Drug Diversion and Abuse: Rx Diversion Costing Health Insurers

John Burke, commander ofthe Warren County, Ohio,drug task force and retiredcommander of the CincinnatiPolice PharmaceuticalDiversion Squad, is a 40-yearveteran of law enforcement.Cmdr Burke also is the currentpresident of theNational Association of Drug DiversionInvestigators. For information, he can bereached by e-mail at linkEmail('burke','choice.net');, viathe Web site www.rxdiversion.com, or byphone at 513-336-0070.

My friend Bill Mahon recentlyauthored an excellent report,entitled "Prescriptionfor Peril," in the December 2007Coalition Against Insurance FraudInsight series. This detailed reportexplains the problem of drug diversionthat has cost health care insurers andultimately the general public billions ofdollars.

The report cites a 2005 edition of theJournal of Managed Care Pharmacythat indicated that opioid abusers hadhealth care costs that were roughly 8times higher than those of nonabusers.Per-patient costs of opioid abuserswere $15,884 per year, compared withonly $1830 for nonabusers. These statisticswere compiled from data of insuredmembers of 16 large self-insuredemployers in a variety of industries.

Although prescription drugs are thegoal of abusers, they represent only arelatively small percentage of the costassociated with drug diverters. Enormouscosts associated with physicianvisits, procedures, x-rays, and hospitaland emergency department visits faroutweigh the mere costs of the pharmaceuticalsobtained.

Notably, some of these people areuninsured, but many continue to soakup the public?s resources by usingMedicaid, Workers? Compensation, andVeterans? Hospitals. In fact, private insurersare the victims in about onethird of abuse cases.

One estimate is that drug diversioncosts all insurers about $72.5 billioneach year. Of course, as health carecosts increase, this figure also is likelyto increase. Remember that this studyinvolves only opioids, not other abusedpharmaceuticals, such as stimulants,benzodiazepines, and steroids.

My experience over the years in drugdiversion work is that, with a fewnotable exceptions, private healthinsurers have been slow to respond tothis decade-long problem of prescriptiondrug abuse. This phenomenon hasalways been perplexing to me becauseit obviously affects the private healthinsurers? bottom line.

From our readers...

The January 2008 edition of this column,"Drug Diversion and Abuse: ?DoNot Fill Until...,'" generated someinterest in the question of whetherthe Drug Enforcement Administration(DEA) ruling (in the Federal Register,stating that prescribers could writeprescriptions for CII controlled substancesfor up to a 90-day supply)would also extend to stimulant medications,as used for the treatment ofattention-deficit/hyperactivity disorder.After verifying with the DEA andhis state pharmacy board (Ohio), theauthor reports that both organizationsagree that the rule encompassesall CII drugs, including stimulantslike methylphenidate. There is no reasonthat prescribers cannot writeunder the same rules as discussedfor analgesics. Thank you very muchfor your feedback!

According to Mahon?s report, thecost of drug diversion to private healthinsurers is close to $25 billion per year!This is no small amount of money inany insurer?s eyes and a definite influenceon the health care insurance premiumswe all pay.

State Medicaid and Workers? Compensationenforcement efforts havebeen more diligent than those of theirprivate-insurance peers, in my experience.Although oftentimes operatingwith less than adequate staffing andlimited funding, most seem to do thebest they can in this seemingly neverendingbattle to identify abusers andtry to bring them to justice. Goodhealth care insurance-fraud investigatorswill save their companies or publicagencies many times their individualsalaries, to say nothing of the preventioneffects generated by a few wellplacedpress releases on arrests.

Mahon offers one method of identifyingand ultimately reducing thiscrime problem: prescription-monitoringprograms. I have written and testifiedmultiple times on the fact thateffective prescription-monitoring programsmore than pay for themselves inthe reduction of health care fraud forthe states. It would be money and timewell spent for private insurers to lobbyfor these programs and to step up toprovide funding to ensure that theseprograms work. The return on investmentfor these for-profit companieswould be huge.

The programs need to be lawenforcement friendly—meaning easy,legal access to the information withouta subpoena or a search warrant. Thismay require some legislative changes,but a model exists in my home state ofOhio that covers all controlled-substanceprescriptions, with easy andquick access by law enforcement.

I applaud the efforts of Mahon andthis revealing report. He urges a consolidatedeffort by all of the parties concernedto make a significant reductionin health care fraud caused by drugdiversion.