Medicare and Medicaid fraud cases involving pharmacies and pharmacists are being reported and investigated at an alarming rate across the US recently. Just this past week an interesting Medicaid fraud case involving a New Jersey pharmacy was the subject of an investigation that received a great deal of national media attention. The pharmacy located in Lakewood, NJ has agreed to pay back over $878,000 to Medicaid after being unable to provide documentation that they actually bought the medications that were billed to the NJ state run program. After submitting and being paid on a total of over 13,000 claims between 2013 to 2016, the pharmacy was unable to provide invoices to the investigators to prove that the prescription medications were ever purchased. Interestingly, the pharmacy was initially facing paying back a total of an estimated $1.4 million to the program, but subsequently was able to provide receipts, invoices and documentation that reduced the total by over $538,000.
What Makes This Case Interesting
What also makes this case extremely intriguing is the fact that earlier this year twenty-six Lakewood, NJ residents were arrested and charged with Medicaid fraud. The 26 residents were charged with under-reporting their incomes to fraudulently be eligible and receive Medicaid benefits. The arrests followed what state investigators at New Jersey’s Medicaid Fraud Division called “routine inventory analysis” at several area pharmacies (similar to the inventory analysis that took place at the Madison Pharmacy in Lakewood that led to the agreement and settlement this past week). In a controversial move, New Jersey offered all of Ocean Counties’ residents an amnesty program, basically granting them freedom from prosecution if they voluntarily came forward and admitted to any Medicaid fraud. The amnesty program drew widespread criticism from numerous groups across the state that cited that these citizens knowingly broke the law and deserve to be prosecuted for their crimes. Others pointed out that only offering the amnesty program to Ocean County residents was unfair and “playing favorites”. Defenders of the program point out that it really is only a pilot program and that, based upon its effectiveness, the program may be offered statewide at some future date.
It is important to note that anyone that does come forward is required to do the following:
– pay back to Medicaid the amount of money that the illegal benefits they received totaled.
– pay an additional civil penalty that is based upon the amount the illegal benefits they received totaled.
– withdraw from Medicaid for a period of one year.
The program is also limited to a 90 day period and expires after December 12th of 2017. So far the state has not released any information on how many participants have chosen to volunteer and participate in the Medicaid amnesty program.
The “War” Against Medicare and Medicaid Fraud
All of this follows the announcement on July 13th of 2017 by the United States Department of Justice that the largest fraud enforcement action ever undertaken resulted in the arrests of over 400 individuals being charged across the United States with an estimated $1.3 of fraudulent billing to Medicare and Medicaid programs. The massive actions now being undertaken to identify, investigate and hopefully eliminate both Medicare and Medicaid fraud nationally involve coordinated agencies that include the US Justice Department’s Health Care Fraud Unit and its Medicare Fraud Strike Force (MFSF), plus the Criminal Division of the U.S. Attorney’s Offices, the FBI, DEA, DCIS, and State Medicaid Fraud Control Units. In just the last twelve months alone, the Department of Justice has recovered over $2.5 billion in judgments and settlements related to health care fraud.
Additionally coming into the equation is the national opioid epidemic and the war being waged against prescription drug abuse. Initiated by statistics released by the CDC that reveal that over sixty percent (60%) of deaths attributed to drug overdoses involve an opioid and on average ninety-one (91) people die from opioids daily, President Trump declared that the opioid crises is a “Health Emergency” in the US. Most experts predict that major funding will soon be made available on both the federal and state levels to step up both the investigative and enforcement efforts involving healthcare fraud. The action taken in July by the Justice Department charged 120 licensed healthcare professionals that included both doctors and pharmacists who took part in the Medicare fraud schemes. In addition to participating in Medicare fraud, the physicians and pharmacists were charged for their roles in both prescribing and distributing opioids and other narcotics.
Is Your Pharmacy Prepared for a “Routine Inventory Analysis”?
In what is now being labeled as “The Age of Documentation” in the pharmacy business, being both proactive and prepared is a must. It is no longer a question of “will I be inspected and audited?”, but really a question of “when?”. With the increased pressure to prevent both Medicare and Medicaid fraud and prevent opioid abuse, the increases in both state and federal funding and investigative efforts will ultimately result in more inspections, audits and reviews of a pharmacy’s records.
No criminal charges have yet been filed in the recent Lakewood, NJ case and no one has found any evidence of intentional fraud committed by either the pharmacy or its owners. What they are guilty of so far was poor record keeping and a lack of documentation. It has also become very evident that the “burden of proof” now lies on the pharmacy to prove that their records are in order and that their policies and procedures are up to date and being adhered to. The time to get your “house in order” is now!
HCC can help you protect your pharmacy by making sure that you’re prepared for any inspection or audit. Healthcare Consultants is a leading national Pharmacy Consulting company offering expertise in all areas of pharmacy consulting. Known for being one of the nation’s leading pharmacy staffing companies, HCC is in the business of helping pharmacists establish, run, improve and make their businesses profitable for over 28 years now. Known nationally as one of the industry leaders in providing a full range of professional pharmacy consultation services to its vast array of clients, HCC is owned and operated by pharmacists. Healthcare Consultants can provide proven expertise and experience in all facets of pharmacy operations, including retail, hospital and all specialty pharmacy venues. Contact us online or call us today for a Free Consultation at 800-642-1652 to discuss how we can help you.