The Medicare Part D program, administered by CMS, provides a voluntary, outpatient prescription drug benefit for eligible individuals 65 years and older and eligible individuals with disabilities. Beneficiaries may pay for part of the drug benefit through monthly premiums, deductibles, and co-pays. Low-income beneficiaries can receive substantial premium and cost sharing assistance. CMS data indicate that about 19 percent of the individuals who received Medicare Part D benefits in 2008 were eligible because of their disabilities. CMS contracts with private companies—such as health insurance companies and companies that manage pharmacy benefits—to provide Part D prescription drug benefit plans for Medicare beneficiaries. These companies are referred to as Part D plan sponsors. The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA), which established the Part D program, requires all Part D plan sponsors to have programs to safeguard Part D from fraud, waste, and abuse. CMS regulations establish the requirements for comprehensive compliance plans for Part D plan sponsors. To guide Medicare Part D plan sponsors in designing a fraud and abuse program that addressed Medicare Part D risks, in April 2006 CMS issued recommendations for Medicare Part D plan sponsors’ fraud and abuse programs based on input from various sources, including law enforcement and industry representatives. The guidance, issued as chapter 9 in the Prescription Drug Benefit Manual, contains further interpretation and guidelines on the steps sponsors should take to detect, correct, and prevent fraud, waste, and abuse in Part D. In the chapter 9 guidance, CMS identifies examples of potential fraud, waste, and abuse by Medicare beneficiaries, such as beneficiaries engaging in doctor shopping, where a patient seeks prescriptions from multiple physicians with the intent to abuse or sell drugs, and directs the Part D plan sponsors to report potential cases to the Medicare Drug Integrity Contactor (MEDIC). The MEDIC contracts with CMS to support audit, oversight, and antifraud and abuse efforts in Part D. The Controlled Substances Act of 1970 (CSA) established a classification structure for certain drugs and chemicals used in drug manufacturing. Controlled substances are classified into five schedules on the basis of their currently accepted medical use and potential for abuse and dependence. Schedule I drugs—including heroin, marijuana, and hallucinogens such as LSD—have a high potential for abuse, no currently accepted medical use in treatment in the United States, and a lack of accepted safety for use under medical supervision. Schedule II drugs—including methylphenidate (Ritalin) and opiates such as hydrocodone, morphine, and oxycodone—have a high potential for abuse and may lead to severe physical or psychological dependence but have a currently accepted medical use. Drugs on Schedules III through V have medical uses and successively lower potentials for abuse and dependence. Schedule III drugs include anabolic steroids, some preparations of codeine, hydrocodone in combination with aspirin or acetaminophen, and some barbiturates. Schedule IV contains such drugs as the antianxiety medications diazepam (Valium) and alprazolam (Xanax). Schedule V includes preparations such as cough syrups with codeine. All drugs but those in Schedule I are legally available to the public with a prescription. CSA mandates that DEA establish a closed system of control for manufacturing, distribution, and dispensing of controlled substances. Specifically, any person who manufactures, dispenses, imports, exports, or conducts research with controlled substances must register with DEA (unless exempt), keep track of all stocks of controlled substances, and maintain records to account for all controlled substances received, distributed, or otherwise disposed of. Although all registrants, including pharmacies, are required to maintain records of controlled substance transactions, only manufacturers, distributors, and pharmacies authorized to dispense controlled substances by means of the Internet are required to report certain controlled substance transactions, including sales to the retail level, to DEA. The data provided to DEA are available for use in investigations of illegal diversions at the manufacturer and distributor levels. The act does not require pharmacies to report information on dispensing to the patient level to DEA. Most states have implemented prescription drug monitoring programs (PDMP). These programs can help prevent and detect the diversion and abuse of pharmaceutical controlled substances, particularly at the retail level. States that have implemented PDMPs have the capability to collect and analyze data on filled and paid prescriptions, including those from the Medicare Part D program, more efficiently than those without such programs, where the collection of prescription information can require a time-consuming manual review of pharmacy files. If used properly, PDMPs can detect diversion of the drugs by health care prescribers, pharmacies, and patients. We have reported that states with PDMPs have realized benefits in their efforts to reduce drug diversion. Figure 1 shows that a total of 34 states had operational PDMPs as of February 2011. These states vary in the extent to which schedules of controlled substances are monitored. Some states also monitor certain noncontrolled substances. According to the Department of Justice (DOJ), in states that have implemented PDMPs, doctor shopping has decreased. However, since determined doctor shoppers can travel to nearby states to bypass a PDMP, DOJ has also reported an increased need for information sharing between neighboring states to facilitate the interstate exchange of PDMP data. Our analysis of Medicare Part D claims found that 170,000 Medicare beneficiaries received prescriptions from five or more medical practitioners for the 12 classes of frequently abused controlled substances and 2 classes of frequently abused noncontrolled substances in calendar year 2008. This represented about 1.8 percent of the Medicare Part D beneficiaries who received prescriptions for these 14 classes of drugs during the same calendar year. These individuals incurred approximately $148 million in prescription drug costs for these drugs, much of which is paid by the Medicare program. Our analysis also found the following:  Most of these 170,000 Medicare beneficiaries who were prescribed prescriptions from five or more practitioners were eligible for Medicare Part D benefits based on a disability. Specifically, approximately 120,000 Medicare beneficiaries (about 71 percent) were eligible for Medicare Part D benefits based on a disability.  Of these 170,000 beneficiaries, approximately 122,000 beneficiaries (72 percent) received a Medicare Low-Income Cost-Sharing (LICS) subsidy.  Of the 14 classes of frequently abused drugs analyzed, hydrocodone and oxycodone were the most prevalent. These drugs represented over 80 percent of the instances of potential doctor shopping we identified. In some cases, beneficiaries may have a justifiable reason for receiving prescriptions from multiple medical practitioners, such as visiting specialists or several prescribers in the same medical group. However, our analysis of Medicare Part D claims found that about 600 Medicare beneficiaries received prescriptions from 21 to 87 medical practitioners in the same year. In these situations, there is heightened concern that these Medicare beneficiaries may be seeking several medical practitioners to support and disguise an addiction. According to DEA, drug abusers use diversion techniques such as doctor shopping to acquire controlled prescription drugs. Further, DEA has also stated that diverted controlled prescription drugs have been added to the supplies of some illicit drug distributors. For example, according to DOJ, in 2008 hydrocodone tablets and oxycodone tablets were illicitly sold in California, one of the five states we selected for more detailed case investigations, for $5 and $80 per tablet, respectively. Our analysis of Medicare Part D claims did not focus on all prescription drugs, but instead targeted 12 classes of frequently abused controlled substances and 2 classes of frequently abused noncontrolled substances, as shown in table 1. Our analysis does have certain limitations based on the data. Specifically, the data submitted to CMS did not identify the prescriber for many Part D claims because of blank or invalid prescriber identification values. At least 5.8 percent of the prescription claims for these 14 categories of drugs contained blank or invalid prescriber identification values. These claims were not included in our analysis. Therefore, we potentially understated the total number of unique prescribers for each beneficiary who received a prescription for all the claims paid. Table 2 shows the breakout by drug class for the approximately 170,000 Medicare Part D beneficiaries who were prescribed the same class of drug by five or more medical practitioners. Because Medicare Part D beneficiaries may be receiving multiple classes of prescription drugs from five or more medical practitioners, certain beneficiaries may be counted in more than one prescription drug class. As shown in table 2, hydrocodone and oxycodone were the two prescription drug classes that were most prescribed by multiple medical practitioners. Specifically, about 97,000 beneficiaries were prescribed hydrocodone by five or more medical practitioners. In addition, our analysis found that about 57,000 Medicare Part D beneficiaries received oxycodone drugs prescribed by five or more practitioners. According to DOJ, doctor shopping is the primary method to obtain highly addictive prescription opioids (e.g., hydrocodone and oxycodone) for illegitimate use. We obtained additional information on 10 of the Medicare Part D beneficiaries that showed indications of doctor shopping. In each of the 10 cases, we found evidence that the beneficiary was acquiring highly abused drugs through doctor shopping. We also found that in each example physicians were not aware that their patients were receiving drugs prescribed by other prescribers. DEA’s definition of doctor shopping specifies an individual receiving more of a drug than intended by any single physician. In several examples physicians stated that they would not have prescribed the drugs if they were aware that the patient was receiving the same class of drugs from other sources. Table 3 summarizes the 10 examples of doctor shopping for prescription drugs, including controlled substances, in the Medicare Part D program. The total prescription cost of the drugs discussed in table 3 was about $86,000 of which $2,200 was paid directly by the beneficiaries in co- payments or deductibles. We are referring these beneficiaries to the Medicare Part D fraud contractor, as appropriate, for further investigation. CMS, through its Part D plan sponsors, does not limit access to hydrocodone, oxycodone, and other highly abused drugs for beneficiaries who are known doctor shoppers. Although systems are in place to identify individuals with doctor shopping behavior, according to CMS Part D program officials, federal law does not authorize Part D plans to restrict the access of these individuals. CMS requires Part D plans to perform retrospective drug utilization review (DUR) analysis to identify prior inappropriate or unnecessary medication use. By analyzing historical prescription claims data, the drug plans can identify individuals who are likely obtaining excessive amounts of highly abused drugs or potentially seeking such drugs from multiple medical practitioners. However, unless restrictions are placed on these individuals, the current system will not prevent these known abusers from continuing these practices. If a beneficiary is found to be inappropriately obtaining abused drugs, CMS guidance states that Part D plan sponsors would provide practitioner and beneficiary education as appropriate. For instance, if a potential doctor shopper is identified, intervention letters would be sent to all prescribers who ordered the drug type for that individual. An intervention might consist of an informational letter to the medical practitioner; a response form for the medical practitioner to complete, along with a preaddressed return envelope; and a patient drug profile. However, the effectiveness of such a notification may be limited because the physicians can overlook the intervention letters, or if a request for a prescription is denied by one physician, the beneficiary can go to another physician for the desired prescription. Although not currently used in the Medicare Part D program, officials from the Part D plan sponsors we interviewed stated that additional controls already in place in the Medicaid program and in some private sector plans could be used to better restrict the dispensing of abused drugs, such as hydrocodone and oxycodone, to individuals identified as doctor shoppers through detecting a pattern of abuse during retrospective analysis. Such programs employ a restricted recipient program, where prescription drug plans restrict beneficiaries who have been identified as drug abusers to one prescriber, one pharmacy, or both for receiving prescriptions. However, according to CMS policy officials, the restricted recipient program cannot be utilized in the Medicare Part D program because MMA did not authorize CMS to establish such restrictions on beneficiaries. As such, Part D plan sponsors are prevented from implementing these controls on specific individuals to prevent doctor shopping. There are issues to consider with a restricted recipient program, such as potentially denying legitimate drug needs and unknown costs for administration. These costs include developing and implementing criteria and procedures for placing individuals in the program, allowing them to change providers as appropriate, and ultimately releasing them from the program. Effective retrospective DURs require prescription drug plans to be able to share information about individuals identified as doctor shoppers with other Part D plans, as appropriate. Even if a restricted recipient program were implemented, according to CMS officials, Medicare Part D plan sponsors are not allowed to share beneficiary information with other plans. As a result, a Medicare Part D plan sponsor cannot forewarn another Medicare Part D plan sponsor when an identified doctor shopper has left its plan and enrolled in another. Because Medicare Part D beneficiaries can change prescription drug plans on at least a yearly basis, beneficiaries may be able to switch plans and continue their doctor shopping activity. Thus, to prevent known doctor shoppers from circumventing a restricted recipient program, a mechanism would also need to be established that allows CMS or its fraud contractor to inform the new plan of the doctor shopping activities of the beneficiary. Without such notification, beneficiaries will be able to bypass a restricted recipient program merely by switching prescription drug plans. Prescription drug abuse is a national problem and appears to exist in the Medicare Part D program. In addition to the costs to society of addiction, overdose, death, and related criminal activities, taxpayers and Medicare beneficiaries bear the additional costs for excessive prescriptions obtained to supply an addiction or for diversion to illicit drug distributors. Protecting patient health and combating the illegal diversion or abusive usage of prescription drugs, while ensuring that the pharmaceuticals remain available for those with legitimate medical needs, involves the efforts of both the prescription drug plans and the federal government. Although systems are in place to identify inappropriate drug use, measures to stop the activity are limited. The restricted recipient program is one tool that could be used to prevent doctor shopping in the Medicare Part D program. If such a tool were implemented for Medicare Part D, CMS would also need a mechanism to share information about restricted recipients between plans. This would allow a new plan to be informed about the beneficiary’s prescription use and to take appropriate action. In considering a restricted recipient program, CMS could utilize the experience of Medicaid and private sector programs to facilitate implementation issues and address the costs and benefits of such a program. CMS could also consider piloting a restricted recipient program focusing on hydrocodone and oxycodone, the two drug classes where we identified the largest potential doctor shopping activity. Increased controls over dispensing highly abusive drugs can help reduce the risk that individuals will use Medicare to facilitate their dangerous drug activities, which increases the cost of the program and jeopardizes patient care. As part of any evaluation, additional controls, such as the restricted recipient program, may require additional legal review and based on that review may require congressional authority to implement. To improve efforts to address doctor shopping by beneficiaries of highly abused prescription drugs, we recommend that the Administrator of CMS review our findings, evaluate the existing DUR program, and consider additional steps such as a restricted recipient program for Medicare Part D that would limit these beneficiaries to one prescriber, one pharmacy, or both for receiving prescriptions. CMS should consider the experiences from Medicaid and private sector use of such restricted recipient programs, including weighing the potential costs and benefits of instituting the control. CMS could consider piloting such a program with a focus on hydrocodone and oxycodone, the two drug classes where we identified the largest potential doctor shopping activity. Along with a restricted recipient program, CMS should also consider facilitating the sharing of information on identified doctor shoppers among the Part D drug plan sponsors so that those beneficiaries cannot circumvent the program by switching prescription drug plans. In considering such controls, CMS should seek congressional authority as appropriate. We provided a draft of this report to CMS and DOJ for comment. DOJ stated that it did not have comments on the report. CMS’s comments are reprinted in appendix I, and its technical comments were incorporated in the report as appropriate. CMS agreed with our overall recommendation to improve efforts to curb overutilization in Part D, but disagreed that a restricted recipient program is necessarily the appropriate control for the Part D program. CMS stated that GAO provided no evidence that a restricted recipient program would be more effective than existing DUR requirements. CMS also requested the data from the report to consider whether these data indicate a failure of Part D plan sponsors to effectively implement concurrent or point-of- sale DURs or whether there are additional approaches to supplement DURs while not jeopardizing patient access to care. It also stated that CMS officials are undertaking additional evaluation of MEDIC data on potential overutilization to identify potential solutions and that they will issue program guidance to Part D sponsors on any best practices and develop an internal monitoring strategy. We appreciate that CMS agrees with us that more efforts could be undertaken to curb overutilization in the Part D program, and we recognize its challenge in balancing the need to combat fraud, waste, and abuse with the program’s goal of providing beneficiaries sufficient access to medically necessary prescription drugs. To reflect the issues raised by CMS, we revised our recommendation to include other actions that may be taken by CMS to address overutilization of prescription drugs. CMS guidance states that Part D plans must perform retrospective DUR analysis to identify inappropriate prescriptions and provide education, such as alert letters, to the prescribers involved. However, our case study examples showed that the receipt of such letters by prior prescribers did not prevent inappropriate prescriptions from being obtained from other prescribers. We support CMS looking into both enhanced point-of-sale and retrospective controls and related actions to address overutilization and questionable access to specific drugs. CMS said that GAO provided no evidence that a restricted recipient program would be more effective than existing DUR requirements. However, our intent is not to prescribe a restricted recipient program as the only solution, but instead for CMS to consider utilizing it along with existing controls. The Part D plan sponsor officials we interviewed stated that a restricted recipient program, already in place in Medicaid and the private sector, could better restrict the dispensing of abused drugs. A restricted recipient program is an additional control that can be used for known abusers identified by retrospective DUR while not jeopardizing legitimate patient access to care. Thus, a restricted recipient program warrants further consideration by CMS. We used CMS’s own prescription drug paid claims data for our analysis. We are referring the examples in table 1 to the MEDIC as appropriate. We are also referring to the MEDIC the identities of other more egregious potential cases we identified through our analysis. According to CMS paid claims data, these individuals visited 40 or more prescribers in 2008 for a single class of drug and had overlapping prescriptions for the same drug class from different prescribers. As agreed with your offices, unless you publicly announce the contents of this report earlier, we plan no further distribution until 30 days from the report date. At that time, we will send copies to the Secretary of Health and Human Services, the Attorney General, and other interested parties. In addition, the report will be available at no charge on the GAO website at http://www.gao.gov. If you or your staff have questions about this report, please contact me at (202) 512-6722 or kutzg@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff members who made key contributions to this report are listed in appendix II. In addition to the contact named above, the following individuals made major contributions to this report: Erika Axelson, Assistant Director; Matthew Harris, Assistant Director; Matthew Valenta, Assistant Director; John Ahern; Gary Bianchi; Scott Clayton; Eric Eskew; Maria Kabiling; James Murphy; Jonathon Oldmixon; Philip Reiff; Barry Shillito; and April Van Cleef.

Summary: In 2009, GAO reported on doctor shopping in Medicaid, where individuals see several doctors and pharmacies, receiving more of a drug than was intended by any single physician. Questions have been raised about whether similar activity exists in Medicare Part D. GAO was asked to (1) determine the extent to which Medicare beneficiaries obtained frequently abused drugs from multiple prescribers, (2) identify examples of doctor shopping activity, and (3) determine the actions taken by the Centers for Medicare & Medicaid Services (CMS) to limit access to drugs for known abusers. To meet the objectives, GAO analyzed Medicare Part D claims for calendar year 2008 to identify potential doctor shoppers. To identify examples, GAO chose a nonrepresentative selection of 10 beneficiaries based on a number of factors, including the number of prescribers. GAO also interviewed policy officials from CMS and from prescription drug plans that administer the drug benefit program. GAO found indications of doctor shopping in the Medicare Part D program for 14 categories of frequently abused prescription drugs. About 170,000 beneficiaries (about 1.8 percent of beneficiaries receiving these 14 categories of drugs) acquired the same class of frequently abused drugs, primarily hydrocodone and oxycodone, from five or more medical practitioners during calendar year 2008 at a cost of about $148 million (about 5 percent of the total cost for these drugs). About 120,000 of these beneficiaries were eligible for Medicare Part D because of a disability. There may be justifiable reasons for receiving prescriptions from multiple medical practitioners, such as visiting specialists or several prescribers in the same medical group. However, one individual received prescriptions from 87 different medical practitioners in 2008. In such situations, there is heightened concern that Medicare beneficiaries are seeing several medical practitioners to support and disguise an addiction. GAO judgmentally selected 10 beneficiaries and found that they were doctor shopping for prescription drugs. These cases are among the more egregious and cannot be generalized beyond the examples presented. CMS has systems in place to identify individuals with doctor shopping behavior; however, according to CMS policy officials, federal law may not authorize them to restrict these individuals' access to drugs, including highly abused drugs, such as hydrocodone and oxycodone. One option to control doctor shopping used by Medicaid and some private sector plans is the restricted recipient program. It limits individuals identified as doctor shoppers to one prescriber, one pharmacy, or both for receiving prescriptions. There are issues to consider with a restricted recipient program, such as potentially denying legitimate drug needs and unknown administrative costs. These issues should be balanced against the potential protections such a program can provide. Doctor shopping for frequently abused drugs can increase the cost of the Part D program and jeopardize patient care. Controls proven to reduce doctor shopping could be considered by CMS. GAO recommends that CMS review its findings and consider steps such as a restricted recipient program for identified doctor shoppers and seek congressional authority, as appropriate. CMS agreed with the overall recommendation to improve its efforts to curb overutilization in Part D, but disagreed that a restricted recipient program is necessarily the appropriate control for the Part D program.