Medicaid Prescription Drug Abuse Alleged in Illinois and Other States

October 05, 2009

Tens of thousands of Medicaid recipients and doctors were involved in potentially fraudulent or abusive purchases of prescription drugs in 2006 and 2007 in five states, including Illinois, according to a new report by the Government Accountability Office (GAO).

The GAO examined cases of potential “doctor shopping,” in which a patient used at least six different doctors. Visits to numerous prescribers can be a way to disguise an addiction or obtain drugs to fraudulently sell, the report said. The GAO also examined cases involving deceased patients or prescribers and cases in which drug claims were paid even though the doctors or pharmacies had been banned from prescribing or dispensing to Medicaid recipients.

The report did not provide a breakdown of the number of potentially fraudulent or abusive cases by state. However, it provided detailed examples of 25 questionable Medicaid claims, including six in Illinois, based on interviews with pharmacy employees, prescribers, law enforcement officials and recipients. Certain cases were referred to the federal Drug Enforcement Administration and the states for further criminal investigation.

In one case in Illinois, a Medicaid recipient over two years received 3,200 pills used to treat attention-deficit/hyperactivity disorder, an amount equivalent to a six-year supply, according to the GAO. The prescriptions for Concerta and Ritalin were obtained from 25 doctors and filled by 11 drug stores. The recipient’s mother said she was addicted to Ritalin, which was prescribed to her son, and took the child to numerous doctors to obtain additional prescriptions. The mother and son were banned from several medical practices because of doctor shopping and the mother has an extensive criminal history involving controlled substances. Illinois has never placed the son on a restricted recipient program because the State did not identify him as a doctor shopper, the GAO said.

The report analyzed Medicaid claims for prescription drugs in federal FY2006 and FY2007 from California, Illinois, New York, North Carolina and Texas, which together accounted for over 40% of total Medicaid prescription drug payments in those two years. Medicaid prescription drug payments totaled more than $23 billion in federal FY2008, ended September 30, or about 7% of total Medicaid expenditures. In Illinois, Medicaid prescription drug costs totaled approximately $800 million in federal FY2008, or about 6% of the $12.4 billion spent on the Medicaid program. (For a detailed discussion of the Illinois Medicaid program, see the report released in May 2009 by the Civic Federation’s Institute for Illinois’ Fiscal Sustainability.)

The GAO found that 65,000 Medicaid recipients in the five states visited six or more doctors to obtain 10 of the most frequently abused prescription drugs. One beneficiary saw 112 different doctors to obtain one of the drugs. Claims for these painkillers, sedatives and stimulants cost Medicaid about $63 million. The 65,000 beneficiaries made up less than 1% of the total number of Medicaid recipients in the five states, and the $63 million represented about 6% of payments for the prescription drugs analyzed by the GAO. Although some of this activity was abusive, the report said beneficiaries may have justifiable reasons for receiving prescriptions from multiple doctors, such as seeing specialists or several doctors in the same medical group.

The GAO analysis showed that Medicaid paid $200,000 for prescriptions for 1,800 recipients after they died. In addition, Medicaid paid about $500,000 for prescriptions written after the doctors had died. The extent to which the claims were paid because of fraud is not known, the GAO said. In one instance in which a pharmacy dispensed drugs to over 50 Medicaid recipients who had died, the nursing homes where they lived did not notify the pharmacy that they were deceased.

Sixty-five doctors and pharmacies in the five states had been barred or excluded from federal health care programs when they wrote or filled Medicaid prescriptions, according to the GAO. Nevertheless, Medicaid approved claims worth about $2.3 million.

The GAO concluded that the states did not have a comprehensive approach to preventing fraud and abuse relating to prescription drugs. The federal Department of Health and Human Services’ Centers for Medicare and Medicaid Services (CMS), which oversees the Medicaid program, has provided “limited guidance” on the issue to the states, the GAO said. The report recommended that CMS consider issuing guidance to ensure that states have programs and systems in place to identify and prevent abuses.