NYS Pharmacy Fraud Lydia J. Kosinski, R.Ph. Manager

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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 ---

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NYS Medicaid Pharmacy StatisticsFFY 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

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Office Of the (new) Medicaid Inspector Generals
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

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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
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Its Not Like We Dont Have Administrative Controls

• Post Clear Card Swipe (average. current mo.)
• Posters 333
• Post/Swipe 25
• Swipers 756
• Edit 1141 Pends -gt 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

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• Supervising Pharmacist, enrollment
  re-enrollment -gt 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

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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 (v phone
  match)
• Fiscal agent matches data permits claiming

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• e.g. Serostim added in 2002
• Docs put in patients BMI, height weight,
  also
• 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 gt 12 weeks/duration?

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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 lt 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

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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 (
  40/yr)
• Mandatory generic substitution
• Aggressive claims data auditing

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For more info on NYSDOH- OHIP Programs

• Write or call
• PPNO_at_health.state.ny.us
• 518-486-3209
• Office of Health Insurance Programs, Bureau of
  Pharmacy Policy Operations
• (not in OMIG)

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Each OMIG OHIP (MA) area with RX oversight
feeds the fraud detection stream ?
Enrollment, re-enrollment -gt anomalies ?
Odd billings -gt drugs-of-abuse -gt
Narcs,
Ketamine, Serostim ? Provider S/URS ? DW
data mining tools -gt Oracle ? Post (by
prescriber) Clear (by pharmacy) -gt Card Swipe
? Edit 1141 (pends) ? ProDUR
editing -gt high overriders time/date anomalies ?
Audit findings ? Self Disclosure
? Hotline Calls, E-Mails, Referrals
? EOMBs -gt thousands of targeted
interventions ? Undercover Shoppers -gt
1,018 700-800 Rx
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OMIG - Pharmacy Providers Identified, to be
Investigated, Sanctioned

• 2006 286 intensive / comprehensive PSURs ? 24
  Pharmacy providers referred to MFCU, Audit,
  Shopper Investigation, etc.
• 2007 many in progress

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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

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Legal Remedies

• Surety Bond Requirements 367-1(10) SS (but just
  25K)
• Civil Monetary Penalties 145-b SS
• Identified Recovery Interest Levies 145-b(3) SS
• Anti-Kickback Penalties 366-d SS 180.00-.08
  Penal
• Safe Harbors 366-d SS
• Self Referrals 238 PH
• WHISTLE BLOWER ACT (new for NYS)
• Can range from Class A misdemeanors to
• Class E Felonies

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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

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A Few Headlines from NYS Program Integrity
October 25, 2006 AG Eliot Spitzer and OMIG
Kimberly OConnor 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. March 18, 2007 NASSAU
COUNTY PHARMACIST GETS 4-TO-12 YEARS IN PRISON
FOR DIVERTING DRUGS AS PART OF MULTI-MILLION
DOLLAR DRUG RING Pharmacist Mangar others
convicted for trafficking dangerous black market
drugs Court issues favorable rulings in AGs
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. March 28, 2007 DOCTOR WHO
WROTE HUNDREDS OF ILLEGAL PRESCRIPTIONS TO
MEDICAID RECIPIENTS INDICTED ON MULTIPLE 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 100s of illegal RXs for patients
from the Bronx and Manhattan, was indicted on
multiple charges in County Court of Suffolk
County
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Could be Criminal - but Not Always

• Generic Therapeutic Substitution when not
  authorized
• Give-a-ways toaster ovens, turkeys, sneakers
• Auto refills clockwork q30d
• Double billings
• Short filling
• Buybacks
• False prescriber attribution PVR292
• Medically unnecessary fills

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• In 2006 NYS lodged criminal charges against 3
  Pharmacists for false HIV drug billings
• Remedy exclusion, restitution, prosecution- the
  interrelationship between DOH (Medicaid)-OMIG-SED-
  OPMC-MFCU
• Blend of admin legal controls key to maximize
  efforts minimize costs

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Reducing Pharmacy Fraud, Abuse and Waste
Promising Practices of States

• NGA Center for Best Practices
• Health Policy Studies Division
• Joan Henneberry February 13, 2003
• Rx Drug expenditures grows on average, 20
  annually
• Fraud, Waste Abuse in Medicaid amounts to more
  than 1 billion nation wide

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Its Often Not Enough

• Florida Michigan, others, use PBMs
• Pharmacies can avoid prior authorization/approval
  by choosing generic products
• Washingtons 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

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GAO-04-524TTestimony before the Subcommittee on
HealthMarch 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 ?

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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.
Thats 335 hundreds of miles away. None of the
recipients had any visits with the prescriber
. Look for geographic discordance

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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.

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• 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 recipient.
• The two practice locations for this doctor
  include the doctors office and one of the
  secondary Bronx addresses of a Manhattan DT
  Center (clinic).

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• 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.

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The other Bronx pharmacy billed for 53,885 using
the same Buffalo doctors license number. It
is believed that these Rx were also written by
the Bronx neurologist. Geo-mapping is a
fruitful approach
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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.
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• Pursuant to search warrants issued by the U.S.
  District Court, physical searches were conducted
  at the pharmacies.
• 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.

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• PSURS staff continued to provide post arrest
  support. The FBI and the U.S. Attorneys 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?)

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• The U.S. Attorneys Office, Southern District,
  states that a Federal Grand Jury has returned
  felony criminal indictments against the doctor
  and the associated individuals.
• .Expecting BIG recoveries

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Lessons Learned

• Pharmacy Fraud detection extirpation is never
  done
• Institute safeguards in quadruplicate they
  will still sneak through
• Well always have a job despite Managed Care,
  ProDUR, PBMs, PDLs, Medication Management,
  formularies, forge proof Rx, PA, Lock-In,
  provider exclusions prosecutions
• Since greed, alas, is a part of some
• humans nature

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Whats happening in YOUR state ?What tools
do you use ?What are your chief Pharmacy fraud
concerns?

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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_at_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_at_OMIG.state.ny.us