Transcript of Louis Saccoccio’s testimony on Medicare Part D prescription drug abuse
Transcript of testimony by Louis Saccoccio, Executive Director of the National Health Care Anti-Fraud Association, on Medicare Part D prescription drug abuse and fraud before Subcommittee on Federal Financial Management on Oct. 4, 2011:
“The amount of health care dollars spent on prescription drugs in this country continues to grow.
“National health expenditure data reveal that in 2009 $250 billion was spent on prescription drugs and that by the year 2020, that spending is projected to more than double, reaching more than $500 billion. NHCA believes that the amount of health care dollars spent on prescription drugs – as that amount continues to grow – the problem of prescription drug diversion and fraud will also continue to grow as a segment of the total health care fraud problem.
“While doctor shopping by patients is the primary focus of the GAO report released today, NHCA believes it’s important to acknowledge that prescription drug fraud and diversion can take many forms.
“At its most complex, perpetrators of drug diversion undertake a multifaceted criminal enterprise directed at reselling drugs in high volumes for large profits on the streets, with the costs of the drugs fraudulently billed to health insurers both public and private.
“Significantly, the money lost to prescription drug fraud through the payment of unnecessary or bogus pharmacy claims is only part of the financial impact of this problem.
“In the process of obtaining a prescription, a patient will typically generate claims for related medical services. Insurers often find that they have paid not just for unnecessary drugs but also for related emergency room visits, in-patient hospital stays, visits to physician offices and clinics, and diagnostic testing – all based on injuries, illnesses, and conditions feigned in order to obtain a prescription.
“Then there are the additional costs associated with treating the addictions and the overdoses arising from this behavior.
“More importantly, the financial losses due to prescription drug fraud are compounded by instances of patient harm and sometimes death – insidious side effects of this fraud.
“The Office of National Drug Control Policy calls prescription drug abuse the nation’s fastest growing drug problem, and the Centers for Disease Control Prevention classifies prescription drug abuse as an epidemic.
“Of course, prescription drug abuse in itself does not necessarily indicate fraud. Nevertheless, in many instances, the drugs are obtained through fraud.
“A cogent example of the human toll of this problem was all too clear in a recent case in Kansas. In October 2010, a Kansas physician and his wife, a licensed practical nurse who also acted as the office manager of her husband’s pain management clinic, were sentenced to 30 and 33-years in federal prison respectively for illegally distributing prescription pain medications to patients who overdosed. A four-year investigation of this pill mill uncovered evidence of extensive over-prescribing of controlled substances. More than 100 drug overdoses requiring visits to Wichita-area emergency rooms, resulting in the death of at least 68 persons, are linked to this case as well as more than $4 million in Medicaid and private insurance claims. After an eight-week trial, the jury convicted the couple finding that they directly contributed to the deaths of several patients. This case demonstrates that prescription drug fraud is a dangerous crime that can yield tragic results, including death.
“Private insurers have acknowledged drug diversion and doctor shopping as a fraud trend for the last several years. Their anti-fraud efforts regularly identify dangerous prescription drug abuse by patients. In my written testimony, we’ve provided examples of how two insurers are using monitoring, letter notifications to prescribers, and restricted recipient programs with success.
“NHCA also supports state prescription drug monitoring programs that help both to identify fraud and to ensure patient safety. NHCA recommends that state investments in those monitoring programs be incentivized whenever possible.
“Also, NHCA recommends taking full advantage of interoperability opportunities and information sharing among prescription drug monitoring programs for states sharing borders with one another.
“For instance in August 2011, Kentucky Gov. Steve Beshear announced the formation of an interstate task force with border states Tennessee, West Virginia, Ohio committed to targeting fraudulent or abusive prescription drug activities in those states.
“NHCA also is encouraged by the memorandum dated Sept. 28 issued by CMS to Medicare Part D sponsors asking for their comments on how the Medicare Part D program can more successfully exert control over payment for inappropriate or over-utilization of drugs. In addition to responding to the ideas outlined in the memo, NHCA suspects that many Part D sponsors will suggest that a restricted recipient program be considered to curb drug seeking behavior due to drug abuse or diversion.
- cspan.org: Subcommittee on Federal Financial Management hearing on drug abuse by Medicare Part D beneficiaries
- gao.gov: Medicare Part D: Instances of questionable access to prescription drugs – Oct. 4, 2011 testimony (PDF)
- gao.gov: Medicare Part D: Instances of questionable access to prescription drugs – Sept. 6, 2011 report (PDF)
- carper.senate.gov: Sens. Caper, Brown release report on prescription drug abuse in Medicare Part D
- Center for Medicare and Medicaid Services (CMS)
- Overview of Medicare Part D Insurance
- National Health Care Anti-Fraud Association