OIG investigates fraud, abuse with HIV drugs

The HHS Office of Inspector General found that approximately 1,600 Medicare Part D beneficiaries had questionable utilization of HIV drugs in 2012, according to a new report.

A single month’s supply of the commonly used combination HIV treatment efavirenz/emtricitabine/tenofovir (Atripla, Gilead Sciences) can cost Medicare around $1,700. Expensive medications like this are sold on the black market, exchanged for narcotics, or both, according to Tom O'Donnell, a special agent in charge for the Office of Investigations in New York.

For the report, investigators examined Part D Prescription Drug Event records for HIV medications in 2012. The records contain information regarding the drug, beneficiary, pharmacy and prescriber. The investigators developed several measures to identify fraud, waste or abuse based on results from past Office of Inspector General (OIG) investigations and input from CMS.

They found that a total of 135,554 beneficiaries received HIV medications in 2012 that were covered by Medicare Part D, totaling $2.8 billion. A total of 1,578 Medicare Part D beneficiaries had questionable utilization patterns for HIV drugs, according to the investigators. These beneficiaries either had no indication for HIV in their Medicare claims histories (n=888), received an excessive dose or supply of HIV drugs (n=432), received the medication from multiple pharmacies or prescribers (n=392), and/or received contraindicated HIV drugs (n=10).

Medicare paid a total of $32 million for HIV drugs for beneficiaries who had questionable utilization patterns in 2012.

OIG gave an example of a Part D beneficiary who received HIV medication but had no indication of HIV in her Medicare claims history — a 77-year-old woman from Detroit who had a prescription for 10 different types of HIV drugs prescribed by six different doctors. There was no evidence that she visited any of these doctors, according to the investigators. Medicare paid $33,536 for the woman’s prescriptions in 2012.

According to the investigators, 83% of beneficiaries with questionable drug utilization patterns received the low-income subsidy, paying little or no cost-sharing to receive the HIV medications under Part D.

In a podcast, O’Donnell said authorities have seen two types of fraud related to HIV drugs in New York. In one scenario, patients trade their HIV drug prescriptions for cash or other drugs, and the pharmacy will bill patients’ insurance without filling the prescriptions and continue to bill for refills that will never be dispensed. In the second scenario, pharmacies dispense the HIV drugs to the patient, who sells the drugs to a “runner.” The runner will either take the drugs to a stash house, another pharmacy or a wholesaler.

O’Donnell said the stolen HIV drugs are often shipped out of the country or sold to uninsured people inside the United States. Some pharmacies will buy the stolen drugs because it is cheaper than buying from wholesalers. The pharmacies will then repackage and resell the drugs to unsuspecting patients. Illegally diverted drugs pose great health risks to patients, O’Donnell said, because the black market is unregulated and the medications can be mishandled.

The investigators noted that CMS has placed few restrictions on specific Part D beneficiaries, and most of these restrictions have focused on opioids. OIG recommended the following seven steps to CMS to avoid further fraud, waste and abuse of HIV drugs and other medications:

  • Require sponsors to improve drug utilization review programs and identify beneficiaries who may be overutilizing HIV drugs;
  • Expand the overutilization monitoring system to include other drugs that are susceptible to fraud, waste and abuse;
  • Encourage sponsors to implement edits at the point of sale for beneficiaries identified as overutilizing drugs that are susceptible to fraud — similar to what has been done for opioids;
  • Restrict beneficiaries to a limited number of pharmacies or prescribers;
  • Limit the ability of beneficiaries with questionable utilization patterns to switch their Part D plans;
  • Instruct the National Benefit Integrity Medicare Drug Integrity Contractor to routinely monitor beneficiaries’ drug utilization patterns; and
  • Follow up on the beneficiaries who were identified in the investigation as having questionable utilization patterns.

The HHS Office of Inspector General found that approximately 1,600 Medicare Part D beneficiaries had questionable utilization of HIV drugs in 2012, according to a new report.

A single month’s supply of the commonly used combination HIV treatment efavirenz/emtricitabine/tenofovir (Atripla, Gilead Sciences) can cost Medicare around $1,700. Expensive medications like this are sold on the black market, exchanged for narcotics, or both, according to Tom O'Donnell, a special agent in charge for the Office of Investigations in New York.

For the report, investigators examined Part D Prescription Drug Event records for HIV medications in 2012. The records contain information regarding the drug, beneficiary, pharmacy and prescriber. The investigators developed several measures to identify fraud, waste or abuse based on results from past Office of Inspector General (OIG) investigations and input from CMS.

They found that a total of 135,554 beneficiaries received HIV medications in 2012 that were covered by Medicare Part D, totaling $2.8 billion. A total of 1,578 Medicare Part D beneficiaries had questionable utilization patterns for HIV drugs, according to the investigators. These beneficiaries either had no indication for HIV in their Medicare claims histories (n=888), received an excessive dose or supply of HIV drugs (n=432), received the medication from multiple pharmacies or prescribers (n=392), and/or received contraindicated HIV drugs (n=10).

Medicare paid a total of $32 million for HIV drugs for beneficiaries who had questionable utilization patterns in 2012.

OIG gave an example of a Part D beneficiary who received HIV medication but had no indication of HIV in her Medicare claims history — a 77-year-old woman from Detroit who had a prescription for 10 different types of HIV drugs prescribed by six different doctors. There was no evidence that she visited any of these doctors, according to the investigators. Medicare paid $33,536 for the woman’s prescriptions in 2012.

According to the investigators, 83% of beneficiaries with questionable drug utilization patterns received the low-income subsidy, paying little or no cost-sharing to receive the HIV medications under Part D.

In a podcast, O’Donnell said authorities have seen two types of fraud related to HIV drugs in New York. In one scenario, patients trade their HIV drug prescriptions for cash or other drugs, and the pharmacy will bill patients’ insurance without filling the prescriptions and continue to bill for refills that will never be dispensed. In the second scenario, pharmacies dispense the HIV drugs to the patient, who sells the drugs to a “runner.” The runner will either take the drugs to a stash house, another pharmacy or a wholesaler.

O’Donnell said the stolen HIV drugs are often shipped out of the country or sold to uninsured people inside the United States. Some pharmacies will buy the stolen drugs because it is cheaper than buying from wholesalers. The pharmacies will then repackage and resell the drugs to unsuspecting patients. Illegally diverted drugs pose great health risks to patients, O’Donnell said, because the black market is unregulated and the medications can be mishandled.

The investigators noted that CMS has placed few restrictions on specific Part D beneficiaries, and most of these restrictions have focused on opioids. OIG recommended the following seven steps to CMS to avoid further fraud, waste and abuse of HIV drugs and other medications:

  • Require sponsors to improve drug utilization review programs and identify beneficiaries who may be overutilizing HIV drugs;
  • Expand the overutilization monitoring system to include other drugs that are susceptible to fraud, waste and abuse;
  • Encourage sponsors to implement edits at the point of sale for beneficiaries identified as overutilizing drugs that are susceptible to fraud — similar to what has been done for opioids;
  • Restrict beneficiaries to a limited number of pharmacies or prescribers;
  • Limit the ability of beneficiaries with questionable utilization patterns to switch their Part D plans;
  • Instruct the National Benefit Integrity Medicare Drug Integrity Contractor to routinely monitor beneficiaries’ drug utilization patterns; and
  • Follow up on the beneficiaries who were identified in the investigation as having questionable utilization patterns.