The document summarizes a presentation on the opioid crisis and the role of CPAs. It provides an overview of the scope and history of the crisis, describes recent case examples of fraud and abuse, and outlines affected industries and risk areas that require internal controls monitoring. It also discusses what CPAs can do to help address the crisis, such as focusing on the flow of money, monitoring drug costs, investigating physician payments from pharmaceutical companies, and ensuring compliance to avoid litigation.

1. 2019 GSCPA Healthcare Conference
February 22, 2019
Presented by
Valerie Rock, CHC®, CPC®
The Opioid Crisis
The Important Role of CPAs

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Agenda
 An overview of the scope and history of the crisis
 The crisis in the news
 Recent case examples
 Key definitions
 Current events and changes: Is there any good news?
 A description of affected risk areas that require internal
controls
 Examples of monitoring for opioid crisis fraud and abuse
cases: What can CPAs do?

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1. Centers for Disease Control and Prevention (2019) https://www.cdc.gov/drugoverdose/epidemic/index.html
The Opioid Crisis: Overdose Deaths1

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Scope of the Crisis2, 3
 In 2017, 70,237 Americans lost their lives to drug overdoses
(up from 63,000 in 2016)
 Of these, 47,600 (67.8%) were linked to opioids:
 Prescription opioids and synthetic opioids
 Heroin
 Illicitly manufactured fentanyl (IMF)
 July 2018, Attorney General Jeff Sessions stated:
 “It is incredible but true that for Americans under the age of 50,
drug overdoses are now the leading cause of death”
2. Centers for Disease Control and Prevention (2019) https://www.cdc.gov/drugoverdose/data/statedeaths.html
3. www.fbi.gov Health Care Fraud Takedown, July 13, 2017

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Continued increases in Georgia (+10.5%)4
4. Centers for Disease Control and Prevention (2019) https://www.cdc.gov/drugoverdose/data/statedeaths.html

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The History
Opioid
Crisis
Increase
demand and
supply of
illegal opioids
JCAHO
expectations
of the patient
experience
Patient
addiction leads
to illegal use
1980 – 1990s
Opioids seen
as a safe
response
to pain

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In the News
 August 16, 2018
 President Trump calls on his Attorney General to sue opioid
makers, the latest move by his administration to combat the
highly addictive painkillers linked to tens of thousands of U.S.
deaths a year
 President Trump asked Attorney General Jeff Sessions to bring a
“major lawsuit” against drug companies that “are really sending
opioids at a level that it shouldn’t be happening”

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President Declares a Crisis
 On October 26, 2017, President Donald Trump declared
a public health emergency
 President’s Commission on Combating Drug Addiction
and Opioid Crisis issues preliminary report:
 Describes the overdose death toll as September 11 every three
weeks

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President Declares a Crisis (cont.)
 Attorney General Jeff Sessions announces “new tools”
 Operation Synthetic Opioid Surge, or S.O.S.
 Adding prosecutors to high-risk areas to support the arrest,
prosecution, and conviction of fentanyl dealers
 Opioid Fraud and Abuse Detection Unit
 A data analytics program that focuses specifically on
opioid-related healthcare fraud

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Opioid Fraud and Abuse Detection Unit
 New U.S. Department of Justice (DOJ) pilot program
 Will use data to identify those worthy of prosecution
 Data analytics team will identify:
 Which physicians are writing opioid prescriptions at a rate
exceeding peers
 How many of a doctor’s patients died within 60 days of an
opioid prescription
 Average age of patients receiving prescriptions
 Pharmacies that dispense disproportionately large amounts of
opioids
 Regional spots for opioid issues

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Opioid Fraud and Abuse
Detection Unit (cont.)
 In July 2017, DOJ conducted nationwide sweep:5
 More than 400 individuals, including doctors, nurses, and licensed
medical professionals charged with $1.3 billion in Medicare fraud
schemes
 One in four cases involved opioid-related crimes
 In 2018, another mass enforcement effort undertaken:6
 DOJ coordinated the efforts of more than 1,000 state and federal
law enforcement agents to charge more than 600 defendants,
including 76 doctors, with more than $2 billion in fraud
 On October 25, 2018, the DOJ created the Appalachian Regional
Rx Opioid Strike Force, indicating an allocation of significant
resources (Georgia not listed in included states)
5. DOJ (2019) https://www.justice.gov/usao-mdfl/pr/national-health-care-fraud-takedown-results-charges-against-over-412-individuals
6. DOJ (2019) https://www.justice.gov/usao-mdfl/pr/national-healthcare-fraud-takedown-results-charges-against-601-individuals-responsible

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January 2019:
Largest Fentanyl Bust in U.S. History7
 Customs and Border Protection officers seized 254 pounds
of fentanyl and 395 pounds of methamphetamine
 Sniffed out by a drug-sniffing dog
 In a compartment of a floor in a trailer of cucumbers
 Street value:
 Fentanyl: $3.5 million
 Methamphetamine: $1.1 million
7. Customs and Border Protection (2019) : https://www.cbp.gov/newsroom/local-media-release/cbp-officers-seize-largest-amount-fentanyl-cbp-history

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Tidal Wave of Litigation
 The drug industry, including opioid painkiller manufacturers,
distributors, wholesalers, and pharmacy chains are facing a
“tidal wave” of litigation
 At least 30 states, cities, and counties have either filed
lawsuits or are formally recruiting lawyers to initiate legal
actions
 Complainants argue that manufacturers used aggressive
sales tactics to boost revenues while downplaying the risks
and turning a blind eye to excessive orders

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Case Example: McKesson Corporation
 DOJ announces a $150 million settlement8
 Case alleges McKesson failed to detect and report “suspicious
orders” for controlled substances distributed to independent and
small chain pharmacies
 Settlement requires McKesson to suspend sales of controlled
substances from distribution centers in Colorado, Ohio, Michigan,
and Florida for several years
8. DOJ (2019) https://www.justice.gov/opa/pr/mckesson-agrees-pay-record-150-million-settlement-failure-report-suspicious-orders

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Case Example:
Boston Medical Center Study
 Study published in 2017 found that 1 in 12 doctors has
received money from drug companies marketing
prescription opioid medications9
 Further, 68,177 doctors received more than $46 million
from drug companies
 Doctors were paid the most to promote fentanyl
 Companies were not aggressively marketing tamper-proof
versions of the pills
9. Boston Medical Center (2017) https://www.bmc.org/news/press-releases/2017/08/09/one-12-doctors-accepts-payment-pharmaceutical-companies-related

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Case Example:
Doctor Pleads Guilty to Fraud
 Massachusetts Doctor was seeing 100+ patients a day
 Writing prescriptions for oxycodone and other opioids without
doing exams or tests
 Wrote more oxycodone prescriptions in one month (over 1,000)
than some of the largest hospitals in Massachusetts

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Case Example: Physician Charged
with Illegal Prescriptions
 Alabama physician charged with healthcare fraud
 Saw 80 to 145 patients per day
 Wrote prescriptions for all patients seen
 Initial visits lasted only five minutes or less
 Follow-ups for medication refills lasted two minutes or less
 Physician did not obtain prior medical records and did not treat
with anything other than controlled substances

18.  Opioids
 Fentanyl
 Heroin
 Synthetic Drugs
Common Terms

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Opioids
 Opioid drugs can treat both acute and chronic pain
 Opioids include:10
 Fentanyl
 Hydrocodone
 Hydromorphone
 Meperidine
 Methadone
 Morphine
 Oxycodone
 Oxymorphone
10. Centers for Medicare & Medicaid Services (2019) www.cms.gov//CMS-Opioids

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Fentanyl
 A synthetic opioid narcotic analgesic similar to morphine11
 50 to 100 times stronger than morphine12
 Legally administered: available by prescription to treat
severe pain13
 Often prescribed for cancer patients and people in severe pain
who cannot tolerate morphine (CDC), usually administered in
patches or lozenges
11. Merriam Webster Dictionary
12. National Public Radio www.npr.org
13. Centers for Disease Control and Prevention www.cdc.gov

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Fentanyl (cont.)
 Illegally obtained:14
 Starting in 2013, illegally manufactured fentanyl increases
 Cheaper to make than heroin, very potent, more doses per batch
 U.S. DEA: Fentanyl showing up in counterfeit pain pills, often found
in the form of powder, blotter paper, patches, counterfeit tablets
14. Centers for Disease Control and Prevention (2019) www.cdc.gov

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Heroin
 Heroin is an illegal, highly addictive opioid drug15
 Overdose can cause slow and shallow breathing, coma, and
death
 Often used with other drugs or alcohol
 Often smoked and snorted
 Users at risk for HIV, Hepatitis C, Hepatitis B, bacterial infections
15. Centers for Disease Control and Prevention (2019) www.cdc.gov

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Synthetic Drugs
 Created using man-made chemicals rather than natural
ingredients
 Examples:16
 Ecstasy
 LSD
 Methamphetamine
 Synthetic marijuana
 “Designer drugs”
 Synthetic (chemically made) version of an illegal drug that
was slightly altered to avoid having it classified as illegal
16. www.drugfreeworld.org

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Is There Any Good News?
 Opioid prescriptions are decreasing nationwide17
 Between 2013 and 2017, opioid prescriptions decreased by more than
55 million, a 22.2% decrease
 All 50 states have seen a decrease in opioid prescriptions over the last
5 years
 The nation saw a 9% decrease in prescriptions between 2016 and 2017
alone
17. The Visual Capitalist (2018) https://www.visualcapitalist.com/americas-opioid-epidemic/

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Is There Any Good News? (cont.)
 Prescription drug monitoring programs (PDMPs) are
being used more than ever
 PDMPs drug monitoring programs are databases used to help
inform physicians’ clinical decisions
 More than 1.5 million physicians and other healthcare
professionals are registered in state-based PDMPs
 State PDMPs used more than 300.4 million times in 2017

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Is There Any Good News? (cont.)
 The American Medical Association Opioid Task Force
encourages all physicians to enhance their education
 In 2017, more than 549,700 physicians and other healthcare
professionals completed continuing medical education training
 In 2016 and 2017, physicians and other healthcare professionals
used the AMA opioid microsite website to access education and
training resources

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Is There Any Good News? (cont.)
 Physicians continue to increase access to life-saving
naloxone (a narcotic blocker used to treat narcotic drug
overdose)
 AMA Opioid Task Force and U.S. Surgeon General urges greater
use of naloxone
 Naloxone prescriptions more than doubled in 2017
 Physicians are helping to improve access to high-quality
treatment for opioid use disorder
 Presently, more than 50,000 physicians are certified to provide in-
office buprenorphine for the treatment of opioid use disorder
across all 50 states

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However…
 There is new concern that patients are turning more to
illegal opioids like fentanyl to fill the gap
 Deaths related to heroin and illicit fentanyl, and to
prescription opioids, continue to rise
 Decreasing prescriptions alone will not end the epidemic
Designed by topntp26 / Freepik

29.  Physician practices
 Hospitals
 Pharmacies
 Distributors
 Wholesalers
 Manufacturers
What Industries Are Affected?

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AMA Recommendations
 All public and private payers should ensure that their
formularies include FDA-approved forms of medication
and assisted treatment
 Policymakers and regulators should increase oversight
and enforcement of parity laws for mental health and
substance abuse disorders

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AMA Recommendations (cont.)
 All public and private payers, and pharmacy benefit
management companies, must ensure that patients have
access to affordable, non-opioid pain care
 Put an end to the stigma; patients with pain or substance
use disorders deserve the same care and compassion as
any other patient with a chronic medical condition

32. CPAs serving as:
 Chief Financial Officers
 Controllers
 Internal Auditors
 External Auditors
 Compliance Officers
 Government Auditors
 Government Investigators
How Is the Accounting Industry Involved?

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Focus on the Flow of Money
 Medicare spending for Part D drugs has risen more than
$10 billion a year
 Overall spending for abused opioids exceeded $4 billion
 Result: federal and state officials are committed to audits
and investigations
 Will address the flow of money from start to finish
 Practitioners can expect increased audit and investigative scrutiny
of tax dollars through Medicare, Medicaid, Tricare, and private
insurance

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What Can CPAs Do?
 Do the numbers add up?
 Can these increased volumes and revenues be supported
by the current staffing?
 Is it possible for one physician to see 100+ patients per day?

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What Can CPAs Do? (cont.)
 For healthcare entities:
 Monitor drug costs, particularly opioid drug costs
 Investigate significant changes in drug expenses
 Consider using internal data to identify “superprescribers” of
opioids
 Sharp increases in drug costs can highlight inventory issues
 Regardless of quantities of opioids in inventories, sufficient
physical and financial controls needed to mitigate opportunities
for theft and misuse
 Internal audits should be used to test these controls

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What Can CPAs Do? (cont.)
 Pharmaceutical company payments:
 Investigate increases in revenue for opioids
 As mentioned, 1 in 12 doctors have received some sort of payment
from drug companies
 Although most payments are small (meals, drinks, etc.), research
indicates pharmaceutical payments result in increased prescribing
of marketed medication
 Review CMS’ Open Payments Data website18 to search for
payments made by drug companies to physicians and teaching
hospitals
18. Available at: www.openpaymentsdata.cms.gov

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What Can CPAs Do?(cont.)
 To avoid litigation:
 Verify the legality of any payments
your entity receives from drug
companies
 Ensure the payments are reported
in accordance with the Physician
Payments Sunshine Act
 If you identify any undefined or
uncategorized revenue streams,
ask questions about the origin
of the revenue

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What Can CPAs Do? (cont.)
 Urine drug screens and testing revenue:
 Payers view the billing of urine drug screens as unnecessary and
fraudulent when the documentation does not clearly indicate
medical necessity per their coverage guidelines
 Guidelines have changed significantly as opioid prescription use
has increased
 If significant increase is seen, confirm that the appropriate
monitoring and auditing is performed
 Ensure that documentation supports the order per state and
federal governmental and payer guidance
 Ensure there are no medical necessity concerns

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What Can CPAs Do?(cont.)
 Working for a laboratory:
 Monitor the marketing department’s spending on complimentary
supplies that are provided to physicians and other ordering
providers
 In 2015, a laboratory paid $256 million to settle claims for
unnecessary drug testing
 The company had provided free testing cups to physicians in
exchange for referrals
 Free supplies to physicians, which may be considered
inducement for referrals, are not permitted in the healthcare
industry

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Be Part of the Solution
 Robust monitoring process is important in identifying
potential fraud, waste, abuse, and compliance risks
 It is just as important to have communication protocols in
place
 Work with your organization’s compliance officer to
determine potential indicators of an issue
 Include indicators that affect entity’s revenue, legal, and
compliance issues
 If an issue is identified:
 Notify your organization’s compliance officer
 Your knowledge in accounting coupled with healthcare experience,
can help identify potential fraud and abuse to mitigate risks

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Questions?

42. PYA, P.C.
800.270.9629 | www.pyapc.com
Valerie Rock
CHC®, CPC®
PYA, P.C.
vrock@pyapc.com
Thank you!