Part D Fraud

‘Let the Crime Spree Begin’: How Fraud Flourishes in Medicare’s Drug Plan by Tracy Weber and Charles Ornstein.

From the post:

With just a handful of prescriptions to his name, psychiatrist Ernest Bagner III was barely a blip in Medicare’s vast drug program in 2009.

But the next year he began churning them out at a furious rate. Not just the psych drugs expected in his specialty, but expensive pills for asthma and high cholesterol, heartburn and blood clots.

By the end of 2010, Medicare had paid $3.8 million for Bagner’s drugs — one of the highest tallies in the country. His prescriptions cost the program another $2.6 million the following year, records analyzed by ProPublica show.

Bagner, 46, says there’s just one problem with this accounting: The prescriptions aren’t his. “All of that stuff you have is false,” he said.

By his telling, someone stole his identity while he worked at a strip-mall clinic in Hollywood, Calif., then forged his signature on prescriptions for hundreds of Medicare patients he’d never seen. Whoever did it, he’s been told, likely pilfered those drugs and resold them.

“These people make more money off my name than I do,” said Bagner, who now works as a disability evaluator and says he no longer prescribes medications.

Today, credit card companies routinely scan their records for fraud, flagging or blocking suspicious charges as they happen. Yet Medicare’s massive drug program has a process so convoluted and poorly managed that fraud flourishes, giving rise to elaborate schemes that quickly siphon away millions of dollars.

Frustrated investigators for law enforcement, insurers and pharmacy chains say they don’t see evidence that Medicare officials are doing much to stop it.

“It’s kind of a black hole,” said Alanna Lavelle, director of investigations for WellPoint Inc., which provides drug coverage to about 1.4 million people in the program, known as Part D.

One of the problems that enables so much fraud is:

Part D 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.

I wonder if the government would pay on a percentage of fraud reduction for a case like this?

Setting up the data streams from pharmacies would be the hardest part.

But once that was in place, it would a matter of getting some good average prescription data and crunching the numbers.

There would still be some minor fraud but nothing in the totals that are discussed in this article.

A topic map would be useful for some of the more sophisticated fraud schemes.

I make that sound easy and it would not be. There are financial/economic and social interests being served by the current Part D structures. And questions such as: How much fraud will you tolerate in order to get senior citizens their drugs? will need good answers.

Still, even routine data science tools and reporting should be able to lessen the financial hemorrhaging under Part D.

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