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GAO Finds Abuse in Medicare Drug Program, Mostly Younger Patients Admitted for Disabilities

Less than 30% by senior citizens: of 170,000 prescribed drugs from 5 or more docs in 2008, about 120,000 (71%) were eligible for Medicare Part D based on a disability - see hearing video

Click here to view podcast of hearing.

Oct. 5, 2011 – Prescription drug abuse in Medicare Part D is a serious and growing public health problem, according to a Government Accountability Office report presented yesterday to a senate subcommittee hearing. The report points out, however, that over 70 percent of the abuse is not by senior citizens in the program but by younger Americans in Medicare based on a disability.

This testimony, presented by Gregory D. Kutz, Director, Forensic Audits and Investigative Services at the GAO, discussed the results of the GAO investigation of fraud and prescription drug abuse in Medicare Part D.

It was presented to the Subcommittee on Federal Financial Management, Government Information, Federal Services, and International Security of the Senate Committee on Homeland Security & Government Affairs. The hearing was chaired by Sen. Thomas R. Casper, (D-DE) and the Ranking Member Sen. Scott P. Brown.

According to the Centers for Disease Control and Prevention, drug overdoses, including those from prescription drugs, are the second leading cause of deaths from unintentional injuries in the United States, exceeded only by motor vehicle fatalities.

Unlike addiction to heroin and other drugs that have no accepted medical use, addiction to some controlled substances can be unknowingly financed by insurance companies and public programs, such as Medicare Part D, according to the testimony.

Witness Testimony

   ● Gregory D. Kutz [view testimony]
Director, Forensic Audits and Investigative Services
U. S. Government Accountability Office

   ● Mr. Jonathan Blum [view testimony]
Director, Center for Drug and Health Plan Choice
U.S. Department of Health and Human Services

   ● Louis Saccoccio [view testimony]
Executive Director
National Health Care Anti-Fraud Association

The report describes indications of doctor shopping in the Medicare Part D program for 14 categories of frequently abused prescription drugs.

The objectives of the forensic audit and related investigation were to

(1) determine the extent to which Medicare beneficiaries obtained frequently abused drugs from multiple prescribers,

(2) identify examples of doctor shopping activity, and

(3) determine the actions taken by the Centers for Medicaid & Medicare Services (CMS) to limit access to drugs for known abusers.

“Our analysis found that about 170,000 Medicare beneficiaries received prescriptions from five or more medical practitioners for the 12 classes of frequently abused controlled substances and 2 classes of frequently abused non-controlled substances in calendar year 2008,” according to Kutz.


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This represented about 1.8 percent of the Medicare Part D beneficiaries who received prescriptions for these 14 classes of drugs during the same calendar year.

These individuals incurred approximately $148 million in prescription drug costs for these drugs, much of which is paid by the Medicare program.

We also found the following:

(1) Most of these 170,000 Medicare beneficiaries who were prescribed prescriptions from five or more practitioners were eligible for Medicare Part D benefits based on a disability. Specifically, approximately 120,000 Medicare beneficiaries (about 71 percent) were eligible for Medicare Part D benefits based on a disability.

(2) Of these 170,000 beneficiaries, approximately 122,000 beneficiaries (72 percent) received a Medicare Low-Income Cost-Sharing (LICS) subsidy.

Doctor Shopping

“We obtained additional information on 10 of the Medicare Part D beneficiaries that showed indications of doctor shopping. In each of the 10 cases, we found evidence that the beneficiary was acquiring highly abused drugs through doctor shopping,” the GAO reported.

“We also found that in each example physicians were not aware that their patients were receiving drugs prescribed by other prescribers.

DEA's definition of doctor shopping specifies an individual receiving more of a drug than intended by any single physician.

In several examples physicians stated that they would not have prescribed the drugs if they were aware that the patient was receiving the same class of drugs from other sources, the report says.

CMS requires Part D plans to perform retrospective drug utilization review (DUR) analysis to identify prior inappropriate or unnecessary medication use and provide education, such as alert letters, to the prescribers involved.

By analyzing historical prescription claims data, the drug plans can identify individuals who are likely obtaining excessive amounts of highly abused drugs or potentially seeking such drugs from multiple medical practitioners.

However, according to CMS Part D program officials, federal law does not authorize Part D plans to restrict the access of these individuals, leaving little recourse for preventing known doctor shoppers from obtaining hydrocodone, oxycodone, and other highly abused drugs.

“In our report, we recommended that the Administrator of CMS should review our findings, evaluate the existing DUR program, and consider additional steps, such as a restricted recipient program for Medicare Part D that would limit identified doctor shoppers to one prescriber, one pharmacy, or both for receiving prescriptions,” Kutz said.

“We stated that CMS should consider the experiences from Medicaid and private sector use of such restricted recipient programs, including weighing the potential costs and benefits of instituting the control.

“We also stated that along with a restricted recipient program, CMS should consider facilitating the sharing of information on identified doctor shoppers among the Part D drug plan sponsors so that those beneficiaries cannot circumvent the program by switching prescription drug plans.

“Finally, we stated that in considering such controls, CMS should seek congressional authority, as appropriate.”

The title of the report is “Costs of Prescription Drug Abuse in the Medicare Part D Program.”

GOA Reports:

Medicare Part D: Instances of Questionable Access to Prescription Drugs
GAO-12-104T, Oct 4, 2011

Summary (HTML) Full Report (PDF, 13 pages) Accessible Text

This testimony discusses the results of our investigation of fraud and prescription drug abuse in Medicare Part D. Prescription drug abuse is a serious and growing public health problem.

Medicare Part D: Instances of Questionable Access to Prescription Drugs
GAO-11-699, Sep 6, 2011

Summary (HTML) Highlights Page (PDF) Full Report (PDF, 32 pages) Accessible Text Recommendations (HTML) Podcast










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