Prescription drug fraud is a costly problem for health insurance providers, but identifying perpetrators can be difficult. The retail value of prescription drugs filled annually in the United States exceeds $300 billion with approximately $3 billion of those costs resulting from fraud, waste, and abuse. 

It can be challenging for insurance providers, Pharmacy Benefit Managers, Managed Care Organizations, and regional pharmacies to understand and stay ahead of ever-evolving fraud risks and proactively identify and investigate active threats. The many different actors and schemes involved, varying state regulations and oversight, and compliance with privacy laws all contribute to the challenge of detecting and preventing prescription drug fraud.

Comprehensive healthcare fraud Solution

Elder Research has extensive experience using advanced analytics to uncover fraud schemes and actors with a fraud framework focused on detecting the many types of fraud schemes and bad actors.

Who Commits Pharmacy Fraud?

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  • Physicians
  • Patient Recruiters
  • Patients
  • Home Health Care Providers
  • Pharmacy Owners
  • Pharmacists
  • Pharmacy Benefit Managers
  • Drug Companies
  • Mail Order Facilities
  • Medicare Beneficiaries
  • Prescribers

Types of Pharmacy FRAUD, WASTE, AND ABUSE

There are many schemes used to commit pharmacy fraud. Some common examples include: 

Prescription Drug Switching - Substituting a more expensive drug for a cheaper one or billing for brand name drugs when generic drugs are dispensed. 

Phantom Prescriptions - Billing for a forged or nonexistent prescription.

Duplicate Billing - Billing multiple payors for the same prescription.

Prescription Shorting - Filling less than the prescribed quantity of a drug.

Drug Diversion - Diverting a prescription drug for sale or use in some illegal activity. Often the patient is paid for the prescription and the drugs are recycled by the pharmacy or sold on the black market.

Auto-refilling - Automatically refilling a prescription when a patient did not request a refill. Without the patient's knowledge, the pharmacy will then bill Medicare for prescriptions that patients never picked up.

Pricing Fraud - Charging patients full cost rather than the lower negotiated price or retaining manufacturer rebates rather than passing them on to the patient. Another example is drug companies inflating the Average Wholesale Price which is used by Medicare to determine the reimbursement for each drug.

Kickbacks and Bribes - Drug manufacturers paying health care professionals to prescribe or purchase profitable drugs manufactured by that company.

Reduce Pharmacy Fraud False Positives and Cost

Elder Research combines big data sources, advanced predictive modeling techniques, and intuitive visualization to prioritize investigative caseload, improve efficiency of investigative resources, and maximize fraud recoveries. Elder Research uses anomaly and pattern detection to score and rank bad actors by examining key fraud indicators such as:

  • Claim volume
  • Claim cost
  • Early refill of prescriptions
  • NDC prevelance
  • Claim reversals
  • Pricing discovery

The graphical user interface integrates claims data with external sources such as CMS and maps data and provides investigators with detailed information on:

  • Prescribers
  • Pharmacies
  • National Drug Codes
  • Transactions
  • Costs