Drug Fraud Is Growing, And Costly, Problem For Medicare

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Source: Investor’s Business Daily

Medicare has a drug problem.

When Congress passed the Medicare Part D drug program, it inadvertently created a license to steal. A small minority of Medicare beneficiaries abuse prescription drugs for recreation and/or profit. In the process they also steal from taxpayers and their fellow Medicare drug plan enrollees — all of whom suffer higher premiums as a result.

Questionable drug use typically involves addictive painkillers that create a heroin-like euphoria. More than 16,000 people die each year from abusing pain relievers — double the number that die from cocaine and heroin.

For every death, there are 10 admitted to a treatment program for substance abuse and 32 emergency room visits. For each person who overdoses, 130 chronically abuse prescription drugs and 825 casually use them for nonmedical purposes.

Drug fraud costs insurers nearly $75 billion per year — about two-thirds of it from programs such as Medicare and Medicaid. That makes Uncle Sam the U.S.' biggest illicit drug dealer.

How does this happen? The most common way Medicare drug fraud occurs is by "doctor shopping." This involves seeing multiple doctors every month with bogus complaints about chronic pain. The drug-seekers get redundant exams and medical tests from each doctor, and ask them to prescribe powerful pain medications.

Unnecessary medical care to obtain drugs wastes far more than the cost of the drugs themselves. For every $1 worth of drugs lost due to fraud, an additional $41 is wasted for unnecessary physician visits, medical tests and ER visits to obtain the drugs.

To avoid detection, drug-seekers generally fill their prescriptions at multiple pharmacies to avoid being tracked or questioned. This tactic often fools individual doctors and pharmacies into believing their customers are not abusing prescription painkillers or reselling them.

But drug plans could easily detect drug-seeking behavior when reimbursing medical claims. The problem: federal law. Medicare drug plans aren't allowed to restrict the benefits of enrollees thought to be abusing or reselling prescription drugs.

What could stop this? A program called Lock-In would help. It's already been successfully used in most states for Medicaid enrollees. However, it requires a change in federal law to implement in Medicare — something that Kevin Brady, R-Texas, chairman of the House Ways and Means subcommittee on health, supports.

He recently circulated a draft bill, "The Protecting Integrity in Medicare Act of 2014," to help Medicare drug plans fight back against prescription drug fraud and abuse.

Under a Lock-In program, enrollees exhibiting unsafe, drug-seeking behavior — such as doctor shopping and using multiple pharmacies for getting pain drugs — could be required to designate one specific doctor for pain management and one specific pharmacy to dispense pain medications.

No other physician or pharmacy could prescribe or dispense pain medications — but all other Medicare benefits would remain unaffected.

Another good idea is to expand Lock-In to include more drugs than just narcotic pain relievers if needed. Case in point: A recent government investigation found Medicare spent $32 million for AIDS drugs in 2012 for 1,600 people with questionable drug claims — more than half of which did not appear to actually have HIV.

Many of these visited multiple doctors for prescriptions and/or filled their drugs at multiple pharmacies — often obtaining excessively high doses or excessively large quantities of costly HIV drugs.

What explains this rather odd behavior? Some of these drugs were likely resold on the illicit market due to their high resale value. Another possibility is unscrupulous (possibly bogus) pharmacies stole Medicare enrollees' identities and bilked Medicare for drugs never dispensed.

Scary thought: Sovaldi is a breakthrough Hepatitis C medication that has a 90% cure rate. The catch: it costs $1,000 per pill and requires an 84-pill course of treatment. Hepatitis C is rampant in the U.S. prison population, and among drug addicts and people with a criminal record.

How long do you think it will take the Medicare fraudsters to figure out that having a dozen different doctors prescribe Sovaldi — and then reselling it for, say, $50 per pill — could be a lucrative business model?

Medicare needs the ability to lock in troubled enrollees found to be abusing (or reselling) drugs and shut out fraudsters billing for bogus transactions. Otherwise, the rest of us will continue to pay for the abuse.

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