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News February 2014

Washington Watch

This is Your Medicare on Drugs: Fraud and Abuse Rampant in Part D Drug Program. Will Proposed New Rules Bring Much-needed Reform?

By Alan M. Schlein

The data analysis also showed widespread prescribing of a muscle-relaxant drug called carisoprodol, also known as Soma, which was pulled from the European market in 2007. In 2010 alone, health-care professionals wrote more than 500,000 prescriptions for the drug to patients 65 and older. This drug is on the American Geriatrics Society’s list of drugs seniors should avoid.

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For decades, Medicare has given much higher priority to making medications easily accessible to seniors and the disabled than to weeding out dangerous providers. Under the new rules – and for the first time – the agency would have the authority to kick out physicians and other providers who engage in abusive prescribing. It could also take this action if providers’ licenses have been suspended or revoked by state regulators or if they are restricted from prescribing painkillers and other controlled substances.

Since last year, when Edward Snowden disclosed the National Security Agency’s global surveillance efforts through his release of national security documents, the nation has been focused on big data – all the information gathered by the government and private companies to help them spy on you or market information sent to you, or both.

But what if using big data resulted in helping millions of seniors fix problems of Medicare fraud? That process is underway, due, in part, to news stories from a team of reporters from the non-profit news operation, Pro Publica, which took Medicare’s own data, analyzed it and found major holes in the way doctors are regulated. Medicare is beginning to make changes to its Part D drug program as a result of the investigation’s findings.

While lawmakers strongly disagree about the Affordable Care Act, Medicare’s drug program – which provides medicine to 36 million seniors and the disabled – has been praised as a tremendous success story for government health care. But there are some serious problems with the Medicare drug program, costing taxpayers billions of dollars due to unnecessarily expensive prescribing over the program’s eight-year history, according to an investigative series by Pro Publica.

Uncovering and analyzing never-before-released government prescription records, reporters Tracy Weber, Charles Ornstein and Jennifer LaFleur of Pro Publica, found that doctors and other health professionals across the country have been regularly prescribing large quantities of drugs known to be potentially harmful and addictive to their patients, while Medicare and other federal and state government agencies have done little to detect or deter these hazardous prescribing patterns.

Pro Publica is an innovative model of what the future of news investigations will look like in the online age. It is a non-profit newsroom dedicated to exposing abuses of power and betrayals of the public trust by government, business and other institutions to spur reform. The group, founded six years ago, has already won two Pulitzer Prizes in just five years of operation.  “The Prescribers” investigation showed that Medicare failed to police Medicare Part D, the prescription drug law, allowing doctors to prescribe obscene amounts of inappropriate  medications.

The investigation also revealed that Medicare – in an effort to get drugs into patients’ hands – has failed to properly monitor safety of the drugs and how they are provided to the elderly.

he Pro Publica study also revealed that because prescriptions were covered by Medicare, doctors gave out brand-name drugs instead of cheaper generics, wasting billions of dollars. The waste is exacerbated by a provision written into the drug program, allowing low-income patients to pay less than $7 per prescription regardless of a medication’s cost. The unintended consequence is that doctors can dole out name brands with little fear of pushback from patients about price.

Using the Freedom of Information Act, the Pro Publica reporters obtained drug prescription information for every doctor in the Part D program for the past five years – 1.2 billion in prescriptions in 2011 alone. Then, they looked at the doctors who were prescribing drugs in different ways from their peers – by choosing risky or costly drugs or by prescribing much larger amounts of these drugs to their patients – suggesting fraud.

Among their key findings:

  • Pro Publica identified scores of doctors whose prescribing in Medicare’s drug program bore the hallmarks of fraud.
  • Medicare’s failure to follow up on unusual prescribing patterns has allowed fraud to flourish.
  • The cost of one Miami doctor’s medications jumped from $282,000 to $4 million in one year, but her lawyer said Medicare didn’t ask any questions.
  • Scammers sometimes charge Medicare for drugs they don’t dispense and then resell them to pharmacies and wholesalers.
  • Investigators say Medicare fails to block doctors’ IDs when there’s a suspicion of fraud, allowing the doctors to keep on prescribing.
  • Medicare’s fraud-fighting system is so convoluted that most cases are dropped without referral to prosecutors.

In many cases, it’s not even doctors prescribing the meds – despite the law which requires it. An Inspector General’s report from the Department of Health and Human Services released recently identified more than 417,000 prescriptions paid for by Medicare purportedly written by massage therapists, athletic trainers, interpreters and others who aren’t allowed to prescribe drugs. The IG report found nearly 30,000 prescriptions for painkillers and other easily abused drugs that appeared to be prescribed by individuals who had no such authority to do so.

The Pro Publica investigation reveals that Medicare repeatedly failed to act against doctors and health care providers who have been suspended or disciplined by other regulatory authorities. One example shows the complicated nature of disciplining doctors who appear to be abusing the prescription system.

Miami psychiatrist Fernando Mendez-Villamil had written more than 96,000 prescriptions for mental health drugs from July 2007 to March 2009, more than anyone else in Florida’s Medicaid program. In April 2010, Florida Medicaid expelled Mendez-Villamil without publicly revealing its reason. But an internal memo cited concerns about “the volume of patients being seen and the medications being prescribed.”

Earlier this year, the Florida medical board accused him of giving patients as young as three years old, a variety of mental health drugs without properly diagnosing or monitoring them. But throughout his ordeal with Florida medical officials, Mendez-Villamil has remained in good standing with Medicare.

Pro Publica found that he wrote 6,100 prescriptions for antipsychotics in 2009 and 5,500 more in 2010. While they couldn’t reach Mendez-Villamil for comment, his attorney, Mike Gennett, denied that his client mistreated patients. "We categorically deny any wrongdoing by Dr. Mendez-Villamil in regards to his care of patients or prescribing of medications," he wrote Pro Publica in an email. Mendez-Villamil has requested a formal hearing on the medical board complaint.

After some prodding from Iowa Senator Charles Grassley, Health and Human Services Secretary Kathleen Sebelius, in March 2010, assured Grassley that Mendez-Villamil was under investigation by Medicare’s fraud contractor.

But more than three years later, there has been no public action. Medicare didn’t respond to Pro Publica’s recent questions about Mendez-Villamil, saying it does not discuss ongoing administrative or criminal investigations. But Grassley said it is “kind of ridiculous” for Medicare and Medicaid to take such different actions.

One of the more disturbing of Pro Publica’s findings is that Medicare’s Part D program is vulnerable because it requires insurance companies to pay for prescriptions issued by any licensed prescriber and filled by any willing pharmacy within 14 days. Insurers generally must cover even suspicious claims before investigating, an approach called "pay and chase." By comparison, these same insurers have more time to review questionable medication claims for patients in their non-Medicare plans.

Another finding in the Pro Publica investigation revealed that Medicare is wasting hundreds of millions of dollar a year by failing to rein in doctors who routinely give patients pricey name-brand drugs when cheaper generic alternatives are available. Analyzing the prescribing habits of 1.6 million practitioners nationwide, the reporters found that a tiny fraction of them are having an outsized impact on spending in Medicare’s Part D drug program. And many of them have a conflict of interest as well, accepting thousands of dollars in promotional or consulting fees from drug makers.

Pro Publica looked at the data and found that just 913 doctors could have saved taxpayers $300 million in 2011 by prescribing more like their peers. These doctors – mostly internists, family medicine and general practice physicians – wrote at least 5,000 prescriptions that year, including refills, and ranked among the program’s most prolific prescribers. The U.S. military, the Department of Veterans Affairs and some private health plans put limits on name-brand prescribing, but Medicare’s Part D hasn’t done that.

One physician, a Miami psychologist, has given hundreds of elderly dementia patients the same antipsychotic, despite the government’s most serious “black box” warning that it increases the risk of death. He believes he has no other drug options.

The data analysis also showed widespread prescribing of a muscle-relaxant drug called carisoprodol, also known as Soma, which was pulled from the European market in 2007. In 2010 alone, health-care professionals wrote more than 500,000 prescriptions for the drug to patients 65 and older. This drug is on the American Geriatrics Society’s list of drugs seniors should avoid.

Now, as a result of the ground-breaking reporting, Medicare is planning to make changes. The Centers for Medicare and Medicaid Services, (CMS) recently proposed rules designed to better control – and potentially ban – doctors engaged in fraudulent or harmful prescribing.

For decades, Medicare has given much higher priority to making medications easily accessible to seniors and the disabled than to weeding out dangerous providers. Under the new rules – and for the first time – the agency would have the authority to kick out physicians and other providers who engage in abusive prescribing. It could also take this action if providers’ licenses have been suspended or revoked by state regulators or if they are restricted from prescribing painkillers and other controlled substances.

Medicare is also planning to tighten a loophole that has allowed doctors to prescribe drugs to patients even when they are not officially enrolled with Medicare. Under the new rules, doctors and other providers must formally enroll in Medicare – and verify their credentials and also disclose professional discipline and criminal history if they want to write prescriptions to anyone in Part D. The new rules are scheduled to take effect Jan. 1, 2015.

 

Useful Links from the Pro Publica Investigation

To read more about “The Prescribers” series from Pro Publica, go to their website at http://www.propublica.org/series/prescribers. Pro Publica has created an online tool, Prescriber Checkup, to allow anyone to search for individual providers and see which drugs they prescribe and to see if the doctor has any experience with the drug he is prescribing. http://www.propublica.org/article/how-prescriber-checkup-can-help-you

Two additional investigations by Pro Publica are also worthwhile reading for seniors. A patient safety series found that while more than a million patients suffer harm each year while being treated in the U.S. health care system, studies show that nine of 10 patients seeking a medical malpractice attorney won’t find one – women, children and the elderly in particular. Not surprisingly, doctors won’t talk about another doctor’s medical error because it could cost them business or have consequences. Now efforts are being made to break that code of silence. For more: http://www.propublica.org/series/patient-safety.

A second investigation about assisted living raises questions about the safety of seniors in assisted living facilities. http://www.propublica.org/series/life-and-death-in-assisted-living

 

Alan Schlein runs DeadlineOnline.com, an internet training and consulting firm. He is the author of the bestselling “Find It Online” books.

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