Health Insurers Crack Down On Doctors’ Painkiller Fraud

June 28--Once doctors start down the path of fraudulently prescribing opioids, they can put eye-popping numbers of pills on the street, writing prescriptions for hundreds of thousands of pills per year and seeing dozens of patients per day, according to Pittsburgh-based health care fraud investigators.

The doctors' activities often leave a paper trail, investigators said, and insurers are sharpening their attention to prescribing patterns that can be one of the first signs of fraud, investigators said.

Insurer Highmark Inc., which received an award Thursday from the Drug Enforcement Agency for recent contributions to prescriber fraud investigations, has formally referred 50 cases to law enforcement over the past three years, said Kurt Spear, the insurer's vice president for financial investigations and provider review. Spear estimated the insurer has informally referred another 50 to 100 cases.

While fraudulent prescribing has not necessarily increased in the past few years, it is getting more attention as opioid overdoses claim a growing number of lives each year, Spear said.

"With the epidemic, the supply and demand, it's certainly become more of an issue than it ever has been," he said.

A health care task force formed two years ago in Western Pennsylvania has taken actions to halt prescribing by 20 doctors in the last two years, 12 of whom have been criminally charged, said Shawn Brokos, the FBI supervisory special agent for the task force, which includes state and federal agencies and health care partners.

Brokos estimated the suspensions have kept $12 million worth of pills off the street. Many of those cases are still under investigation, she said, so she could not discuss details.

Fraudulent prescribing is a primary avenue -- along with forged scripts and drug rings in which a supplier recruits patients -- by which pills reach the street, Brokos said. Once on the street, the drugs fuel addictions that can lead to overdoses or heroin habits, she said.

Insurers use algorithms to identify doctors with prescription practices that might warrant referral to law enforcement agencies, who then determine whether to pursue charges, Spear said.

Investigators look for black-and-white cases, Brokos said, like that of Dr. Oliver Herndon, a Peters Township doctor who pleaded guilty in 2012 to defrauding insurers and drug trafficking.

Herndon was seeing 80 to 120 patients a day, Brokos said.

Before he came to the attention of investigators, 70 percent of his patients were 50 or older.

He started writing inordinately high numbers of opioid prescriptions and by 2011, 90 percent of his patients were 40 or younger and receiving pills based on diagnoses of osteoarthritis, she said.

The street value of Herndon's prescriptions totaled about $38 million, she said, and cost insurers about $2.5 million.

Dr. Alan Barnett of Pittsburgh pleaded guilty in 2016 to possessing and intending to distribute the drug Oxycodone following a Highmark referral.

His arrest stopped the flow of about 216,000 pills per year to the street, Spear said.

Inordinate prescribing by pain doctors is more difficult to spot than high rates of opioid prescriptions by specialists such as podiatrists, he said.

Highmark has a team of about 25 people across Pennsylvania, West Virginia and Delaware who are dedicated to fraud, waste and abuse, Spear said. Three or four of them are dedicated to analytics that focus on aberrant billing by health care providers, he said.

The insurer's anti-fraud programs saved about $149 million in 2016, according to a news release, up from about $59 million in 2012. The programs aim to save $160 million this year, Spear said, adding that the savings ultimately translate to lower insurance costs for members.

A typical fraud case takes two to five years to lead to an indictment, according to Spear. When the FBI launches an investigation, agents often ask doctors to voluntarily give up prescribing privileges, Brokos said.

Brokos said insurers help launch many of its investigations, along with pharmacies and street informants. She said all of the regional insurers in Western Pennsylvania refer cases to the FBI.

UPMC Health Plan declined an interview, but provided a statement:

"Our efforts include using sophisticated software and advanced analytics, working collaboratively with our third-party pharmacy benefits manager to identify prescribers for review, formulary and utilization management, identifying aberrant prescribing trends, pharmacy point-of-sale alerts, and reviewing medical records to verify that the prescribing of the drugs is medically supported."

Aetna and UnitedHealthcare did not provide interviews, but both said they have robust anti-fraud programs.

Wes Venteicher is a Tribune-Review staff writer. Reach him at 412-380-5676, [email protected] or via Twitter @wesventeicher.

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