Diversion and Fraud Related to Prescription
Abuse: Case Studies
November 10, 2008
South Portland, ME
Rebecca S Busch, RN, MBA, CCM, CFE, FHFMA
Rebecca Busch, RN, MBA, CCM, CFE, FHFMA
MBA Inc. Copyright 2008
City woman charged with selling
drugs Courier-Times Staff Report
A woman from New Castle is accused of illegally selling two prescription
drugs to an undercover buyer.
Margaret A. Kern, 48, appeared in court on Wednesday after her arrest on
Tuesday. Charges filed on Oct. 22 allege dealing in a Schedule 2 controlled
substance, Class A felony, dealing in a Schedule 4 controlled substance,
Class B felony, and maintaining a common nuisance, Class D felony.
The alleged drug deal happened at Beckford Place Apartments, 2900 S.
Memorial Drive, Apt. 403, New Castle. Reportedly, the buyer exchanged
cash for hydrocodone and alprazolam pills in early 2008. Hydrocodone is a
painkiller and alprazolam is an anti-anxiety medication.
The dealing charges leveled against Kern were upgraded from Class B and
C felonies because they happened in an apartment complex. A pretrial
conference is set for Jan. 26, and a jury trial is scheduled for March 2. A
public defender has been appointed to represent Kern.
Rebecca Busch, RN, MBA, CCM, CFE, FHFMA
MBA Inc. Copyright 2008
More than 50 arrests made in
"Operation Bad Medicine"
St. Lucie County Sheriff Mascara announces 53 arrests in three-month
"Operation Bad Medicine."
A three-month St. Lucie County Sheriff's Office investigation into prescription
fraud, doctor shopping and illegal sales of prescription drugs has resulted
in 53 arrests for a total of 98 charges and the seizure of more than 3,000 pills,
according to Sheriff Ken J. Mascara.
Rebecca Busch, RN, MBA, CCM, CFE, FHFMA
MBA Inc. Copyright 2008
Doc arrested in Mobile, Ala., child abuse case lost
license to practice medicine over use of drugs
A former doctor accused of abusing an 8-month-old lost his medical license six years ago
after regulators accused him of using his position to feed a prescription-drug habit.
When the Alabama Board of Medical Examiners finished investigating Dr. David Dodd
Ozment in April 2002, it immediately suspended his license, saying that his continued
practice constituted an "immediate danger to patients and the public."
The revocation was only temporary, pending a full hearing on the matter, but Ozment
voluntarily surrendered his license two months later, and the board dropped its
complaint, according to board documents.
Ozment, 41, was arrested Tuesday and charged with willful abuse of a child and
practicing medicine without a license.
Police said an 8-month-old boy Ozment was baby-sitting suffered third-degree burns
caused by hot water in a bathtub. The boy also had bruises on his face and body,
police said.
Mobile police spokesman Sgt. Marcus Young said Ozment had been giving the child
medical treatment out of his home for months.
Investigators are still trying to find out if Ozment had other patients as well.
He was released on $3,500 bail Tuesday night. Attempts by the Press-Register to contact
him were unsuccessful.
According to the findings by the Alabama Board of Medical Examiners' investigation,
Ozment: Filled 460 prescriptions, predominantly for controlled substances, for himself
during a period of two years. Forty-three of those prescriptions were filled during one
month at a single pharmacy.
Rebecca Busch, RN, MBA, CCM, CFE, FHFMA
MBA Inc. Copyright 2008
Two men convicted in pharmacy
burglary conspiracy- EAST ST. LOUIS -•
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A federal jury in East St. Louis convicted two West Virginia men Wednesday in connection with the burglaries of
about 85 pharmacies in 10 states, including Southern Illinois.
The jury also returned special verdicts finding that four deaths resulted from the drug-trafficking scheme of Rex. I.
Hatfield, 52, and his brother, Everly K. Hatfield, 48, both of Oceana. Because of this, the two face up to life in
prison when they are sentenced Jan. 30.
The Hatfields were convicted of conspiracy to commit pharmacy burglaries and conspiracy to distribute controlled
substances, according to information released by the U.S. attorney's office.
More than 100 witnesses testified in the nearly monthlong trial, which was prosecuted by assistant U.S. attorneys
Robert L. Garrison and Nicole E. Gorovsky.
According to testimony, the Hatfields headed a group that committed the burglaries, a dozen of which occurred in
Southern Illinois communities including Flora, Eldorado, Fairfield, Mattoon, Metropolis and Carmi, and five of which
occurred in Missouri communities including St. Charles, Crestwood, Seneca and St. Joseph.
Between 1998 and 2004, the group stole more than $500,000 worth of controlled substances, such as Oxycontin
pills and morphine patches. The Hatfield transported the stolen pharmaceuticals to West Virginia and Virginia and
sold them to drug traffickers working for them, according to testimony in the case.
The jury determined the Hatfield's scheme resulted in four deaths, including the 2001 death of Deborah Smith in
Honaker, Va. and the 2002 death of Carol Walker in Glen Fork, W.Va. Witnesses testified the brothers suspected
the two women of being police informants and had bragged after the two died, claiming they had prevented them
from testifying, according to information released by the U.S. Attorney's Office.
Jurors also found the brothers responsible for the drug-related, life-threatening injuries to a Glen White, W.Va.,
man who they believed planned to testify against them. When the man collapsed and stopped breathing after a
drug injection, Everly Hatfield said, "Let him die. Don't revive him," according to testimony.
The case against the Hatfields was investigated over a four-year period by agents of the federal Drug Enforcement
Administration and federal Bureau of Alcohol, Tobacco, Firearms and Explosives and investigators of the Madison
County Sheriff's Department, Russell County, Va., Sheriff's Department and Oceana Police Department.
Rebecca Busch, RN, MBA, CCM, CFE, FHFMA
MBA Inc. Copyright 2008
Expired Drugs Sold
• New York Attorney General Andrew M.
Cuomo initiated legal
action against CVS and Rite
Aid pharmacies after a statewide
investigation found it had sold expired
products, including over-the-counter
medications.
Rebecca Busch, RN, MBA, CCM, CFE, FHFMA
MBA Inc. Copyright 2008
Prescription drugs growing problem
in community
The AHEAD coalition has tried to provide
information and support to one
mother who is trying to keep her adult
daughter from getting
Vicodin prescriptions because she is
abusing that medication. We heard from
another parent who is
concerned about how prescriptions are
being locked up in her child’s friends’
homes because her son is drug-seeking.
Rebecca Busch, RN, MBA, CCM, CFE, FHFMA
MBA Inc. Copyright 2008
“Free trade zones allow counterfeiters
to evade the laws of the country”
• “DUBAI, United Arab Emirates — Along a seemingly
endless row of identical gray warehouses, a lone guard
stands watch over a shuttered storage area
with a peeling green and yellow sign: Euro Gulf Trading.”
“Three months ago, when the authorities announced that
they had seized a large cache of counterfeit drugs from
Euro Gulf’s warehouse deep inside a sprawling free
trade zone here, they gave no hint of the raid’s global
significance.”
Rebecca Busch, RN, MBA, CCM, CFE, FHFMA
MBA Inc. Copyright 2008
British customs officials made a troubling
discovery at Heathrow Airport in London.
“They intercepted 846 pounds of
pharmaceuticals, mostly counterfeits of
products made by such well-known
companies as Merck, Novartis,
AstraZeneca, Pfizer and Procter &
Gamble. Some medication contained
traces of metal.”
Rebecca Busch, RN, MBA, CCM, CFE, FHFMA
MBA Inc. Copyright 2008
RX Medicare Fraud Initiatives:
Plan Sponsor Perpetrators
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Failure to provide medically necessary services
Marketing Schemes
Improper bid submissions
Payments for excluded drugs
Multiple billing
Non-Compendium Payments
Inappropriate formulary decisions
Inappropriate Enrollment/Disenrollment
Appeals process handled incorrectly
Adverse Selection
False information
Rebecca Busch, RN, MBA, CCM, CFE, FHFMA
MBA Inc. Copyright 2008
RX Medicare Fraud Initiatives:
Plan Sponsor Perpetrators
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Delinquent reimbursements
Duplicative premiums
Excessive premiums
Inaccuracies in eligibility or coordination of benefits
Incorrect calculation of TrOOP
Inaccurate data submission
Catastrophic coverage manipulation
Failure to disclose or misrepresentation of rebates,
discounts or price
• Bait and switch pricing
• Manipulation of low-income subsidy enrollees
Rebecca Busch, RN, MBA, CCM, CFE, FHFMA
MBA Inc. Copyright 2008
RX Medicare Fraud Initiatives:
PBM Perpetrators
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•
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Prescription drug switching
Unlawful remuneration
Inappropriate formulary decisions
Prescription drug splitting or shorting
Failure to offer negotiated prices
Rebecca Busch, RN, MBA, CCM, CFE, FHFMA
MBA Inc. Copyright 2008
RX Medicare Fraud Initiatives:
Pharmacy Perpetrators
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Inappropriate billing practices
Prescription drug shorting
Bait and switch pricing
Prescription forging or altering
Dispensing expired or adulterated prescription
drugs
Prescription refill errors
Illegal remuneration schemes
TrOOP manipulation
Failure to offer negotiated prices
Rebecca Busch, RN, MBA, CCM, CFE, FHFMA
MBA Inc. Copyright 2008
RX Medicare Fraud Initiatives:
Prescriber Perpetrators
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Illegal remuneration schemes
Prescription drug switching
Script mills
Provision of false information
Theft of prescriber’s DEA number or
prescription pad
Rebecca Busch, RN, MBA, CCM, CFE, FHFMA
MBA Inc. Copyright 2008
RX Medicare Fraud Initiatives:
Wholesaler Perpetrators
• Counterfeit and adulterated drugs through
black and grey market purchases
• Diverters
• Inappropriate documentation of pricing
information
Rebecca Busch, RN, MBA, CCM, CFE, FHFMA
MBA Inc. Copyright 2008
RX Medicare Fraud Initiatives:
Pharmaceutical Perpetrators
• Lack of integrity of data to establish
payment and/or determine reimbursement
• Kickbacks, inducements and other illegal
remuneration
• Formulary and formulary support services
• Inappropriate relationships with physicians
• Illegal off-label promotion
• Illegal usage of free samples
Rebecca Busch, RN, MBA, CCM, CFE, FHFMA
MBA Inc. Copyright 2008
RX Medicare Fraud Initiatives:
Medicare Beneficiary Perpetrators
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Misrepresentations of status
Identity theft
TrOOP manipulation
Prescription forging or altering
Prescription diversion and inappropriate use
Resale of drugs on black market
Prescription stockpiling
Doctor shopping
Improper Coordination of Benefits
Marketing Schemes
Rebecca Busch, RN, MBA, CCM, CFE, FHFMA
MBA Inc. Copyright 2008
RX Medicare Fraud Initiatives:
Medicare Beneficiary Perpetrators
•
•
•
•
•
•
•
•
•
•
Misrepresentations of status
Identity theft
TrOOP manipulation
Prescription forging or altering
Prescription diversion and inappropriate use
Resale of drugs on black market
Prescription stockpiling
Doctor shopping
Improper Coordination of Benefits
Marketing Schemes
Rebecca Busch, RN, MBA, CCM, CFE, FHFMA
MBA Inc. Copyright 2008
Movement of $, PHI, RX
Healthcare Continuum Chart
$ and PHI
Plan Sponsors
Patients
Private
Private and
and Public
Public
Payers
Payers
Insured
Government
Employer
Office of
Personnel
Management
MBA
consulting
and
audit work
Employee
Healthcare
Healthcare
Providers
Providers
Gov. Employee
Solvent
Uninsured
rd Party
33rd
Party
Service
Service Providers
Providers
Insolvent
Uninsured
White
White Collar
Collar and
and Organized
Organized Crime
Crime
Rebecca Busch, RN, MBA, CCM, CFE, FHFMA
MBA Inc. Copyright 2008
Movement of $, PHI, RX
PBM Continuum Chart
Plan Sponsors
Government
Private
Private and
and
Public
Public Payers
Payers
(TPA)
(TPA)
Patients
Insured
PBM
PBM
Employee
Employer
Office of
Personnel
Management
Broker
Broker
MBA
consulting
and
audit work
Pharmacy
Pharmacy
Gov. Employee
Solvent
Uninsured
Wholesaler
Wholesaler
Manufacturer
Manufacturer
Insolvent
Uninsured
White
White Collar
Collar and
and Organized
Organized Crime
Crime
Rebecca Busch, RN, MBA, CCM, CFE, FHFMA
MBA Inc. Copyright 2008
Movement of $, PHI, RX
PBM Operational Pipeline Chart
Rx
Contracts
Yes
TPA
Contract
Health
Plan
Provides Rx benefits to a group, premium/cost payments to
the TPA. Recipient of applicable rebates
Broker
TPA
R
TPA collects funds from health plan, pays PBM, may be paid by PBM
for services
$
PBM provides payment to Pharmacy for drug costs, receives
price discounts for insured patients.
PBM
$
$
Pharmacy
D
DP
$ - money exchange
D – Discounted Price
DP- Discounted Product
Audits in the following areas:
HIP – Health information
audits; ARP- Accounts
Receivable & Fee schedule
Audits: OFA – operational flow
assessments & internal
controls
Provide benefit plan design, may be compensated by health plan, TPA, and or
PBM
$
P
Plan Sponsor
Contract
Recipient of Drug, premium payments to the health plan, cost
sharing by paying Pharmacy out of pocket
Insured
Patient
$
PBM
Contract
R
Provides discounts to PBM, receives payments
from PBM, provides drug to patient
Pharmaceutical
Wholesaler
$
Sell Products
Pharmaceutical
Manufacturer
R – Rebates
P- Product
Rebecca Busch, RN, MBA, CCM, CFE, FHFMA
MBA Inc. Copyright 2008
Movement of $, PHI, RX
ACCOUNTS RECEIVABLE PIPELINE: Operational
Flow Activity (OFA) (Product Market Activity)
HCC:
HCC: Others:
Others:
Pharmaceuticals
Pharmaceuticals
Drug Research
HIP;
HIP; ARP;
ARP; OFA;
OFA;
PMA;
PMA; SMA;
SMA; CMA
CMA
Flows
Flows
Contractual
arrangements
Drug
Drug market
market
activity:
activity: sample
sample
application
application
FDA Approvals
Drug Manufacture- foreign vs. domestic
(re) Packaging
Drug (re) Distribution
primary wholesale
Drug (re) Distribution
secondary wholesale
(re) Packaging
Drug (re) Distribution – retail domestic & foreign:
Physicians…Pharmacies…PBMs, Facility Based
Care (licensed facility, pharmacists, physicians)
Layered
Operational
flow activity,
complex
contracts $
flows, approved
relationships
Contemporaneous,
cyclical, recurring
activity – create
weak links
Research, Regulatory/Gov Requirements, Compliance,
Distribution, Packaging, Wholesale, Retail:
Requirements & Standards
Rebecca Busch, RN, MBA, CCM, CFE, FHFMA
MBA Inc. Copyright 2008
Movement of $, PHI, RX
ACCOUNTS RECEIVABLE PIPELINE : Operational
Flow Activity (OFA) (ILLICIT Market Activity)
Marketing & Sales
Misrepresentations
throughout
Illness, Wellness, & Support Health Services
Research
FDA & Regulatory
Approvals & Licenses
Waste,
fraud,
abuse
Service Developers - foreign vs. domestic
Manipulations of service &
pricing; illicit
distributions;
introduction of altered
service, quackery,
substandard care,
counterfeit
(re) Packaging
Service (re) Production, Provision,
& Distribution
primary wholesale
Service
Service market
market
activity:
sample
activity: sample
application
application
Service (re) Production,
Provision, & Distribution
secondary wholesale
(re) Packaging
Service (re) Production, Provision, & Distribution – retail domestic &
foreign: Physicians…Pharmacies…PBMs...Facility Based Care
(licensed facility, pharmacists, physicians)
Research, Regulatory/Gov Requirements, Compliance,
Distribution, Packaging, Wholesale, Retail, Marketing
& Sales: Requirements & Standards
False Research;
unlicensed;
noncompliance
Medically unnecessary
Production, Provision,
& distribution
Benefit Plan
Manipulations;
false claims;
vendor,
employee,
corporate fraud;
organized crime;
kickbacks
Rebecca Busch, RN, MBA, CCM, CFE, FHFMA
MBA Inc. Copyright 2008
Movement of $, PHI, RX
Payer Operational Pipeline Chart
Provider Bill Submitted to TPA
(HIP) What electronic claims system is being utilized? Do they
have a SAS 70 report? Did you read it? (ARP) What are the
financial terms & fee schedules? (OFA) How is clinical data
managed versus financial?
PPO Network processing, if applicable
Plan document verification
PBM
(HIP) How many providers do they have under
contract? (ARP) What percentage of claims are
being paid within and out of network? (OFA) How
are these claims paid and processes?
Adjudication
•Audits/investigations
•Eligibility of claimant
•Eligibility of charges
EOB (Explanation of Benefits)
•Calculate benefit
•Apply appropriate
deductions, co-insurance
•Verify maximum limits
•Process check or denial
•Other Audits/Reviews
Disbursement/Payment
 (HIP) What management reports are
used for tracking claims? (ARP) What
internal controls are in place to verify
contractual guarantees? (OFA) How
can it be audited and corroborated?
(Payer Fund)
(Employer Fund)
Provider Processing/Follow Ups
(HIP) How are false claims
investigated? (ARP) What were the
actual results from the prior year?
(OFA) What procedures are used for
False Claim Activity?
Employer Processing/Follow Ups
TPA Reports
Rebecca Busch, RN, MBA, CCM, CFE, FHFMA
MBA Inc. Copyright 2008
Sample Data Mining
Claims Missing Prescriber Identification
Sample
Test
Query:
Result:
Deficiency:
Internal
Controls
Corrective Action
Taken By
Management:
Suggestion:
Management
Response:
Medications dispensed without a recorded prescriber
identification
Several occurrences discovered in which pharmacies
dispensed medication without recording prescriber
identification.
The table in Appendix 41 indicates 27 incidences where
pharmacies dispensed medication without recording
prescriber identification. The amount of money spent on
these claims totals $xx,xxx.xx.
Will meet with PBM and RX. Findings will be reported June
xxxx.
Evaluate internal controls for dispensing medications without
a prescriber ID.
Will meet with PBM and RX. Findings will be reported June
xxxx.
Rebecca Busch, RN, MBA, CCM, CFE, FHFMA
MBA Inc. Copyright 2008
Sample Data Mining
Claims Missing Prescriber Identification
Rebecca Busch, RN, MBA, CCM, CFE, FHFMA
MBA Inc. Copyright 2008
Sample Data Mining
Claims with Irregular (same) Provider Identification
Sample
Test
Query:
Medications
dispensed
with
a
recorded
prescriber
identification attributed to multiple prescriber last names
Result:
Numerous occurrences discovered in which pharmacies
dispensed medication with a recorded prescriber identification
attributed to prescribers with different last names.
Deficiency:
Internal
Controls
The table in Appendix 42 indicates 495 incidences where
pharmacies dispensed medication with a recorded prescriber
identification attributed to prescribers with different last
names. The amount of money spent on these claims totals
$85,931.64.
Corrective Action Taken By Will meet with PBM and RX. Findings will be reported June
Management:
xxxx.
Suggestion:
Evaluate internal controls for dispensing medications from
providers who are sharing the name ID. Discussing and
requesting PBM’s controls is appropriate.
Management Response:
This is the mail-in program as verified 3/24/xx, hence the
same ID used to signify mail-in. Will meet with PBM and RX.
Findings will be reported June xxxx.
Rebecca Busch, RN, MBA, CCM, CFE, FHFMA
MBA Inc. Copyright 2008
Sample Data Mining
Claims with Irregular (same) Provider Identification
Rebecca Busch, RN, MBA, CCM, CFE, FHFMA
MBA Inc. Copyright 2008
Sample Data Mining
Beneficiary Abused Meds
Sample Test
Internal
Controls
Query:
Result:
Top 20 medication use (by dollar amount)
Applicable amounts are indicated in Appendix 34.
Observation:
High profile medications susceptible to abuse are
highlighted in the table below.
Clarify vendor surveillance activity.
RX to see if proper protocol established for these
high profile medications to monitor abuse or over
dispensing. Will meet with XXXX May 9th for
proper protocol. Will forward findings by end of
June XXXX.
Suggestion:
Management
Response:
Rebecca Busch, RN, MBA, CCM, CFE, FHFMA
MBA Inc. Copyright 2008
Sample Data Mining
Beneficiary Abused Meds
Sample Data
Product Service
Description
NEXIUM
LIPITOR
SINGULAIR
HYDROCODONEACETAMINOP
ADVAIR DISKUS
CYMBALTA
LEXAPRO
VYTORIN
EFFEXOR XR
ZYRTEC
CELEBREX
PREVACID
ADDERALL XR
ACTOS
SIMVASTATIN
OXYCONTIN
NEXAVAR
PLAVIX
LEVAQUIN
AZITHROMYCIN
Usual & Customary
Amount
Pharmacy
Submitted
Amount
Ingredient Cost Submitted
Ingredient Cost
Dispensing
Fee
$171,542.03
$117,460.88
$67,306.35
$169,144.59
$116,711.24
$64,574.54
$172,742.83
$119,100.23
$66,859.77
$156,839.02
$107,795.46
$57,801.00
$787.77
$872.28
$635.85
$66,378.77
$66,288.23
$66,102.19
$64,234.86
$63,440.84
$63,209.87
$52,812.89
$52,785.01
$52,311.45
$52,074.20
$51,835.44
$51,221.05
$49,698.18
$49,111.33
$48,184.41
$44,732.47
$43,221.47
$56,846.10
$65,781.03
$64,028.01
$61,144.04
$61,906.85
$60,843.46
$48,716.57
$51,726.93
$51,591.23
$47,492.43
$50,940.25
$63,401.72
$49,574.14
$49,093.20
$48,432.10
$42,538.79
$41,699.61
$66,289.34
$66,417.56
$66,072.15
$63,574.57
$64,274.64
$62,569.89
$50,780.47
$53,235.50
$52,371.15
$50,378.58
$52,847.81
$58,839.70
$49,955.11
$49,111.33
$49,431.29
$44,050.46
$45,536.15
$32,955.96
$60,447.78
$56,410.78
$56,935.04
$56,328.00
$55,485.30
$43,617.56
$46,816.47
$48,147.85
$40,662.84
$47,069.19
$39,871.84
$41,976.92
$49,093.20
$44,185.19
$35,660.16
$26,443.91
$3,532.68
$297.45
$600.39
$859.59
$620.82
$444.78
$801.45
$450.00
$319.86
$507.96
$226.53
$529.65
$100.89
$18.13
$352.44
$617.40
$1,629.00
Total Sales
Tax
Client
Gross Cost Amount Due
Ingredient
Cost
Difference
Amount
Patient Paid
Amount
$1,309.30 $158,936.09 $143,119.84
$1,281.34 $109,949.08
$97,286.33
$683.87
$59,120.72
$50,576.03
($12,253.60)
($8,886.88)
($6,736.09)
$15,816.25
$12,662.75
$8,544.69
$440.78
$355.00
$764.21
$894.68
$901.81
$761.08
$661.23
$696.76
$529.68
$1,153.78
$317.53
$318.91
$211.40
$0.00
$571.92
$581.73
$584.19
($31,481.78)
($5,490.37)
($7,419.35)
($11,184.93)
($5,469.50)
($9,254.41)
($5,515.16)
($4,905.22)
($8,342.19)
($6,489.89)
($3,946.10)
$27,774.63
($7,244.84)
$0.00
($3,217.64)
($6,700.46)
($20,426.42)
$17,994.94
$7,148.50
$8,727.71
$17,721.62
$8,128.79
$9,767.30
$9,764.29
$6,839.30
$7,372.67
$7,117.48
$3,785.30
$4,797.28
$8,141.75
$3,270.80
$5,126.26
$7,729.62
$8,813.50
$36,929.42
$61,100.23
$57,775.38
$58,689.31
$57,850.63
$56,691.16
$45,080.24
$47,963.23
$48,997.39
$42,324.58
$47,613.25
$40,720.40
$42,289.21
$49,111.33
$45,109.55
$36,859.29
$28,657.10
$18,934.48
$53,951.73
$49,047.67
$40,967.69
$49,721.84
$46,923.86
$35,315.95
$41,123.93
$41,624.72
$35,207.10
$43,827.95
$35,923.12
$34,147.46
$45,840.53
$39,983.29
$29,129.67
$19,843.60
Rebecca Busch, RN, MBA, CCM, CFE, FHFMA
MBA Inc. Copyright 2008
Movement of $, PHI, RX
Plan Sponsor Operational Pipeline Chart
Contract
with TPA
(HIP) Collect all signed contracts & identify all parties involved. Look for non contracted
parties. (ARP) Identify all $ schedules within each contract. (OFA) How can the information
be corroborated?
Implement contracted Terms: Set up
controls for monitoring terms.
Plan document verification/audit/monitoring
(HIP) Review Right to Audit Provisions
(ARP) What $ transaction cannot be audited or
corroborated? (OFA) How can the information
be corroborated?
•Audits/investigations
•Eligibility of claimant
•Eligibility of charges
Vendor audits
PBM
•Calculate benefit
•Apply appropriate
deductions, co-insurance
•Verify maximum limits
•Process check or denial
•Verify TPA Fees
•Conduct QA Audits
•Verify Internal controls
•Verify Employee Internal
controls
EOB (Explanation of Benefits)
Disbursement/Payment
(HIP) Collect reports that
demonstrate adjudication according
to the plan document. (ARP)
Identify claims not paid according to
plan. (OFA) What internal controls
are in place?
(Payer Fund)
(Employer Fund)
TPA Processing/Follow Ups
Employer Processing/Follow Ups
TPA Reports
(HIP) Collect information on management reports for adjudication activity (ARP)
reconcile bank statements with fees. (OFA) What internal controls are in place?
Rebecca Busch, RN, MBA, CCM, CFE, FHFMA
MBA Inc. Copyright 2008
Movement of $, PHI, RX
Product, Service, Consumer Market Pipeline Chart
Manufacturer Drug Distribution
Service or Product ordered by an MD, DC, DO or facility
based provider for a patient
Pre-Admission/Admission/Office Appointment
(identify parties involved in reimbursement of item or service
ordered)
PBM
Product or Service utilized by the patient
Patient discontinues use of product or service
HIP: Identify Patient
Profiles ARP: Review
Facility Cost Reports
OFA: Business flow &
use of Drugs PMA:
Cancer Drug SMA:
Review clinical staff
CMA: Why did the
patient choose that
provider?
Ordering professional documents effects of products or services & process bill
or professional component. Supplier submits a bill for product or service
Collect both operational
and patient records at
each operational
function
Bills printed
Bill submitted to TPA/Payer for processing
Payment Received
Account follow-up/Collection
Rebecca Busch, RN, MBA, CCM, CFE, FHFMA
MBA Inc. Copyright 2008
All Drugs, Services, Treatment plans at
some point require a “patient”
Rebecca Busch, RN, MBA, CCM, CFE, FHFMA
MBA Inc. Copyright 2008
A patient on Drugs, Receiving Services,
or Supplies require a “clinical” record
Rebecca Busch, RN, MBA, CCM, CFE, FHFMA
MBA Inc. Copyright 2008
SOAP TEST
SOAP charting as an audit tool
“S” Subjective Patient Statement
“O” Objective Data
“A” Assessment
“P” Plan
Rebecca Busch, RN, MBA, CCM, CFE, FHFMA
MBA Inc. Copyright 2008
The 5 W’s & an H
“Who”
“What”
“When”
“Why”
“Where”
and
“How”
Rebecca Busch, RN, MBA, CCM, CFE, FHFMA
MBA Inc. Copyright 2008
Case History
“Who” Staff Nurse on pm shift
“What” High rate of overcharges on
patient bills
“When” credits noted on pm and night
shift
“Why” ?
“Where” Unit 10 South
Rebecca Busch, RN, MBA, CCM, CFE, FHFMA
MBA Inc. Copyright 2008
Data Sets
Jane Doe 1/16/04 9pm
“S” C/O Pain 8/10
“O” Percocet given 2 tabs 10pm
“A” Pain secondary to surgery
“P” Give meds as ordered
Signed Pain Reliever, RN
Rebecca Busch, RN, MBA, CCM, CFE, FHFMA
MBA Inc. Copyright 2008
Data Sets
Jane Doe 1/17/04 9pm
“S” c/o pain 5/10
“O” Percocet given 2 tabs at 2pm
pain 8/10 medicated with relief
“A” Pain secondary to surgery
“P” Gave dose at 9pm
Signed Pain Reliever, RN
Rebecca Busch, RN, MBA, CCM, CFE, FHFMA
MBA Inc. Copyright 2008
Jane Doe: 1/18/04 8pm
Data Sets – OPS
Clinic profile of 4
patients
“S” C/O Pain 8/10
“O” Percocet given 2 tabs 10pm VSS
b/p 134/72 HR 86 RR 22
“A” Pain secondary to surgery
“P” Give meds as ordered
Signed Pain Reliever, RN
Janis Doe 1/18/04 9pm
“S” C/O Pain 8/10
“O” Percocet given 2 tabs 10pm
VSS b/p 134/72 HR 86 RR
22
“A” Pain secondary to surgery
“P” Give meds as ordered
Signed Pain Reliever, RN
John Doe 1/18/04 10pm
Jake Doe 1/18/04 11pm
“S” C/O Pain 8/10
“O” Percocet given 2 tabs 10pm
VSS b/p 134/72 HR 86 RR
22
“A” Pain secondary to surgery
“P” Give meds as ordered
Signed Pain Reliever, RN
“S” C/O Pain 8/10
“O” Percocet given 2 tabs 10pm
VSS b/p 134/72 HR 86 RR
22
“A” Pain secondary to surgery
“P” Give meds as ordered
Signed Pain Reliever, RN
Rebecca Busch, RN, MBA, CCM, CFE, FHFMA
MBA Inc. Copyright 2008
Data Sets – OPS
Clinic profile of 4
patients
S
SOAP ANALYSIS
O
A
P
Time Patient Staff
QA SC PS
A
1/16/2004
1/17/2004
1/18/2004
1/18/2004
1/18/2004
1/18/2004
TOTAL
QA- Quality of Care
SC- Substandard of Care
PS - Patient Safety
A - Anomaly
Rebecca Busch, RN, MBA, CCM, CFE, FHFMA
MBA Inc. Copyright 2008
Data Sets – OPS
Clinic profile of 4
patients
1/16/2004
1/17/2004
1/18/2004
1/18/2004
1/18/2004
1/18/2004
TOTAL
%
SOAP ANALYSIS
S
O
A
P
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
6
6
6
6
100% 100% 100% 100%
Time Patient Staff
9pm JANE
PR
9pm JANE
OC
8pm JANE
PR
9pm JANIS
PR
10pm JOHN
PR
11pm JAKE
PR
QA SC PS
X X X
X
X
X
X
X
X
X
X
X
X
X
X
A
X
X
X
X
QA- Quality of Care
SC- Substandard of Care
PS - Patient Safety
A - Anomaly
Rebecca Busch, RN, MBA, CCM, CFE, FHFMA
MBA Inc. Copyright 2008
What Else?
Sample Counterfeit Medications
Rebecca Busch, RN, MBA, CCM, CFE, FHFMA
MBA Inc. Copyright 2008
Drugs – Packaging Clue
Rebecca Busch, RN, MBA, CCM, CFE, FHFMA
MBA Inc. Copyright 2008
Drugs – Counterfeit Labels
Rebecca Busch, RN, MBA, CCM, CFE, FHFMA
MBA Inc. Copyright 2008
Drugs – Internet Purchase
Rebecca Busch, RN, MBA, CCM, CFE, FHFMA
MBA Inc. Copyright 2008
Sample: Ponstan
Although similar in
appearance to the
authentic tablets, the
counterfeit Ponstan tablet
on the left contains no
active ingredient.
Instead, it is composed of boric acid, brick dust
and paint. Boric Acid is a pesticide that can cause
gastrointestinal and renal failure.
Rebecca Busch, RN, MBA, CCM, CFE, FHFMA
MBA Inc. Copyright 2008
The counterfeit Lipitor
tablets on the left are
nearly identical from the
authentic tablets on the
right. Only
distinguishable to the
consumer by their bitter
taste, the counterfeit
tablets were among more
than 18 million counterfeit
Lipitor tablets removed
from the U.S. supply
chain in 2003.
Columbian authorities raided this manufacturing site where
they found more than 800,000 counterfeit Ponstan tablets, as
well as large quantities of Terramycin, packaging for both
products, and manufacturing equipment.
Rebecca Busch, RN, MBA, CCM, CFE, FHFMA
MBA Inc. Copyright 2008
Sample: Viagra
This is a Viagra counterfeiting site in Egypt. Counterfeit tablets
were being given their blue coloring using an old cement mixer.
Clearly, the manufacturing conditions were far from sterile.
Rebecca Busch, RN, MBA, CCM, CFE, FHFMA
MBA Inc. Copyright 2008
This an old
cement mixer
used to give
counterfeit
Viagra tablets
their blue
coloring.
Rebecca Busch, RN, MBA, CCM, CFE, FHFMA
MBA Inc. Copyright 2008
Data Intelligence Models
Macro & Micro Perspective of MBA’s Anomaly Tracking Model
Anomaly
New & Old
Tables
Market
Response:
Industry
Standards
Compliance
Legislation
$ ARP
Issues
CMA Activity
Data
Theory
HIP Data: Indirect
& Direct Patient
(CPT & ICD)
Anomaly
impacting
recovery
(output)
Query
OFA Controls
PMA
Detection
Investigation
Mitigation
Prevention
Response
Recovery
New & Old
Patterns
Vendor
Relationships
SMA
EDA Activity: tips, data variances, predication, evidence,
settlement, damage control, Internal Controls, Audits,
market demands, retribution, compensation, contribution
Litigation
Criminal, Civil,
CIA ’s,
Settlements
(output)
Anomaly Continuum
Anomaly, Detect, Investigate, Mitigate, Prevent, Respond, Recover
Rebecca Busch, RN, MBA, CCM, CFE, FHFMA
MBA Inc. Copyright 2008
Diversion and Fraud Related to Prescription Abuse: Case Studies
Rebecca S Busch, RN, MBA, CCM, CFE, FHFMA
Contact information: info@mbanews.com
Medical Business Associates, Inc
580 Oakmont Lane, Westmont IL 60559
www.mbanews.com
In 1991, Rebecca founded Medical Business Associates with the vision of delivering a multi-disciplined approach to
conducting comprehensive audits for patients, employers, providers, healthcare vendors and insurance companies. Her
proprietary methodology employs statistical analysis of claims and procedural data specifically targeted to identify the most
probable areas of operational breakdowns, exposure to fraud, financial errors, medical errors, and cost savings. Ms. Busch’s
ability to quickly identify anomalies from vast amounts of data has distinguished her and Medical Business Associates as an
invaluable source enabling dramatic cost-savings for clients. In addition, Ms. Busch testifies as an expert in the area of
health care reimbursement, internal controls, life care expense analysis, patient care documentation and respective damages
– and she has authored “Healthcare Fraud: Audit and Detection Guide” (Wiley Publications 2007) and “Electronic
Health Records: An Internal Audit Guide” (Wiley Publications 2008); and a “how to” book that will teach American families
how to prevent medical errors and detect fraud in reviewing their own families’ medical records through MBA’s electronic
personal health record, PortFoliasm. Selective case study contributions may also be found in “Computer Case Fraud Book
Bytes that Bite” edited Joseph T. Wells (editor) “I Do” Case study on Identity Theft by Rebecca Busch (contributing author)
John Wiley & Sons, Inc. (2008) and “Fraud Casebook: Lessons from the Bad Side of Business” Joseph T. Wells (editor),
Chapter 59 “Bodies for Rent” by Rebecca Busch, Wiley & Sons Publications, July 2007. Additionally she is a faculty
member of the Association of Certified Fraud Examiners and makes frequent public speaker appearances .
Rebecca Busch, RN, MBA, CCM, CFE, FHFMA
MBA Inc. Copyright 2008