Data analytics, undercover investigations root out prescription drug fraud [Special Report]

In the midst of the opioid addiction crisis, fraud investigators and state and federal prosecutors are conducting more targeted investigations to uncover doctor-shopping schemes that can rack up millions in unnecessary medical costs and prescription drug reimbursements, sources tell FierceHealthPayer: AntiFraud in exclusive interviews.

Spending on commonly abused opioids within Medicare Part D has increased 156 percent between 2006 and 2014, according to an Office of Inspector General report. During the same period, overall spending within the program grew 136 percent, while beneficiary enrollment grew 68 percent. Perhaps even more telling, the average number of prescriptions for commonly abused opioids per beneficiary increased 20 percent, compared to 3 percent for all drugs.

Meanwhile, opioid addiction has given rise to fraud schemes, including drug diversion and doctor-shopping. In some cases, providers are complicit in the schemes, accepting cash payment for opioid prescriptions. In other instances, unsuspecting providers write prescriptions to addicts who have visited dozens of doctors over the course of a month.

These schemes--whether perpetrated by the provider or the patient--are difficult for law enforcement officials to break up, according to Bill Killian (right), an attorney with Polsinelli in Chattanooga, Tennessee, and the former U.S. Attorney for the Eastern District of Tennessee.

"The biggest problem from a law enforcement standpoint is there is a legitimate path to getting those prescriptions versus cocaine or heroin on the street," Killian said in an exclusive interview with FierceHealthPayer: Antifraud. "Opioid prescriptions have a legitimate source where there is a doctor that writes the prescription and it gets filled by a pharmacy."

These schemes have created a ripple effect throughout the healthcare industry in which the improper payments tied to prescription drugs often pale in comparison to the unnecessary medical costs that accompany elaborate doctor-shopping schemes. Drug diversion coupled with overprescribing has also spurred the growth in heroin addiction, a cheaper alternative to prescription painkillers.

"It has a huge impact as far as the delivery of healthcare across the board," Greg Anderson, vice president of corporate and financial investigations for Blue Cross Blue Shield of Michigan, said in an interview with FierceHealthPayer: Antifraud.

A web of unnecessary costs

Doctor-shopping schemes frequently lead to thousands of dollars in unnecessary costs, but those costs are often accompanied by millions of dollars in unnecessary medical care.

Anderson cites a recent case in which one woman triggered more than $2 million in claims for professional services between 2010 and 2014 as part of a doctor-shopping scheme. BCSBM paid out more than $462,000, but less than $7,000 was traced back to pharmacy claims.

"When people are involved in the diversion of drugs, the ancillary medical expenses rise quickly as people subject themselves to so many different services," Anderson says.

Over the course of four years, the woman saw more than 170 physicians, filled prescriptions at five different pharmacies, received services at 183 different facilities, took 116 ambulance rides and had more than 2,000 MRIs and X-rays, according to Anderson (right).

"In almost every instance, the medical costs far exceed the cost of the prescription drugs themselves," he says.

As a government prosecutor, Killian worked with private insurers such as Blue Cross Blue Shield of Tennessee to identify potential fraud schemes. Before he left the U.S. Attorney's Office, the insurer was in the process of reviewing its policies regarding the medical necessity of pain pills in an effort to reduce the number of patients who receive high-volume prescriptions after a minor procedure such as dental work.

Still, patients who shop for docs can be difficult to detect. So BCBSM has led physician education efforts designed to identify addicts looking for a prescription. When members appear to be filling opioid prescriptions at multiple pharmacies or visiting several physicians in a short time period, the insurer will put limitations on where that member can fill prescriptions. The more egregious cases prompt further investigation.

"We'll literally go out to pharmacies and doctors' offices, confirm who is there, see if there is video of it, take signature logs for handwriting analysis and initiate prosecution against members that are involved in doctor-shopping," Anderson says.

Data gives way to traditional investigations

Data analytics has significantly altered the way payers and enforcement officials address prescription drug fraud, particularly when medical professionals are complicit in the scheme.

Killian says that during his time at the U.S. Attorney's Office the Department of Health and Human Services (HHS) would relay leads based on physician prescribing habits.

"In light of the [opioid] problem, HHS and others have started perusing the accounts of doctors and monitoring or auditing those accounts to make sure there's not an inordinate amount of opioid prescriptions written from that practice," he says.

At the beginning of 2015, BCBSM began using an SAS fraud framework, allowing the insurer to tap into specific data points that serve as a jumping-off point for fraud investigations. In addition to tracking provider prescribing habits, the fraud management system can combine pharmaceutical records with medical records so that investigators can see if a patient is receiving medical services that would justify an opioid prescription. This can be helpful in identifying schemes in which physicians accept cash in exchange for painkiller prescriptions.

A large influx of pain pills for a member without any correlating medical services is one red flag. In other instances, geographical data plays a role, particularly if patients are traveling long distances to see a general practitioner.

Investigators can also isolate the number of providers who are prescribing specific medications. For example, BCBSM recently identified 548 doctors who were prescribing three medications together: Vicodin (hydrocodone), Xanex (anti-anxiety medication) and Soma (a muscle relaxer). Referred to as the "holy trinity," the three medications taken together simulate a heroin high, Anderson says.

BCBSM sent letters to the 548 physicians advising them of the impact of that combination of drugs. Within a month, the number dropped to 240--many from physicians new to the group. For those who had already received letters, the insurer launched an undercover investigation, posing as patients looking for drugs.

More recently, BCBSM has also been tracking overdose deaths in an effort to target overprescribing physicians. Although this data is less concrete, investigators recently used data on overdose deaths in conjunction with other data to identify three doctors linked to 26 patient deaths. One of those physicians was tied to 19 deaths alone. 

Prosecutors are less willing to levy murder charges against overprescribing physicians, although that attitude may be shifting. Last year, a California physician was convicted of second-degree murder for inappropriately prescribing painkillers that killed three patients.

"There are some states that have had success, but they are few and far between," Anderson says. "But this is one avenue we need to pursue going forward. "

Ultimately, data analytics serves as a jumping-off point, Anderson says, but undercover investigations also play a critical role in building a case against an unscrupulous provider or a patient who is diverting drugs. Last year, BCBSM conducted 200 undercover operations in which investigators posed as patients.

Those criminal rings can be difficult to break up, since the patient base consists primarily of addicts who rely on the success of the scheme to maintain their supply, Anderson says. Undercover operations allow investigators to infiltrate the diversion scheme.

"We couldn't make these cases without doing the undercover investigation," he says. "These [data analytic] tools are great to highlight something, but nothing can replace the legwork. You just can't do it on those numbers alone."