avanir Pharmaceuticals, Inc.," the insurance provider said in its letter. The insurer raised questions about whether PBA occurs in dementia patients and expressed concern that the drugmaker was misrepresenting Nuedexta as safe and effective in populations where it had not been adequately studied.

What should we investigate next? Email Blake Ellis and Melanie Hicken

"We believe that the manufacturer appears to be marketing Nuedexta far beyond the scope of the clinical evidence," the company stated in the letter.

BlueCross BlueShield of Arizona said in a statement to CNN that it felt compelled to detail these issues for the FDA. "As with any concern where member health and medical guidelines could potentially be compromised, it's our responsibility to act," it said.

In other complaints submitted to the FDA, individual names were redacted but several appeared to be from doctors or other medical professionals working in nursing homes.

"I am concerned with the off label promotion of Nuedexta for diagnosis other than PBA," stated a 2016 complaint. "Specifically they are targetting [sic] residents with Dementia with Behavioral Disturbances."

The person who submitted the complaint also described how they had overheard a salesperson "clearly but cleverly" promoting the drug for unapproved uses, which is illegal. This representative, the complaint said, would try to draw nurses' attention to a document listing PBA symptoms by leaving the pamphlet at nursing stations. The hope was that the nurses would then identify potential candidates to prescribe the drug.

"I want to know what can be done to stop this," the complaint stated. "Recently, things have really gotten out of control."

Avanir said in a statement that it "is committed to the safe, effective use of NUEDEXTA for the treatment of patients with PBA." The company said its promotional materials, including those used in doctors' offices and medical facilities, are subject to internal review and are submitted to the FDA. "We take seriously our role in educating patients, caregivers and health care providers about NUEDEXTA and PBA and we engage with CMS [Centers for Medicare & Medicaid Services] to ensure communications regarding the use of NUEDEXTA accurately reflect FDA approved labeling," the company stated, adding that Nuedexta is approved for treating PBA in all settings in which it occurs.

In March, CMS issued a memo specifically asking Medicare insurance providers to monitor prescriptions of the drug to ensure that it is being appropriately given to patients. The agency said that this memo, which it provided in a response to a CNN request, was meant to "inform plan sponsors about increases in utilization that may not be readily discerned or may relate to potential fraud."

The CMS memo reminds plan sponsors that Nuedexta is only approved to treat PBA and states that Part D insurers are legally required to ensure the drug is only being covered when prescribed for medically-accepted uses.

Two of the biggest Part D plan sponsors told CNN they had initiated safeguards in an attempt to ensure proper coverage of Nuedexta before receiving the latest CMS memo. CVSHealth introduced a so-called "prior authorization" for Nuedexta prescriptions in 2017, while Aetna said it instituted a prior authorization for 2018 "following an analysis of Nuedexta use over the past few years." Prior authorizations require patients to meet certain conditions and prescribers to provide additional information to the insurer, such as a patient's diagnosis, in order for a medication to be covered.

Another insurer, Priority Health, said it currently bars the coverage of Nuedexta for dementia patients on non-Medicare, commercial plans, based on the lack of clinical testing for this population. In response to the CMS memo, the insurer plans to add a prior authorization to its Medicare plans as well, though it said that because CMS is strict about what requirements can be included in these, it is unlikely that the same dementia restriction it has for commercial plans will be allowed. And BlueCross BlueShield of Arizona, the insurer that wrote the letter to the FDA, said it has had a prior authorization for Nuedexta in place since 2011 and requires documentation confirming a PBA diagnosis in order for Nuedexta claims to be approved. It said there are very limited numbers of these prescriptions being filled by its members and that it is "providing adequate oversight."

Avanir said in an email that prior authorization requests are common, and that Avanir wants to make sure that patients suffering from PBA have access to Nuedexta -- working with insurers to help facilitate this access.

These prior authorizations can hurt pharmaceutical sales by making it harder for prescriptions to be approved. Internal emails among Avanir employees, which were reviewed by CNN and detailed in previous reporting , showed that the sales force coached doctors and facility employees on how to fight for Medicare coverage of the drug if it was initially refused, with representatives celebrating when prior authorizations were lifted by specific insurance companies.

"I am really excite(d) to pass on this great news," said one employee in 2013 about a large insurer removing the prior authorization for Nuedexta. The employee said the action meant more than 4 million additional seniors could more easily be prescribed Nuedexta. "The entire field sales team should be proud of the efforts that went into demonstrating the appropriate demand for NUEDEXTA!!...This is a very important win for our company."

Correction: An earlier version of this story stated that an Avanir sales representative was "placing snacks like Slim Jims" on nursing stations to draw attention to lists of PBA symptoms. In the pharmaceutical industry, a "slim jim" can also refer to a marketing pamphlet. This article has been updated to reflect that "slim jim" was a reference to pamphlets.

Do you have information to share about Nuedexta or other drugs targeting the elderly? Email us: watchdog@cnn.com.