The so-called ‘War on Drugs’ dates back to the 1970s, when draconian laws were passed mandating lengthy prison sentences for people caught trafficking heroin and cocaine. Republicans and Democrats alike now question whether the Drug War is winnable — and whether the social benefits exceeds the social costs of waging the war. However, there is one neglected area of the drug war that most parties should agree is probably worth the effort — Medicare.
Medicare has a drug problem. A small minority of Medicare beneficiaries abuse prescription drugs for recreation — or for profit. Some acquire drugs they don’t need, intending to resell them. Medicare drug abuse jacks up costs for the Medicare program, for taxpayers and for their fellow Medicare drug plan enrollees who pay higher premiums as a result.
Prescription drug fraud costs insurers nearly $75 billion per year — about two-thirds of it from public programs such as Medicare and Medicaid. That makes Uncle Sam the biggest illicit drug dealer in the country. Reps. Kevin Brady, R-Tex., and Jim McDermott, D-Wash., the chairman and ranking member of the House Ways and Means Subcommittee on Health, recently introduced The Protecting Integrity in Medicare Act of 2014, a bipartisan bill which would allow Medicare drug plans fight back against prescription drug fraud and abuse.
Prescription drug abuse typically involves prescription painkillers that create a heroin-like euphoria. More than 16,000 people die annually from abusing pain relievers — twice the death toll of cocaine and heroin abuse combined. For every death, there are ten others admitted to a treatment program for substance abuse and 32 emergency room visits. For each person who overdoses, 130 chronically abuse prescription drugs and 825 casually use them for non-medical purposes.
Fortunately, Medicare can be cleaned up without draconian measures that include locking up seniors. Rather, a few individuals would be “locked-in” to one doctor and pharmacy for pain meds. The most common way Medicare drug fraud occurs is through ‘doctor shopping.’ This involves seeing multiple doctors every month with complaints about chronic pain. In the process, drug-seekers receive redundant medical exams from each doctor, and ask each one to prescribe powerful pain medications.
To avoid detection, drug-seekers fill their prescriptions at multiple pharmacies — hoping that no one pharmacy will track their behavior and question them. But Medicare drug plans could easily detect drug-seeking behavior when processing pharmacy claims. In other words, drug-abusers leave a paper trail. A Lock-In program in Medicare would require a change in federal law to let drug plans police the benefits of enrollees thought to be abusing or reselling prescription drugs.
Under a Lock-In program, enrollees who exhibit drug-seeking behavior could be asked to designate one and only one doctor for pain management and one specific pharmacy to dispense pain medications. All other Medicare benefits would remain unaffected.
The pilfered painkillers themselves are only a small part of the problem; unnecessary medical care to obtain drugs wastes far more than the cost of the drugs themselves. For every $1 worth of drugs lost due to fraud, an additional $41 is wasted on unnecessary physician visits, redundant medical tests and unnecessary ER visits to obtain the drugs. This program has already been successfully implemented in most states’ Medicaid programs.
According to the HHS Office of Inspector General (OIG), it is also good idea to police the abuse of not only narcotic pain relievers but other drugs, too. An OIG investigation recently found Medicare spent $32 million in 2012 for AIDS drugs used by 1,600 patients with questionable drug usage. Nearly half of these individuals did not actually have HIV, and some of the prescriptions were filled for people who had already died. The OIG believes some of these drugs were likely resold on the illicit market due to their high resale value. Another possibility is that unscrupulous (possibly fake) pharmacies stole Medicare enrollees’ identities and bilked Medicare for drugs that were never dispensed.
The problem of drug diversion fraud is likely to get worse. A new breakthrough Hepatitis C treatment, called Sovaldi, costs $1,000 per pill and requires an 84-pill course of treatment. Hepatitis C is rampant among drug addicts and those who have spent time in prison. How long do you think it will take drug addicts and people with criminal records to figure out that one can make a lot of money by getting a dozen different doctors to prescribe Medicare-subsidized Sovaldi and then resell the pills for pennies on the dollar?
Lawmakers can help Medicare put a stop to this fraud. Otherwise, the rest of us will continue to pay for the abuse.
Devon M. Herrick, PhD is a health economist and senior fellow at the National Center for Policy Analysis. He is the author of a study on protecting Medicare drug plans against fraud. Thinking of submitting an op-ed to the Washington Examiner? Be sure to read our guidelines on submissions for editorials, available at this link.
