Medicare fraud runs deep in prescription drug program

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Crooks are taking advantage of lax oversight in Medicare’s Part D prescription drug program to obtain highly addictive drugs including oxycodone, Ritalin, and methadone, according to results of a federal probe.

The report by an independent inspector said Medicare can’t verify all the prescriptions it pays for, leaving the system open to exploitation by criminals using fake medical ID numbers and the identities of dead doctors.

The Centers for Medicare and Medicaid Services, which administer the federally funded health insurance program, isn’t adequately confirming that prescriptions are written by physicians, according to the investigation by the Office of the Inspector General at the Department of Health and Human Services.

Pharmacies and other Medicare contractors are supposed to enter a number that identifies prescribers. But in many cases, that information is being left blank or assigned a dummy number, last week’s report found. The missing information doesn’t always indicate fraud and could include clerical errors, but without prescriber identifiers, it’s hard for investigators to determine.

The report showed the agency paid $20.6 million for 228,000 prescriptions for so-called schedule II drugs with invalid prescriber IDs in 2007. The agency paid for about $1.6 billion worth of schedule II drugs during that same time period.

Investigators said the prescriptions with invalid IDs represented a small portion, but are alarming because schedule II drugs include heavy-duty painkillers and stimulants that are frequently trafficked.
Critics say pharmacies are getting around safeguards in the system, making it nearly impossible for federal health officials to track whether a licensed doctor prescribed the drug and in what quantities.

“It’s similar to placing a combination lock on a gate to protect what’s inside but then allowing any combination to open the gate,’’ said Robert Vito, a regional inspector general for the Department of Health and Human Services, during testimony before Congress last year.

Investigators recommended that contractors not be paid for Schedule II prescriptions that have an invalid doctor ID number, but Medicare officials worried stricter oversight could hamper legitimate patients’ access to medications.

The Associated Press

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South Texas police chief pleads guilty to pot smuggling

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The former Sullivan City Police Chief Herman Guerra Jr. pleaded guilty last week to helping Mexican drug cartels smuggle marijuana across the Rio Grande River starting in June 2009.

Guerra pleaded guilty to one count of conspiracy with intent to distribute. Prosecutors say that Guerra helped cartel members bring about one ton of pot across the river in the Sullivan City area, on flat-bottom boats.

Federal agents picked up Guerra in June 2010 as part of “Project Deliverance,” a nationwide sweep of persons suspected of working with the drug cartels.

After his arrest, Guerra was suspended with pay, and later fired. He is currently free on bond and scheduled to be sentenced on April 20.

Guerra’s lawyer, Oscar Alvarez said, “He understands he abused a position of trust. His goal is just to undo the harm he did to the community and his family.”

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Mayoral aide gets probation for dealing OxyContin and cocaine

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A former aide to Boston’s Mayor Thomas M. Menino was spared a potential lengthy prison sentence yesterday, when his lawyers and politically-connected supporters convinced the judge he was a changed man.

John M. Forbes, 31, a community coordinator for East Boston in city hall, was arrested in December 2009 for selling OxyContin pills from his kitchen, and attempting to sell 10 ounces of cocaine in an undercover transaction. Forbes said that his life was out of control, thanks to a 5 pill-per-day OxyContin addiction.

The prosecutor, Assistant U.S. Attorney Jeffrey M. Cohen, argued for a 51-month prison sentence, the same punishment that was given to a co-defendant, Lawrence R. Taylor. Cohen said that Forbes violated the public trust by representing city hall by day, and then selling drugs at night from his home — in front of his own children.

After he was arrested, he refused to cooperate with authorities, said Cohen.

Forbes’s attorney Rosemary Scapicchio, told  Judge Richard G. Stearns that Forbes was rehabilitated by his 128-day stay at a drug treatment center, and asked for leniency. She said he “can be a source of hope for others” and that he planned to help others fight their addiction.

Prominent politicians, including ex-Senate president Robert Travaglini and city councilor Sal LaMattina, were among supporters that lobbied the judge for a non-prison sentence.

He faced a maximum sentence of up to 20 years in prison. He was sentenced to five years probation and 1,800 hours of community service.

The Boston Herald

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Drug coupons steering consumers away from generics, driving up costs of healthcare

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Image the predicament of drug company executives when patent protection runs out on their flagship drugs, forcing them to compete with products that are vastly cheaper, yet essentially do the same thing.

All things being equal, consumers will migrate to the generic alternative, instead of paying a large out-of-pocket co-payment for the brand-name version.

In order solve this dilemma, the ever-ingenious drug companies invented a solution to reduce or eliminate the costly co-pay for consumers. Now they simply provide patients with co-payment cards or coupons, according to a story in Sunday’s New York Times.

Pfizer just introduced one such card for its blockbuster drug Lipitor. Instead of a $50-plus co-payment, the card brings the price down to a little as $4, the same amount charged by Wal-Mart for a generic version of the statin.

On the surface it appears as a good deal for consumers, but to the extent it increases the costs that insurance companies pay for medications, the cards and coupons make insurance premiums that much more expensive. Both insurance companies and consumer groups call the coupons marketing gimmicks, that enrich wealthy drug companies at the eventual expense of the consumer, by driving up the cost of providing the prescription benefit.

Drug manufacturer Medicis uses the coupon scheme to push its product Solodyn, a once-per-day formulation of the antibiotic minocycline used to treat acne. A month’s supply of the medication runs about $700, instead of about $40 for the generic version. The only difference is that the generic version of minocycline must be taken twice per day.

The company’s website offers a discount card to consumers, reducing the cost to under $10 per month, providing that patients have health insurance. Good for the consumer, but the insurance company gets stuck with a bill in the hundreds of dollars, instead of the $40.

The Times reported that in a presentation to investors, the company said that the majority of patients use the co-pay card to purchase Solodyn, which recently helped double the number of prescriptions to 26,000 per week.

When insurance companies are presented the bill for brand-name drugs over the generic alternative, the impact on premiums can be exceedingly high.

Take for example the costs paid by the health plan at District 37, a union representing public employees in New York City. During the year ended June 2009, the cost of cholesterol-lowering statins was $17.3 million for 59 percent of such claims, and only $179,000 for the generic version of similar statins representing the other 41 percent of claims.

While drug cards and coupons are freely available and used frequently by patients for expensive drugs, the companies are barred for offering them to patients in federal programs such as Medicare, since they are considered an inducement to use the product and violate anti-kickback laws.

Insurance companies and pharmacy benefit management companies would like to somehow eliminate the coupons and cards, but say that there is little they can do at the moment. The existing system isn’t able to provide them with information on whether the patient or the drug company was responsible for the co-payment.

The New York Times

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Former Atlanta cop sentenced in drug dealer protection case

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A former Atlanta cop was sentenced on Thursday to 12 years in prison on drug and corruption charges.

Lucius T. Solomon III pleaded guilty to charges that he took $2,000 in protection monies three separate times in 2009 and 2010 from drug dealers. Solomon, 32, was on the Atlanta force for nine years.

Solomon was originally charged with attempting to sell 5 kilograms of cocaine and possessing a firearm while involved in the sale of illegal drugs. When arrested, he was under video surveillance.

The U.S. Attorney’s Office said that Solomon was attempting to sell the cocaine to an undercover FBI agent when he was caught. Prosecutors claim that Solomon worked the deals when in street clothes, and out of his police cruiser when he was in uniform.

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Doctor supplied steroids to hundreds of New Jersey firefighters and law enforcement officers

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A seven-month investigative report in the Star-Ledger details the illegal activities of Dr. Joseph Coalo, who is said to have been the main supplier of steroids and human growth hormones to hundreds of law enforcement officers and firefighters in and around New Jersey.

State records show that at least 248 officers from 53 agencies were provided the drugs, mostly at the expense of taxpayers who footed the cost through government-paid health plans. The types of drugs prescribed by Colao are often associated with increased aggression, confusion and reckless behavior.

Colao was found dead in his apartment in August 2007, abruptly shutting of the drug supply for most of the officers. However, the story doesn’t end there. Read the entire article at NJ.com

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FAA loses track of 119,000 planes

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While the California DMV has the daunting task of keeping track of 25 million motor vehicles, consider the relatively simple job of tracking 357,000 private and commercial aircraft in the U.S. If you believe that it’s under control, you probably are wrong.

The Federal Aviation Administration disclosed on Friday that the agency’s records are in such poor shape, that the ownership identity of 119,000 aircraft is uncertain due to missing forms, invalid addresses, unreported sales and other paperwork problems. In many instance, the FAA doesn’t know if the airplane is in a junkyard, or still flying.

The problem concerns authorities because of the risk of terrorists and drug smugglers, groups that routinely use aircraft for illegal purposes. In a number of instances, police and federal agents have already raided the wrong airplane because of problems with incorrect registration numbers.

The FAA is just starting to work on the problem, and will begin cancelling all registration numbers beginning next year, requiring owners to re-register aircraft with current information.

The Associated Press

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