Fraud, Waste, and Abuse Impact Costs, Care, and Safety

Atlanta—Each year, billions of dollars are lost to Medicare fraud. In addition to the financial burden, instances of waste and abuse jeopardize both quality of care and patient safety. Raising awareness of the problem is as important a tool in dealing with the issue as are education, training, and proactive deterrent measures. At a Contemporary Issues session at the AMCP meeting titled Fraud, Waste, and Abuse: Prevention and Regulatory Compliance, Anne Louise Smith, AHFI, chief, Corporate Investigations, CVS Caremark, titled her remarks “Fraud, Waste, and Abuse: Can You Untangle Them?” She began by defining fraud as the “illegal acquisition of prescription drugs for personal use or profit. This definition excludes theft, burglary, backdoor pharmacies, or illegal importation or distribution of prescription drugs.” The “cast of characters” who may be involved in prescription fraud include youth, women, older adults, addicts, and healthcare workers, Ms. Smith said. She defined waste as incidents of “prescription drugs ordered when not needed (autofill features or hoarding), medications filled after patient death or discontinuation of treatment, large day supplies filled when the drug has not been shown effective, and medications automatically given because the patient says they have been on them on the past, yet there is no demonstrated need.” She said the cast of characters involved in waste of prescription drugs includes the elderly, veterans, dual-eligible beneficiaries, and those whose medical cases are “very complicated.” Waste is responsible for increased costs to insurers, the government, and the environment, she added. The definition Ms. Smith provided for abuse included the “use of a prescription medication in a way not intended by the prescribing doctor” [MayoClinic.com], “illegal or excessive drug use: deliberate use of an illegal drug or too much of a prescribed drug” [Encarta World English Dictionary], and “the use of any chemical substance (especially controlled substances such as psychoactive dugs, narcotics, hormones, prescription medication, or over-the-counter medicines) in a way that society deems harmful to the user or others” [wordiq.com]. She continued the presentation by describing the cycle of pharmaceutical fraud, waste, and abuse (FWA) as experienced by a pharmacy benefit manager (PBM). The first step is identification of the problem through system edits, trend analyses, and agency sources, leading to assessment of the situation through clinical, provider, and patient reviews. The next step is case development, utilizing interviews, site visits, and pharmacy audits, followed by case reporting of pharmacy and provider claims. The cycle leads eventually to a referral to local, state, or federal law enforcement. Global detection, as outlined by Ms. Smith, involves system edits based on user/client-specific thresholds, ad hoc reporting, resources such as Internet searches, prior authorizations, and parallel comparison of medical and pharmaceutical claims. Variations of member pharmaceutical fraud include what Ms. Smith characterized as “doctor shopping, drug diversion, prescription forgery/alteration, identity theft and ineligibility, and direct claim billing issues.” Prescriber fraud may be associated with billing for samples, double billing of medical and pharmacy benefits, and prescribing for personal gain, such as profiting from sales of the drugs, she added. Pharmacy fraud may include billing for brand-name drugs versus generic medications, partial fills, phantom prescription orders, purposeful inappropriate billing of compounded prescriptions, or double billing of medical and pharmacy. She gave attendees a lesson in developing a case of possible FWA. The steps include locating the data by requesting specific data from the PBM, organizing the data by identifying the targeted drugs, top prescribers, and pharmacies, and performing a data analysis to determine the time period of the potential fraud and examine the prescription history against the medical history to establish if the diagnosis or treatment is appropriate for the targeted medication. She concluded by listing some “fraud-busting measures,” including drug limitations, edits for fraud detection, coordination of medical and pharmacy claims, narcotic trending and maintenance drug trending, and networking with clinicians, investigators, and law enforcement entities to strengthen relationships among those groups.