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Medicare's New Payment Method: Stops prescription for certain pharmacies

Medicare announces new payment method

Washington, DC - In the past, the Centers for Medicare and Medicaid Services (CMS) did not have adequate time available to investigate suspicions of prescription fraud, as they only have 14 days in which to make payments to providers. But now, Vice President Biden and HHS Secretary Kathleen Sebelius have taken steps to stop payments to suspicious pharmacies in a move that will not only detect fraud, but will also save billions in healthcare dollars.

In 2009, VP Biden and HHS Secretary vowed that Healthcare Reform would ultimately protect seniors and prevent the burden of out of pocket costs. Biden calls the move to prevent Medicare fraud part of the “continued commitment to cutting waste and protecting taxpayers.”

Medicare payments previously

Previously, under a scenario known as “pay and chase,” Medicare would reimburse an operation posing as a pharmacy for prescriptions such as painkillers. Later, officials would learn of the fraudulent claims, but the pharmacy would disappear or the Medicare recipient would not have the money to repay CMS.

The Centers of Disease Control and Prevention (CDC) notes that prescription painkiller abuse has increased in recent years. In 2010, a government study found a 400% increase in the number of people admitted to treatment for abusing prescription pain medication. About 12 million Americans in that year used opium-based pain relievers without a prescription and the non-medical use of these drugs is now the second most prevalent form of illicit drug use in the nation, says Pamela S. Hyde, Administrator of the Substance Abuse and Mental Health Services Administration (SAMHSA).

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Over the past year, the Justice Department has recovered $2.9 billion in health care fraud. Most of it is recovered only because officials detect the fraud before the bills were paid. In many cases, patients travel several hundred miles from their homes to use pharmacies to fill prescription drugs or receive duplicate prescriptions from different physicians.

"We have the Government Accountability Office telling us that 170,000 Medicare beneficiaries had received prescriptions from five or more doctors for frequently-abused drugs like Oxycontin and Percocet," Sebelius said. "Not all of the cases are fraudulent, but some of them certainly are.” In 2008, for example, one patient received 3,655 Oxycodone pills from 58 different prescribers.

One method suggested to prevent fraud is the use of electronic records, which will eliminate the need for paper prescriptions and will reduce duplications. In addition, said Joshua Stein, Senior VP for OptumRx, this will prevent the theft of paper prescription pads.

Another way to prevent excessive prescription filings is to improve communication between Medicare and private insurers. Some patients do have private supplemental insurance in addition to Medicare, and when these two entities do not communicate, duplications can happen. Insurers are also trying to limit the number of pharmacies available to fill prescriptions for their beneficiaries.

Providers will also go through tougher screening procedures before they are able to start billing Medicare, said Sebelius.

"Prescription fraud plagues the entire healthcare system," Sebelius concluded. The new anti-fraud system will save both government from wasteful spending and will save beneficiaries in the long run through reduced unnecessary expenditures in Medicare.



This is a good move by Medicare. Hope the move will make the health insurance more affordable in the nation as billions of dollars will be freed to work for better purpose. The only question is, will this hit small mom and pop pharmacies?