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#6 Curbing the Abuse and Misuse of Controlled and Non-controlled Drugs in Medicare Part D and Medicaid

Why This Is a Challenge

The Centers for Medicare & Medicaid Services (CMS) oversees prescription drug coverage for 41 million Medicare Part D and more than 72 million Medicaid beneficiaries. Part D is the fastest growing component of the Medicare program. Since its inception in 2006, Part D spending has more than doubled to $137 billion in 2015. Medicaid expenditures for prescription drugs are also increasing, influenced by Medicaid expansion and increasing expenditures for expensive specialty drugs. In FY 2014, Medicaid spent approximately $22 billion, 5 percent of total Medicaid spending, on prescription drugs. HHS's oversight of its prescription drug programs faces numerous challenges, affecting beneficiary and community safety and the integrity of the benefit itself.

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Key Components of the Challenge

Oversight. The Part D and Medicaid prescription drug programs are large and complex. In Part D, CMS contracts with plan sponsors, which are responsible for paying claims, monitoring billing patterns, and establishing compliance plans, among other things. CMS also contracts with the Medicare Drug Integrity Contractor to detect and prevent fraud, waste, and abuse in Part D. OIG has identified challenges concerning all of the players charged with safeguarding the program. These challenges relate to (1) the need to more effectively collect and analyze program data to proactively identify and resolve program vulnerabilities and prevent fraud, waste, and abuse before it occurs; and (2) the need to more fully implement robust oversight to ensure appropriate payments, prevent fraud, and protect beneficiaries. (For information on Medicaid's oversight challenges related to other services, see TMC #2.)

Drug Abuse and Diversion. Pharmaceutical fraud and drug diversion continue to rise. In FY 2015, OIG had 571 investigative cases and pending complaints involving Medicare and Medicaid prescription drug fraud. In FY 2016, the number of investigative cases and pending complaints rose to 692. Medicaid Fraud Control Units also investigate drug diversion, and they reported to OIG that they had 553 open drug diversion cases, 117 related convictions, and $4.3 million in recoveries related to drug diversion in FY 2015.

Abuse and Misuse of Controlled Substances. According to the Centers for Disease Control and Prevention, the use of opiates (drugs commonly used for pain relief) and other controlled substances has reached epidemic proportions, with more than 2 million people abusing or dependent upon prescription opioids. Nearly one in three Part D beneficiaries received commonly-abused opioids in 2015. Part D spending for these drugs reached $4.1 billion in 2015, a 165 percent increase since the program started in 2006. In addition to concerns this trend may raise around questionable and inappropriate utilization, novel abuse methods and refinement techniques present new challenges.

Several HHS operating divisions are responsible for programs related to the safety and efficacy of drugs and drug abuse prevention and treatment. Effectively coordinating all Departmental efforts and prioritizing initiatives are key to combating this complex epidemic. (For more information on challenges for the Food and Drug Administration (FDA) and Medicaid, see TMCs #10 and #2.)

Abuse and Misuse of Non-controlled Substances. It is often under-recognized that many non-controlled substances are abused along with opiates to enhance euphoria. These medically-inappropriate dosages and combinations contribute to adverse events, including respiratory depression (hypoventilation) and death. Additionally, Part D spending for compounded drugs (drugs that have been combined, mixed, or altered to create a medication tailored to the needs of an individual patient) increased significantly, particularly for topical medications that have risen by 3,400 percent since 2006. This rapid growth, along with a growing number of fraud cases involving medically-unnecessary compounded drugs, could indicate an emerging fraud trend. (For more information on ensuring Medicaid quality of care, see TMC #2, and for more information on compounded drugs, see TMC #10.)

Progress in Addressing the Challenge

Reducing Questionable and Inappropriate Utilization. CMS has taken steps to improve the oversight provided by the key players tasked with safeguarding Part D. For example, CMS updated its audit process to ensure that sponsors' compliance programs addressed all of the required compliance program elements. When implemented successfully, a compliance plan that includes a comprehensive fraud, waste, and abuse program helps plan sponsors protect the integrity of Medicare funds and may also improve the operating efficiency and effectiveness of plan sponsors. CMS is also taking steps to prevent pharmacy billing fraud and overutilization of prescription drugs. Specifically, CMS has implemented a system to reject payments for Part D prescriptions written by providers who have been excluded from Federal health care programs.

In April 2015, CMS launched Predictive Learning Analytics Tracking Outcome (PLATO), a web-based tool to allow CMS, law enforcement, and plan sponsors to share information and coordinate actions against high-risk pharmacies and prescribers.

Reducing Abuse and Misuse of Controlled Substances. CMS started publicly sharing data to raise community awareness among providers and local public health officials about regional opioid-prescribing habits. In November 2015, CMS released an interactive online mapping tool, which shows geographic comparisons at the State, county, and ZIP code levels of Medicare Part D opioid prescriptions (excluding private and personal information). HHS has also taken actions to restrict the manufacture, possession, or use of potentially dangerous controlled substances. For example, FDA published abuse deterrent guidelines for manufacturers to make tamper-resistant products. FDA also requires that drug manufacturers develop and implement Risk Evaluation and Mitigation Strategies (REMS) for certain drugs, including many controlled substances. Also, many State Medicaid programs reported savings linked to implementing lock-in programs, which restrict certain beneficiaries to certain pharmacies or prescribers.

CMS supports States' efforts to improve care for individuals with substance use disorders, including individuals with opioid use disorder. Over the past several years, CMS has provided States with information and program support to enhance coverage for behavioral health conditions. For example, CMS has been providing technical support to States regarding improvements to their substance use disorder systems through the Medicaid Innovation Accelerator Program, which seeks to improve health care for Medicaid beneficiaries by supporting States' ongoing payment and delivery system reform efforts.

Reducing Abuse and Misuse of Non-controlled Substances. OIG has performed educational outreach to pharmacists in all 50 States on the dangers of mixing non-controlled medications with opiates as part of the substance abuse spectrum. CMS updated its Drug Diversion Toolkit, which provides education on the diversion of controlled and non-controlled medications.

What Needs To Be Done

To fully protect Part D from fraud, waste, and abuse, CMS should take further action and implement OIG's unimplemented recommendations to improve program oversight. For example, OIG recommended that CMS require plan sponsors to report the number of instances of fraud, waste, and abuse in their Part D plans and the corrective actions they subsequently took. This information will enable CMS to monitor the effectiveness of Part D plans' efforts to protect the program. Prescription Drug Monitoring Programs (PDMP) can help curb excessive and inappropriate prescribing. State continuity on requirements for checking the database, and State access to the data for utilization reviews, would assist in strengthening the program. HHS should support efforts to integrate PDMP data into the broader health care system.

HHS should continue to prioritize efforts to reduce opioid misuse and abuse. In Part D, implementing a lock-in program for certain Medicare beneficiaries, the authority for which was recently granted by Congress, would help the program more effectively protect beneficiaries from the harm of inappropriate utilization and also protect the program from drug diversion. With respect to the misuse and abuse of non-controlled substances, CMS and plan sponsors should monitor beneficiary use of a wider range of drugs that are frequently abused. In particular, CMS should expand drug utilization review programs to include additional drugs susceptible to fraud, waste, and abuse, focusing particularly on non-controlled drugs that are abused in conjunction with opioids. Additionally, FDA should continue to assess how best to use the REMS program and other strategies to improve medication safety.

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