NCPA - National Center for Policy Analysis

Medicare Can't Fight Drug Fraud, but a New Bill Would Change That

December 5, 2014

In 2012, 158 deceased Medicare beneficiaries filled 348 HIV drug prescriptions -- after they were already dead. The prescriptions, worth $300,000, were recently discovered by the Inspector General of the Department of Health and Human Services. The report is not the first to find HIV drug fraud, says Devon Herrick of the National Center for Policy Analysis: another recently found that 1,600 Medicare beneficiaries were inappropriately filling prescriptions for HIV. Some of those beneficiaries were filling multiple prescriptions, while others did not even have HIV!

According to Herrick, drug fraud, while only a small minority of Medicare beneficiaries actually commit it, affects all beneficiaries, because it raises premiums for enrollees and makes the entire program more expensive, hurting taxpayers. He notes that most drug fraud consists of "doctor shopping" for painkillers, visiting multiple physicians in order to procure multiple pain prescriptions. It's a major waste of health care resources: for every $1 of drugs lost due to fraud, $41 is wasted on unnecessary doctor visits, medical tests and ER visits.

Drug plans can easily identify drug-seeking behavior, so why aren't drug plans preventing enrollees from filling all of these prescriptions? Because federal law doesn't let them. A new bill, just introduced this week by Kevin Brady (R-Texas) and Jim McDermott (D-Wash.), would change that. The Protecting Integrity in Medicare Act of 2014 would allow drug plans to limit individuals expected of drug fraud to using just one doctor and one pharmacy to fill prescriptions for narcotic pain relievers. Most states have similar rules in their Medicaid programs, says Herrick, who suggests expanding the reach of such programs to target more than just painkillers.

The NCPA recently published a study by Herrick on combating Medicare drug fraud with "lock-in" programs.

Source: Devon Herrick, "Drug Dealers, Addicts and Zombies are Defrauding Medicare,", December 3, 2014. 


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