NCPA - National Center for Policy Analysis

Medicare Drug Plans Need the Tools to Fight Fraud

October 29, 2014

More than 16,000 people die every year from abusing pain relievers, according to research from the Centers for Disease Control. And for every one prescription drug death, 10 people are admitted for prescription drug substance abuse treatment and there are 32 related emergency room visits. Indeed, prescription drug abuse is not a small problem: for every death, there are 130 other people chronically abusing opioid pain relievers and 825 nonmedical users of opioids.

As NCPA Senior Fellow Devon Herrick explains in a new report, prescription drug abuse is made possible through fraud; individuals may visit multiple doctors for pain prescriptions and fill the prescriptions at different pharmacies, evading detection, in order to feed their own addictions or sell drugs to others. But while individual doctors and pharmacies may not recognize that a patient is abusing drugs, drug plans can easily identify questionable drug utilization and detect potential fraud. The problem, explains Herrick, is that Medicare Part D drug plans are not allowed to take action on such fraud; while state Medicaid programs allow drug plans to restrict enrollees with questionable drug utilization to using just one doctor or one pharmacy, Medicare Part D plans have no such authority.

As a result, there is little that Part D drug plans can do to combat prescription drug abuse, which, in addition to being unsafe, is expensive: drug diversion costs insurers $75 billion annually by one estimate. It requires countless unnecessary office visits and 1.2 million emergency room visits each year. An individual who is "doctor shopping" in order to obtain numerous prescriptions might visit a dozen doctors each month, undergoing unnecessary and redundant tests at each visit.

Herrick argues that Medicare Part D should institute a "Lock In" program, which would allow drug plans to restrict an individual who has demonstrated questionable drug-seeking behavior to using just one doctor or one pharmacy -- or both -- for that particular drug. State Medicaid programs which have these plans (and 46 states have plans that lock certain Medicaid enrollees into specific providers) have been able to generate cost savings and reduce narcotic drug use.

Source: Devon M. Herrick, "Medicare Drug Plans Need the Tools to Fight Prescription Drug Fraud," National Center for Policy Analysis, October 29, 2014.  


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