NYS Pharmacy Fraud by t53BVB


									 NYS Pharmacy Fraud

Lydia J. Kosinski, R.Ph.
Manager, Recipient Activities & Utilization Review
Office of Medicaid Inspector General
Bureau of Investigations & Enforcement
---- NAMPI – San Diego CA. - August 2007 ---
    NYS Medicaid Pharmacy
          FFY 2006
MA enrolled Pharmacies             ~ 5,000
Pharmacy Dollars            $4,047,093,840
Unique Rx Beneficiaries          2,884,693
Total Pharmacy Claims           54,331,490

            What percent is fraud?
             .1, 5, 10%,+ varies
 Office Of the (new) Medicaid
 Inspector General’s Approach
 Created by Executive Order - Total staff
  ―Program Integrity‖ ~ 500 staff ~

 Includes these areas:
• Fraud Detection Systems
• Revenue Initiatives
• Performance Assessment & Reporting
• Medicaid Audit UPS & Metro
• Investigations & Enforcement UPS & Metro
• Counsel
• Administration
―Bureau of Investigations & Enforcement‖
    totals 80+ staff – tasked with both the
    Provider side & Recipient side of fraud

Provider : primary role of up front fraud
detection (P/SURS) and investigations.
Upstate Office includes 5 R.N.s, 2 R.Ph.s ,
16 Investigators, other management &
administrative staff. Metro office ~ 21
Management, administrative, investigative,
2 R.Ph., & 1 R.N.
P/SURS run by Central Office
       Its Not Like We Don’t Have
         Administrative Controls
• “Post & Clear‖ Card Swipe (average. current mo.)
       • Posters                   333
       • Post/Swipe                 25
       • Swipers                   756

•   Edit 1141 Pends -> 233 pharmacies
       •   Reviews for Facility ID as prescriber        105
       •   DME                                          19
       •   Incorrect Rx serial number                   29
       •   Use of Plan B drugs (FFP- no fiscal order)    80

• Utilization Thresholds – service limits
• Electronic Eligibility Verification
• PVR 292 requirements - DQ & Dead
• Supervising Pharmacist, enrollment & re-enrollment
-> 306 letters of Proposed Agency Action (2006)

• ECC P-O-S ProDUR – currently has
 soft edits
        therapeutic duplication & drug-drug severity
       level 1
        project proposed to change to same drugs
       same strength with earlier than 75%   days
       supply to a hard reject

•Co-pay ~ $ 2.6 M/mo av. cost avoidance (2006)

•Enteral DIRAD ~ $3.2 M /mo. Av. cost avoidance
   More Administrative Remedies
―DIRAD‖ instituted 11/00 to initially control Zyvox
  use (special antibiotic) & other drugs

• An automated telephonically accessed Prior
  Authorization system

• Designed to require prescribers input data, get PA#,
  place on script

• Pharmacists call & input info, - but at times
  recipients call in their own PAs (√ phone # match)

• Fiscal agent matches data & permits claiming
e.g. Serostim added in 2002
• Docs put in patient’s BMI, height & weight,
• Their ID MA#, Recipient ID, answer ―yes‖
  or ―no‖ to 10 questions
• System has caller ID to be able to detect if
  non authorized individuals calling,
• PAs dropped significantly - but what about
  those who extend therapy > 12
 Other Administrative Controls in
        NY (DOH-OHIP)
• Mandatory Generic Program ―ManGen‖ in
  November 2002

   57,993 Man-Gen PAs in SFY 05-06
   Cost shifting may result to < $ product
   Must be a ―real‖ brand, & ―A‖ rated
  generic must be available
• Preferred Drug List now finally in
  existence – DAW can still result in a PA

• DUR Programs – need to feed PI
      New Administrative
    Approaches & Technology

• Enhanced P-O-S DUR & EHR integration
  (NYC Pilot)
• Enhanced information technology
• Targeted pharmacy provider education
• Limits to supply of medication available per
  script, not just pharmacy claims limits (~
• Mandatory generic substitution
• Aggressive claims data auditing
For more info on NYSDOH-
     OHIP Programs

        Write or call:

Office of Health Insurance Programs,
    Bureau of Pharmacy Policy &
           (not in OMIG)
Each OMIG & OHIP (MA) area with RX oversight
feeds the fraud detection stream
     Enrollment, re-enrollment -> anomalies
     Odd billings -> drugs-of-abuse ->
                                    Narcs, Ketamine, Serostim
     Provider S/URS
     DW & data mining tools -> Oracle
     Post (by prescriber) & Clear (by pharmacy) -> Card Swipe
     Edit 1141 (pends)
     ProDUR editing -> high overriders time/date anomalies
     Audit findings
     Self Disclosure
     Hotline Calls, E-Mails, Referrals
     EOMBs -> thousands of targeted interventions
     Undercover Shoppers -> 1,018 ~700-800 Rx
  OMIG - Pharmacy Providers
 Identified, to be Investigated,
• 2006   286 intensive / comprehensive
 PSURs  24 Pharmacy providers
 referred to MFCU, Audit, Shopper
 Investigation, etc.

• 2007 many in progress…
Audits CFY 2006 All Providers

 • 339 total audits
 • ~ $ 18 M proposed restitution
 • & 2x proposed in 2007
 • 10-30 or so annual Pharmacy
   audits historically, many more to
   come in 2007
          Legal Remedies
• Surety Bond Requirements § 367-1(10) SS (but just
• Civil Monetary Penalties § 145-b SS
• Identified Recovery Interest Levies §145-b(3) SS
• Anti-Kickback Penalties § 366-d SS; § 180.00-.08
• Safe Harbors §366-d SS
• Self Referrals §238 PH

    *** Can range from Class A misdemeanors to
                Class E Felonies ***
        Regulatory Penalties
          Title 18 NYCRR
• Section 504.8 – Audit and Claim Review
   Restitutions & withholds

• Section 515.1 Scope & Definitions

• Section 515.2 – Unacceptable Practices under
  the Medical Assistance Program

• Section 515.4 – Guidelines for Sanctions
       A Few Headlines from NYS’ Program Integrity
October 25, 2006 —AG Eliot Spitzer and OMIG Kimberly O’Connor today
announced that, after a 4-month undercover investigation, prosecutors and
investigators have dismantled a Medicaid fraud ring involving a doctor,
pharmacists, several NYC pharmacies, millions in fraudulent Medicaid
billings and large monetary transfers to individuals in Pakistan….
DOLLAR DRUG RING Pharmacist Mangar & others convicted for trafficking
dangerous black market drugs; Court issues favorable rulings in AG’s civil
lawsuit seeking millions – AG Andrew M. Cuomo announced today that a
licensed R.Ph. was sentenced to state prison for his role in a multi-million
dollar drug diversion and money laundering ring….
CHARGES Amagansett M.D. Michael Chait faces life in prison– AG Andrew
M. Cuomo today announced that Michael Chait, M.D., charged earlier this
month with writing 100’s of illegal RXs for patients from the Bronx and
Manhattan, was indicted on multiple charges in County Court of Suffolk
County …
     Could be Criminal - but
          Not Always
• Generic Therapeutic Substitution when not
• Give-a-ways [toaster ovens, turkeys,
• Auto refills: clockwork q30d
• Double billings
• Short filling
• Buybacks
• False prescriber attribution – PVR292
• Medically unnecessary fills
• In 2006 NYS lodged criminal charges
  against 3 Pharmacists for false HIV
  drug billings

• Remedy: exclusion, restitution,
  prosecution- the interrelationship
  between DOH (Medicaid)-OMIG-

• Blend of admin & legal controls key to
  maximize efforts minimize costs
―Reducing Pharmacy Fraud, Abuse
 and Waste: Promising Practices of
           NGA Center for Best Practices
          Health Policy Studies Division
       Joan Henneberry    February 13, 2003

• Rx Drug expenditures grows on average, 20%

• Fraud, Waste & Abuse in Medicaid amounts to
  more than $1 billion nation wide
        It’s Often Not Enough
• Florida & Michigan, others, use PBMs
• Pharmacies can avoid prior authorization/approval
  by choosing generic products
• Washington’s Therapeutic Consultation Services-
  active alert process Payment Review Program (DSS)
• Massachusetts – requires generics if one is available
• Differential dispensing fees as in Conn, Illinois,
  Iowa, New York
• Differential co-pays – Indiana, Maine, Montana,
  New Hampshire, New York
• On site audits – States can uses contract audit firms
   Testimony before the Subcommittee on Health
                  March 4, 2004
   Prescription Drugs: State Monitoring Programs May Help
                    Reduce Illegal Diversion

• Only 15 States have drug monitoring programs -
  California, Hawaii, Idaho, Illinois, Indiana, Kentucky,
  Mass., Michigan, Nevada, New York, Oklahoma,
  Rhode Island, Texas, Utah, Washington

• West Va., Alaska, Delaware, New Hampshire,
  Florida, Pennsylvania, Maine & Conn, do not

So which states have the biggest Oxycontin diversion
  by both providers & patients ?
     An OMIG Success Story
A PSURS review was done of high
ordering providers. A top prescriber was
identified as being in Buffalo but the
majority of his recipients lived in the
Bronx & had their prescriptions filled in
pharmacies in the Bronx. That’s 335
hundreds of miles away.
None of the recipients had any visits
with the prescriber .

Look for geographic discordance
 Press Release ―Two Pharmacies, Two
Doctors and a Diagnostic and Treatment
 Center Involved in HIV Drug Scam‖
• PSURS review identified a board certified
  neurologist in the Bronx that wrote
  approximately $2 M in AIDS-related Rx
  starting January 2006. Two Medicaid
  recipients provided info that this doctor
  writes Rx for AIDS-related medication with
  no physical exam or confirmation of an AIDS
  related illness. This was supported by PSUR
  analysis that showed no confirmed HIV Dx.
•In addition, allegations state that
unknown persons stationed outside of the
two practice locations of this doctor solicit
Medicaid recipients to ask for AIDS-
related meds and then offer to purchase
these meds from the posturing Medicaid

•The two practice locations for this doctor
include the doctor’s office and one of the
secondary Bronx addresses of a
Manhattan D&T Center (clinic).
• One of the pharmacies in the Bronx allegedly
filled over $1 M in Rx written by the Bronx
neurologist but billed as the ordering provider
a doctor who practices in Buffalo, NY.

• The real Buffalo doctor appears be innocent of
the whole scam. A hotline complaint received
from an alleged employee of this pharmacy
states that the supervising pharmacist is billing
Medicaid for meds which are not being provided
to MA recipients.
The other Bronx pharmacy billed for
$53,885 using the same Buffalo doctor’s
license number.

It is believed that these Rx were also
written by the Bronx neurologist.

Geo-mapping is a fruitful approach…
Background - What happened: The PSURS
referral to MFCU engendered a joint
investigation by the FBI, OMIG, and NYC
Bureau of Fraud and Investigation. In
September 2006 FBI special agents FBI
arrested the physician, a co-owner of three
pharmacies, and a pharmacy employee and
charged them with conspiracy to defraud
the United States government. OMIG
undercover shoppers provided evidence
that supported the review findings and that
led to these arrests.
• Pursuant to search warrants issued
by the U.S. District Court, physical
searches were conducted at the
• OMIG investigators and OMIG
pharmacy staff provided assistance
and support at each location.
• OMIG pharmacy staff provided
additional technical assistance to the
FBI in analyzing material obtained
under the search warrants.
• PSURS staff continued to provide post
arrest support. The FBI and the U.S.
Attorney’s Office were given
documentation related to fraudulent
Medicaid billings for services purportedly
rendered to our undercover operators.
• OMIG Pharmacy staff assisted the FBI in
reviewing and cataloging evidence seized
at the three pharmacies. Recipient
interviews were conducted…(& what to do
with THEM?)
• The U.S. Attorney’s Office, Southern
 District, states that a Federal Grand Jury
 has returned felony criminal indictments
 against the doctor and the associated

• ….Expecting BIG recoveries
          Lessons Learned
• Pharmacy Fraud detection & extirpation is
  never done
• Institute safeguards in quadruplicate &
  they will still sneak through
• We’ll always have a job despite Managed
  Care, ProDUR, PBMs, PDLs, Medication
  Management, formularies, forge proof Rx,
  PA, Lock-In, provider exclusions &
• Since greed, alas, is a part of some
  humans’ nature
 What’s happening in
    YOUR state ?
What tools do you use ?
 What are your chief
  Pharmacy fraud
       Thanks & Good Luck
For the real experts in Pharmacy Fraud Contact:

                   Michael E. Little,
          Deputy Medicaid Investigator General,
                217 Broadway - 8th Floor
                  New York, NY 10007
      212-417-4637 - or - MEL11@OMIG.state.ny.us

                   - or for PSURS info:

           Loretta Ruperto RN, Supervisor
Provider Utilization Review, Investigations & Enforcement,
              800 North Pearl St. - lower level
                     Albany, NY 12204
      518-473-2565 - or- LVR02@OMIG.state.ny.us

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