MEDICARE - Part-D Fraud

"Caught Up in a Medicare Drug Fraud" by Tracy Weber and Charles Ornstein, ProPublica 12/31/2013

Excerpt

At another time in her life, Denise Heap might have tossed aside the insurance forms listing the drugs prescribed to her mother.

The “explanation of benefits” forms came like clockwork and didn’t require any action on her part.

But Heap was worried about her mother, Joyce, who was in the end stages of Alzheimer’s disease.  Her health had inexplicably declined in the Los Angeles area nursing home where she’d been living.  So in April, when a thick envelope arrived from her mother’s Medicare drug plan, Heap scrutinized it.

What she found was frightening: Her 77-year-old mother was receiving a raft of medications Heap had never seen before.

As Heap began Googling the drugs, she realized something was drastically wrong.  Either her mother was being given expensive medications for conditions she didn't have — such as breast cancer, asthma, emphysema and high cholesterol — or something sinister was going on: Someone was using her mother to steal drugs.

“I flipped,” Heap said.  Medicare's prescription program, known as Part D, paid for more than “$10,000 worth of meds” in just three months, she said.

She first called Medicare to report her suspicions, she said, then the insurance company that managed her mother’s Medicare drug plan.  Neither, she said, seemed very concerned.

“I was like, ‘No.  No.  No.  You have to understand.  I am trying to help you guys,’” she said.

Soon, Heap became convinced someone had stolen her mother's identity while she was living at a nursing home run by an Armenian couple.  The couple kept moving the location of the nursing home.  And Heap believed they had been over-sedating her mother with high doses of antipsychotics, inappropriately treating her blood pressure and allowing bed bugs to feast on her.

“I knew something crooked was going on,” said Heap, 59, who, with her mother, had co-founded a Holocaust education nonprofit in the 1990s to document stories of German resistance to Hitler.

Frustrated, Heap called Los Angeles County sheriff's Sgt. Steve Opferman, head of a task force specializing in prescription drug fraud.  As soon as Heap began describing what had happened, Opferman said he knew her mother had been caught up in a fraud scheme involving Armenian organized crime.

Opferman and other investigators say criminals wager that patients and their families will not be like Heap.  They bank on the fact that their victims —Medicare beneficiaries — will be too old or too sick to review insurance forms summarizing the medications and services billed in their names.  And they count on the tendency of busy family members to give such forms a cursory glance, if that.

“Suffice it to say most people don't pay attention, let alone know what they're looking at,” Opferman said.

But Heap's case, and others like it, shows the important role patients and their families can play in uncovering fraud within Part D.  The program now covers 36 million seniors and disabled people and fills 1 in 4 prescriptions nationwide.  Last year, it cost taxpayers $62 billion.

In an earlier report, ProPublica found that Medicare’s system for pursuing such fraud is so cumbersome and poorly run that schemes can quickly siphon away millions.

MEDICARE - Weak Oversight Promotes Part-D Fraud

"‘Let the Crime Spree Begin’:  How Fraud Flourishes in Medicare’s Drug Plan" by Tracy Weber and Charles Ornstein, ProPublica 12/19/2013

Excerpt

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.

Lavelle said her team routinely refers doctors and pharmacies to the contractor Medicare hires to pursue fraud.  "Oftentimes we never hear back, positive or negative."

Since it started in 2006, Part D has been lauded for its success in getting needed medications to more than 36 million seniors and disabled enrollees.

But over the past year, ProPublica has detailed how Part D is beset by weak oversight.  Medicare doesn’t analyze its prescribing data to root out doctors whose inappropriate drug choices endanger patients.  Nor has it flagged those whose unchecked devotion to name-brand drugs, instead of generics, adds billions in needless expense.

For this story, ProPublica again scrutinized Medicare’s data, this time to identify scores of doctors whose prescription patterns bore the hallmarks of fraud.  The cost of their prescribing spiked dramatically from one year to the next — in some cases by millions of dollars — as they chose brand-name drugs that scammers can easily resell.

Sometimes the doctors claimed they were unwitting victims of identity theft.  In other cases they were paid for writing bogus or inappropriate prescriptions.