NCPA - National Center for Policy Analysis

Medicare Needs Anti-Fraud Tools

December 8, 2014

In order to allow institutional pharmacies to bill Medicare less frequently, the program allows pharmacies to bill Medicare up to 32 days after a patient's death. Devon Herrick, senior fellow at the National Center for Policy Analysis, says that many pharmacies bill the program just once a month, so the 32-day rule is convenient.

But one consequence of the rule has been drug fraud: a new government report reveals that pharmacies have filled HIV prescriptions for deceased beneficiaries. In 2012, 158 dead Medicare beneficiaries filled 348 different prescriptions for HIV drugs, costing the Medicare program nearly $300,000.

Who's filling the prescriptions? Identity thieves, says Herrick. Why? HIV drugs are expensive and can be resold on the black market. The same is true for pain medications, which have a high resale value, some of which can be sold on the street for 12 times their retail price. The government report only looked at HIV drugs -- less than one-quarter of 1 percent of Medicare drugs dispensed -- but Herrick says the problem likely exists across multiple drug classes. 

Lawmakers have recently turned their attention to drug fraud in Medicare. Representatives Kevin Brady (R-Texas) and Jim McDermott (D-Calif.) just introduced the "Protecting the Integrity of Medicare Act of 2014," which, among other things, would prohibit placing Social Security numbers on Medicare beneficiaries' cards, in order to reduce the likelihood of identity theft.

Source: Devon Herrick, "Medicare Buys Drugs for Dead People," Heartland Institute, December 3, 2014. 


Browse more articles on Health Issues