Crooks are taking advantage of lax oversight in Medicare’s Part D prescription-drug program to obtain highly addictive drugs including oxycodone, Ritalin, and methadone, according to results of a federal investigation. Pharmacies and other Medicare contractors are supposed to enter in a form a number that identifies prescribers. But in many cases, that information is being left blank or assigned a dummy number, the report found. The missing information doesn’t always indicate fraud and could include clerical errors, but without prescriber identifiers, it’s hard for investigators to determine.

Questions:

1.     What types of overrides of internal controls are allowing the situation mentioned in the article to happen? What types of overrides of internal controls are allowing the situation mentioned in the video to happen?

 2. The article mentioned that “the CMS paid $20.6 million for 228,000 prescriptions for so-called Schedule II drugs with invalid prescriber IDs in 2007.”  What does this work out as the average price per prescription?

 3. How do you think that pharmacies would record in their accounting records the prescriptions that they fill on Medicare D?

 4. What types of costs do the problems mentioned in the video result in for taxpayers? What types of costs do the problems mentioned in the article result in for taxpayers?

5. What recommendations would you make to eliminate either of these two fraudulent issues related to Medicare Part D? Explain.

Sources:

Kennedy, K. (2011) Lax scrutiny of Medicare Part D tied to drug fraud, The Philadelphia Inquirer-Digital, Feb. 12 (Retrievable online at http://www.philly.com/philly/business/116045359.html)

Kavilanz, Parija (2011). Drug Shortages at All-Time High, CNN.com, June 10 ((Retrievable online at http://money.cnn.com/2011/06/10/news/economy/drug_shortages_fda/index.htm)