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Investigating Medicare Part D Fraud: Overcoming Major Challenges

Investigating Medicare Part D Fraud: Overcoming Major Challenges

Medicare Part D fraud puts Americans at risk physically and financially. Knowing how to detect and prevent it is in the whole country’s best interest.

Medicare Part D spending more than doubled from 2007 to 2014 and it continues to rise every year. Unfortunately, billions of dollars in annual spending are lost due to Medicare Part D fraud.

Part D fraud not only costs taxpayers financially, but also puts their physical health at risk. Knowing how to detect, investigate and prevent these schemes is in the whole country's best interest.

Learn how case management software can help you conduct more effective SIU & OIG investigations in our free eBook.

Indicators of Medicare Part D Fraud

The Centers for Medicare & Medicaid Services (CMS) depends on plan sponsors to be the first line of defense against Medicare Part D fraud, waste and abuse (FWA). Without SIUs to monitor their providers, Medicare could suffer even more losses due to the program's enormous size and complexity.

Because there are so many different Part D fraud schemes, knowing the signs gets more and more difficult. Still, many instances of FWA share common indicators, including the ones below.

Questionable Billing

While it's easy to make mistakes on claims, especially during busy times, these questionable billing patterns in claims from a facility or pharmacy could be signs of Medicare Part D fraud.

  • High number of prescriptions per beneficiary
  • Large percentage of prescriptions for commonly abused opioids such as OxyContin and fentanyl and other controlled substances
  • Higher number of different types of drugs prescribed for each beneficiary
  • High average number of prescribing doctors per beneficiary, especially for identical or similar prescriptions (could indicate "doctor shopping")
  • Prescriptions don't have the provider's active and valid National Provider Identifier on them

Medical History Doesn't Match Services

It's not impossible that a patient could need a new type of medicine, but the following indicators should also warrant an investigation:

  • Documents (e.g. medical records, claims forms) look forged or altered
  • The beneficiary's medical history doesn't fit with their prescription
  • A prescribed drug is not appropriate to take with the beneficiary's other prescriptions
  • The patient suddenly increases the number of treatments they receive for a condition

These indicators could point to fraud schemes including unnecessary prescriptions, medical identity theft or billing for prescriptions that weren't filled or dispensed.

Issues with Prescription Drugs

Sometimes inconsistencies with the drugs themselves or their distribution indicate Part D fraud. For example:

  • Drugs are diverted to someone from the person to whom they were prescribed
  • Quality issues (e.g. expired, counterfeit, or diluted)
  • Generic drugs dispensed in place of name brand
  • Prescriptions are never filled or picked up

Kickbacks and Bribes

Kickbacks and bribes can involve anyone from beneficiaries to providers to pharmacists to drug manufacturers. Watch out for these indicators, which could point to Part D fraud:

  • Drugs promoted for off-label use by manufacturers
  • Manufacturers provide samples of drugs to providers (who then bill Medicare)
  • Beneficiary or provider suddenly has money, expensive gifts or luxury goods
  • Patient, pharmacist or provider receives a drug, supply or service at a discounted rate

RELATED: What is Medicare Part D Fraud?

Investigating Part D Fraud

Every Medicare Part D fraud scheme violates the Federal Civil False Claims Act (FCA). This law "imposes civil liability on any person who knowingly submits, or causes the submission of, a false or fraudulent claim to the Federal Government." Additionally, fraudsters may be breaking the Anti-Kickback Statute (prohibits paying or receiving rewards in return for business generation) and the Stark Law (prohibits physician self-referrals).

When investigating Part D fraud, it's important to keep these laws in mind, as well as the well-being of beneficiaries and your organization's reputation.

Investigation Challenges and Solutions

Investigating healthcare fraud, especially with so much money at stake, is critical to the success of the country's financial and physical health. If you have a strong case management system, your investigations will be efficient, effective and well-documented, helping you stop fraud schemes faster.

Challenge: Keeping data secure

Solution: Protecting sensitive data when investigating healthcare fraud is essential. Case management software uses a secure platform and role-based access to keep information private.

Challenge: Information silos

Solution: Make tracking investigations easier by using a case management system with case linking. This feature flags links between cases based on preset criteria such as name or location so you can spot large fraud schemes. In addition, choose a system that lets you analyze trends and identify behavior patterns to boost detection and prevention efforts.

Challenge: Difficult information retrieval

Solution: Keeping data in various repositories and spreadsheets can slow down your investigation. Use a case management solution with centralized case files. Not only does it keep all the information and evidence you need in one place, but it's easier for teams and employees to collaborate on the investigation, too. Choose secure, web-based software so your investigators can access their files remotely to reduce loss of key details.

Challenge: Time-consuming reporting

Solution: Writing investigation reports can take hours that could be better spent investigating, especially when you need to ensure they're compliant and court-ready. Case management software with built-in report templates and one-click reporting capabilities reduces turnaround time and non-compliance.

Learn how i-Sight (now Case IQ) case management software helped one pharmacy benefit manager implement a secure, centralized system that tracked their information and made it searchable. Read the case study here.

Preventing Medicare Part D Fraud

In order to protect US taxpayers, beneficiaries and your organization, take steps to prevent Part D fraud before it happens.

First, implement an effective compliance program. Stay up to date with regulatory requirements and revisit your compliance policies and procedures often. If you suspect potential fraud, don't be afraid to report it. The Self-Disclosure Protocol (SDP) lets you "voluntarily disclose self-discovered" fraud "to avoid the costs and disruptions associated with a Government-directed investigation and civil or administrative litigation."

Additionally, if you detect FWA, take corrective action promptly. Conduct a root cause analysis to eliminate the real cause of the behavior rather than just the symptoms. Then, develop a corrective and preventive action plan to help your organization move forward.

Not sure how to get started on a corrective action plan? Use our CAPA form template to get started.