Testimony Before the United States Senate Special Committee on Aging  
 
 
 
   
Opioid Use Among Seniors   
Issues and Emerging Trends  
 
 
  Testimony of:   
 
  Ann Maxwell     
  Assistant Inspector General    
Office of Evaluation and Inspections 
Office of Inspector General  
Department of Health and Human Services 
 
 
 
 
February 24, 2016 
2:30 p.m. 
Dirksen Senate Office Building, Room 562 
   
 
 
Testimony of: 
Ann Maxwell 
Assistant Inspector General for Evaluation and Inspections 
   Office of Inspector General, U.S. Department of Health and Human Services 
 
Good morning, Chairman Collins, Ranking Member McCaskill, and other Members of the 
Committee.  I am Ann Maxwell, Assistant Inspector General for Evaluation and Inspections 
of the Office of Inspector General (OIG), U.S. Department of Health and Human Services 
(HHS).  Thank you for the opportunity to testify about our work on opioid use and the 
Medicare Part D program, the prescription drug benefit for Medicare beneficiaries.  My 
testimony will draw heavily from OIGs data brief, Questionable Billing and Geographic 
Hotspots Point to Potential Fraud and Abuse in Medicare Part D (OEI-02-15-00190) and 
our Portfolio report, Ensuring the Integrity of Medicare Part D (OEI-03-15-00180), both 
issued in June 2015.  With your permission, Chairman Collins, I would like to submit both 
of those reports for the record.   
 
Prescription drug abuse is a growing problem in this country from which seniors are not 
immune.  The Centers for Disease Control and Prevention (CDC) has declared prescription 
drug abuse an epidemic.1  More people in the United States died from drug overdoses in 
2014 than during any previous year on record.  Opioids are the main drugs associated with 
overdose deaths.2  Drug diversionthe redirection of prescription drugs for an illegal 
purposeis also a serious problem.  Examples of drug diversion include the illegal resale of 
opioids. 
 
My testimony will describe the substantial growth in spending for Part D drugs, particularly 
commonly abused opioids.  I will also describe questionable billing patterns and related 
investigations associated with these drugs and highlight key improvements needed to address 
opioid overutilization and drug diversion. OIG has pursued a multifaceted approach to 
address these problems.  In addition to conducting investigations, OIG has used sophisticated 
claims analysis to reveal trends in the use of opioids and identify questionable billing 
associated with pharmacies, prescribers, and beneficiaries for these drugs.3   
   
 
Hearing Before the Senate Special Committee on Aging 
February 24, 2016  1   
 
OPIOID OVERUTILIZATION IS A CONCERN FOR THE MEDICARE PART D 
PROGRAM  
Spending for Part D drugs more than doubled from 2006 to 2014.  
 
Spending for Part D drugs is the amount that the Government, beneficiaries, and plan 
sponsors paid to pharmacies for drugs.  From 2006 to 2014, spending for Part D drugs 
increased by 136 percent, from $51.3 billion to $121.1 billion.4  (See Figure 1.) 
 
 
Figure 1:  Spending for Part D Drugs, 20062014 
$121
$104
$100
$90
s  $85
n $78
o
Billi $68 $74
n  $62
g i
n $51
di $50
n
e
p
S
$0
2006 2007 2008 2009 2010 2011 2012 2013 2014
 
Source:  OIG analysis of Medicare Part D data, 2015. 
 
In 2014, $7.8 billionor 6 percent of all Part D spendingwas for controlled substances.  
Controlled substances of particular concern are Schedule II and III opioids, hereafter referred 
to as commonly abused opioids.5  They are narcotics intended to manage pain from 
surgery, injury, and illness.  They can create a euphoric effect, which makes them very 
vulnerable to abuse.  In 2014, Part D spending for these opioids was highest for OxyContin 
(the brand-name version of oxycodone), hydrocodone-acetaminophen, fentanyl, and 
morphine sulfate.   
 
Spending for commonly abused opioids grew at a faster rate than spending for all drugs. 
 
Between 2006 and 2014, spending for commonly abused opioids grew from $1.5 billion to 
 
Hearing Before the Senate Special Committee on Aging 
February 24, 2016  2   
 
$3.9 billion, an increase of 156 percent.  (See Figure 2.)  Growth in spending for these 
opioids outpaced both the growth in spending for all Part D drugs (which grew 136 percent) 
and the growth in the number of beneficiaries receiving Part D drugs (which grew 68 
percent).   
 
Figure 2:  Growth in Spending of Commonly Abused Opioids, 20062014 
156%
e 150%
g
n
a 136%
h 125%
C
e 
g
a 100%
nt
e
c 75%
er 68%
P
e  50%
v
ati
ul 25%
m
u
C 0%
2006 2007 2008 2009 2010 2011 2012 2013 2014
Spending for Commonly Abused Opioids Spending for All Drugs Number of Beneficiaries
 
Source:  OIG analysis of Medicare Part D data, 2015. 
 
The increase in spending for commonly abused opioids appears to have been driven by an 
increase both in the number of beneficiaries receiving these opioids and in the average 
number of prescriptions per beneficiary.  Both of these numbers have increased faster for 
commonly abused opioids than for all drugs.  The total number of beneficiaries receiving 
these opioids grew by 92 percent, compared to 68 percent for all drugs, while the average 
number of prescriptions for commonly abused opioids per beneficiary grew by 20 percent, 
compared to 3 percent for all drugs.  
 
Part D spending averaged $105 per beneficiary for commonly abused opioids in 2014.  
Additionally, 32 percent of beneficiaries received at least one prescription for a commonly 
abused opioid in 2014. 
 
Many pharmacies had questionable billing for commonly abused opioids. 
 
As spending for commonly abused opioids increases, so do concerns about program 
integrity, fraud, and abuse.  One way to identify pharmacies that may be involved in schemes 
is to evaluate their billing patterns using measures that may indicate potentially fraudulent 
activity.  One such measure is the percentage of a pharmacys prescriptions that are for 
commonly abused opioids.  Billing for commonly abused opioids in a high percentage of 
prescriptions may indicate that a pharmacy is billing for medically unnecessary drugs that 
 
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February 24, 2016  3   
 
may be used inappropriately or diverted and resold for a profit.   
 
A total of 468 pharmacies billed for commonly abused opioids in an extremely high 
percentage of their prescriptions in 2014.  Nationwide, commonly abused opioids accounted 
for 6 percent of each pharmacys prescriptions, on average.  However, each of these 
468 pharmacies billed for commonly abused opioids in at least 17 percent of its Part D 
prescriptionsnearly three times the national average.  Thirty of these pharmacies billed for 
commonly abused opioids in over half of their prescriptions.  For example, one Detroit-area 
pharmacy billed for commonly abused opioids for 93 percent of its beneficiaries, which 
amounted to 58 percent of all its Part D prescriptions.   
 
Another pharmacy measure that could indicate potentially fraudulent activity involves 
beneficiaries who had an unusually high number of prescribers for commonly abused 
opioids.  In 2014, a total of 216 pharmacies billed for beneficiaries who, on average, had at 
least 4 prescribers for commonly abused opioids.  In comparison, the national average was 
two prescribers per beneficiary for these drugs.   
 
When beneficiaries have a high number of prescribers for commonly abused opioids it may 
indicate that they are doctor shopping, which is when a beneficiary consults a number of 
doctors for the purpose of inappropriately obtaining prescriptions.  
 
Many general-care physicians had questionable prescribing patterns for controlled 
substances.   
In addition to identifying questionable billing by pharmacies, OIG has developed measures 
and assessed questionable prescribing patterns by physicians.  In 2009, a total of 483 
general-care physicians ordered an extremely high percentage of Schedule II or III drugs, 
which have a high risk for abuse and include commonly abused opioids.6  Specifically, 343 
general-care physicians ordered a high percentage of Schedule II drugs; at least 14 percent of 
the prescriptions ordered by each of these physicians were for Schedule II drugs.  This was 
seven times the national average for general-care physicians.  The most common Schedule II 
drugs ordered by these physicians were oxycodone HCl, morphine sulfate, and methadone 
HCl.   
Although some of this prescribing may be appropriate, prescribing a high percentage of these 
drugs may indicate that a physician is ordering medically unnecessary drugs, which may be 
used inappropriately or diverted and resold.  Misuse of these drugs has serious human and 
financial costs. 
In one example, about 80 percent of the prescriptions ordered by one Ohio physician were 
for Schedule II drugs.  Also troubling is that this physician had 106 Part D beneficiaries, 98 
of whom received oxycodone HCl.  In another example, a California physician ordered 115 
 
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Schedule II drugs for 1 beneficiary in 2009.  Medicare paid $425,711 for these drugs, which 
were dispensed by 11 pharmacies.   
OIG has increased Part D investigations of fraud, including diversion of opioids  
The growing use of opioids among Part D beneficiaries and prevalence of questionable 
billing and questionable prescribing for these drugs raise concern.  These trends may indicate 
that beneficiaries are receiving unnecessary opioids.  They may also indicate that the Part D 
program is paying for prescription drugs that are diverted and resold for illegal purposes.  As 
a result, OIG has stepped up the number of investigations in this crucial area. 
OIG has seen a 134-percent increase in cases and complaints involving Part D in the last 5 
years.  OIG has identified several Part D fraud trends, including billing for non-rendered 
services and prescription drug diversion.  For example, a pharmacy would bill for but not 
dispense a prescription drug.  Prescription drug diversion is the redirection of prescription 
drugs for illegitimate purposes.  It often involves overprescribing of controlled drugs, such 
as opioids, but can also include billing for unnecessary non-controlled prescriptions that can 
be combined with controlled substances to enhance the euphoric effect and chance of 
overdose.  Fraud associated with non-controlled substances typically involves brand-name, 
high-cost medications, including respiratory, HIV, and antipsychotic medications.   
OIGs investigations have also identified an increase in organized criminal networks 
committing health care fraud.  The influx of criminal networks has become a pervasive 
problem in fraud schemes involving pharmacies and prescription drugs.  These schemes 
typically involve kickbacks, nominee owners, recruiters, and money laundering.  Cases often 
involve multiple co-conspirators ranging from informal networks of street traffickers to 
complex criminal enterprises comprised of health care professionals, pharmacies, and even 
patients. 
As a result of one OIG investigation, a physician was convicted of prescribing oxycodone-
based products to complicit patients.  The complicit patients received unnecessary 
prescriptions, filled them at various pharmacies, and sold the pills to six different drug-
trafficking organizations, which resold the drugs on the street.  This scheme resulted in the 
illegal distribution of more than 700,000 opioid pills and 1 patient death.  A total of 64 
defendants connected to this scheme have been sentenced to a combined 254 years in 
prison.  The physician was sentenced to 25 years in prison and was ordered to forfeit $10 
million. 
During fiscal years 20122015, OIGs Part D investigations resulted in 482 criminal actions, 
47 civil actions, and over $784 million in investigative receivables.   
 
 
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February 24, 2016  5   
 
CHANGES TO HELP ADDRESS OPIOID OVERUTILIZATION  
OIG has focused its efforts on identifying and preventing Part D fraud, including the 
illegal or unnecessary prescribing of opioids.  We have made a series of recommendations 
to the Centers for Medicare & Medicaid Services (CMS) to strengthen program integrity 
in Part D.  CMS has made a number of important changes based on these 
recommendations.  For example, CMS now identifies physicians that prescribe high levels 
of Schedule II drugs compared to their peers and identifies high risk pharmacies.  CMS 
provides this information to Part D plan sponsors for follow-up.  In addition, CMS 
leadership has prioritized working toward implementing several recommendations that 
remain outstanding.  These recommendations focus on leveraging Part D data to identify 
vulnerabilities and employing additional measures to enhance its monitoring of fraud, 
waste, and abuse.  
The following two recommendations particularly relevant to opioid use have yet to be 
implemented.   
Restrict certain beneficiaries to a limited number of pharmacies or prescribers.  
CMS should be granted the authority to restrict certain beneficiaries to a limited number of 
pharmacies or prescribers when warranted by excessive or questionable billing patterns.  
This practice is commonly referred to as lock-in and has been successfully used by State 
Medicaid programs. 
Restricting certain beneficiaries to a limited number of pharmacies or prescribers could 
both reduce inappropriate use of opioids among Medicare beneficiaries and reduce Part D 
fraud:  it would target beneficiaries being harmed by overprescribing and beneficiaries 
who are doctor shopping or intentionally seeking unnecessary prescriptions.    
Expand drug utilization review programs to include additional drugs susceptible to 
fraud, waste, and abuse.  
Drug utilization reviews are intended to protect beneficiaries and reduce fraud, waste, and 
abuse.  However, CMSs requirements for these reviews apply only to certain types of 
drugs.  We recommend that CMS and plan sponsors monitor beneficiary utilization for a 
wider range of drugs susceptible to abuse than they currently do.  In particular, we 
recommend expanding sponsors and CMSs drug utilization reviews to cover certain 
non-controlled substances, such as HIV and antipsychotic medications.  It is important to 
expand these reviews because fraud related to non-controlled substances can contribute to 
opioid-related fraud.  For example, some of these drugs can enhance the effects of the 
opioids, when taken with them.  
 
Hearing Before the Senate Special Committee on Aging 
February 24, 2016  6   
 
CONCLUSION 
Recent trends in opioid use among Medicare Part D beneficiaries are concerning.  Spending 
for commonly abused opioids grew at a faster rate than spending for all drugs and reached 
$3.9 billion in 2014.  The number of beneficiaries receiving these opioids and the average 
number of prescriptions per beneficiary also increased.  This growthin addition to the 
CDCs declaring prescription drug abuse an epidemic demonstrates that this issue 
warrants continued action.   
To date, OIG has focused its efforts on identifying and preventing Part D fraud, including 
the illegal or unnecessary prescribing of opioids.  We have identified both pharmacies and 
prescribers with questionable billing patterns.  We have also had numerous cases that have 
found that the Part D program is paying for opioids that are illegally diverted for resale and 
recreational use. 
CMS has made a number of important changes based on the recommendations from our 
work.  However, more needs to be done.  Notably, creating a lock-in program in Part D 
would provide CMS with an additional tool to protect beneficiaries from over-utilizing 
opioids.  OIG continues to work with CMS and remains committed to combating the issue of 
opioid overutilization and to protecting beneficiaries and the integrity of the Part D program. 
Thank you again for inviting me to speak with the committee today to share the results of 
OIGs work related to opioid use in Part D.  We join you in your concern and applaud your 
leadership in continuing to focus attention on this issue.  I would be happy to answer any 
questions the committee may have. 
 
 
 
 
Hearing Before the Senate Special Committee on Aging 
February 24, 2016  7   
 
                                                           
 
ENDNOTES 
 
1 CDC, Prescription Painkiller Overdoses at Epidemic Levels, November 1, 2011.  Accessed at 
http://www.cdc.gov/media/releases/2011/p1101_flu_pain_killer_overdose.html on May 5, 2015. 
2 CDC, Increases in Drug and Opioid Deaths  United States, 2000-2014, January 1, 2016. Accessed at 
http://www.cdc.gov/mmwr/preview/mmwrhtml/mm6450a3.htm?s_cid=mm6450a3_w on February 19, 2016.    
3 OIG, Retail Pharmacies With Questionable Part D Billing, OEI-02-09-00600, May 2012; OIG, Prescribers 
With Questionable Part D Billing, OEI-02-09-00603, May 2012; and OIG, Part D Beneficiaries With 
Questionable Utilization Patterns for HIV Drugs, OEI-11-00170, August 2014.   
4 This represents the negotiated price paid to the pharmacy.  It is not adjusted for any rebates, coverage gap 
discounts, or other Direct and Indirect Remuneration paid to the sponsors.   
5 We refer to Schedule II and III opioids as commonly abused opioids.  According to the National Institute on 
Drug Abusepart of the National Institutes of Healthprescription opioids are among the most commonly 
abused drugs.  See National Institute on Drug Abuse, Commonly Abused Drugs Charts, January 
2016.  Accessed at https://www.drugabuse.gov/drugs-abuse/commonly-abused-drugs-charts on February 19, 
2016.  
6 OIG, Prescribers With Questionable Part D Billing, OEI-02-09-00603, May 2012. 
 
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