Drug Diversion Fraud/Pharmacy Fraud

Medicaid fraud, from the Office of Inspector General (OIG), U.S. Department of Health & Human Services

Prescription drug abuse causes many more problems and is much more common than the common “street” drugs such as heroin and cocaine. Prescription drug abuse causes many deaths every day through mixing various medications or using the drugs for recreation when they were not medically prescribed for the individual. Because of the high desire of illegal prescription drugs, this makes medications very attractive for criminals. Drug diversion is where a prescription drug is taken out of the normal chain of commerce and diverted for sale or use in some illegal activity. Often these diverted drugs are billed to Medicaid before they are stolen.

How the Scam Works

  • One area of concern is prescription shorting. This is where a fraudulent pharmacy routinely dispenses prescriptions a few pills short. In a large prescription the pharmacist hopes the beneficiary will not notice. If the pharmacist does this repeatedly, the pharmacy can steal a lot of money from Medicaid because Medicaid is billed for the full amount.
  • In a similar scheme, a fraudulent pharmacy may fill a partial month’s drug supply and ask the beneficiary to come back for the rest. The pharmacist then bills Medicaid twice in one month for the full amount.
  • A new prescription drug diversion tactic is to talk a beneficiary into getting a prescription from his physician for a narcotic. It is then filled and billed to Medicaid. The beneficiary is then paid cash for the script and the drugs are cycled back through the pharmacy or sold on the street.

How to Fight Back

  • Although time-consuming, consider counting your pills when you first get the prescription filled to make sure you were not shorted on the amount.
  • Do not participate in prescription drug diversion fraud. It is highly illegal and criminal behavior and can get the participating beneficiary into severe legal trouble as well.
  • When getting prescriptions filled, watch out for pharmacies that fill prescriptions for less than the number of days or the number of pills than is listed on the doctor’s prescription. For example, the prescription is for a 30-day supply, but the pharmacist only fills for 10 days and tells you that you must come back for the rest. Absent rare exceptions, you should always receive the number of pills your doctor prescribes for you.
  • In nursing homes, make sure that you receive your medication, especially pain medication, in the amount and strength you believe is proper.

Report Suspected Fraud

To report suspected fraud, click here.

FindFind Help in Your State