Medicare Drug Plans Need Tools to Combat Drug Abuse

Published October 9, 2014

In August, House Ways and Means Subcommittee on Health Chairman Kevin Brady introduced a bill, the Protecting Integrity in Medicare Act of 2014, designed to help Medicare drug plans reduce fraud. More than 16,000 people die annually from abusing pain relievers, according to the Centers for Disease Control and Prevention, double the number that die from abusing cocaine and heroin combined.

Drug diversion costs insurers nearly $75 billion per year, about two-thirds of it from public programs such as Medicare and Medicaid.

Current law prohibits Medicare drug plans from restricting the benefits of beneficiaries thought to be abusing or reselling prescription painkillers. The bill introduced by Brady would change that, allowing the drug plans to lock in suspected abusers to a single doctor and pharmacy for pain medications.

“Every senior in America is affected by Medicare fraud, waste, and abuse,” Brady (R-TX) said when releasing a draft of his bill. “It is devastating for those personally harmed, drives up premiums, and hastens insolvency for others.… [W]e must do more to protect the Medicare program and our nation’s seniors.” 

Growing Problem of Abuse

Abuse of opioid pain relievers is a growing problem for Medicare drug plans. The most common way enrollees obtain large numbers of addictive pain relievers is by “doctor shopping.” This involves seeing multiple doctors with complaints about chronic pain, having redundant medical tests performed and asking each physician seen to prescribe pain medication.

To avoid detection, beneficiaries generally fill their prescriptions at multiple pharmacies, hoping no doctor or pharmacy will question them. Although doctors and pharmacies may not realize a given patient is abusing prescription pain relievers, drug plans can detect it, but Medicare drug plans lack the authority to prevent this abuse.

Express Scripts is the largest pharmacy benefit manager (PBM) in the country. It has studied prescription drug abuse extensively in the plans it manages. According to Express Scripts, for every $1 worth of narcotic pain relievers lost to fraud, $41 more dollars are wasted due to unnecessary physician visits, unnecessary tests, and unnecessary emergency room visits to obtain the drugs.

On September 29 the Alliance for Health Reform and the Pharmaceutical Care Management Association cosponsored a Capitol Hill briefing to highlight the problem of prescription opioid drug abuse and to discuss ways to reduce fraud.

Speaker Jo-Ellen Abou Nader, senior director of fraud, waste, and abuse services at Express Scripts, explained to attendees: “PBMs … are uniquely positioned to not only identify but to investigate these cases for fraud, waste, abuse and to collaborate with our payers.”

She said a program to restrict the activities of drug-seeking enrollees would help Medicare drug plans reduce waste, fraud, and abuse. “We would love to see one in the Medicare world because our payers are really struggling. They are struggling because they do not have a way to control the behavior and the tools to be able to do that.”

‘Lock-In’ Cuts Abuse

The restriction program Abou Nader mentioned is a Safe Pharmacy “lock-in,” a program virtually every state Medicaid program has implemented to protect public health and reduce fraud. The program would require a change in federal law to allow Medicare drug plans to lock in enrollees suspected of abusing narcotic pain relievers.

Under a lock-in program, drug plans identify enrollees with suspicious claim patterns. Suspicious claims would likely involve Medicare enrollees shopping for narcotic pain relievers at multiple doctors and filling prescriptions at multiple pharmacies. Once identified, suspected enrollees would be locked in to a specific doctor for pain management, and a specific pharmacy to fill pain medications. No other physician or pharmacy could prescribe or dispense pain medications, but all other Medicare benefits would remain unaffected.

In August 2014 the U.S. Department of Health and Human Services Office of Inspector General issued recommendations to reduce questionable usage of narcotic pain relievers by Medicare beneficiaries. One of the recommendations was to establish a lock-in program.

Devon M. Herrick, PhD,( [email protected]) is a health economist and senior fellow at the National Center for Policy Analysis. He is the author of numerous reports on how to manage Medicare drug plans efficiently.