Healthcare System Exposed to New Pharmacy Fraud

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New type of pharmacy fraud

The country’s healthcare and medical system is exposed to a new type of a pharmacy fraud that is costing huge amount of money. Fraudulent agencies that are posing as pharmacies are making fake prescriptions and billing these sums to Medicare, Medicaid, and the private insurers. These are resulting in the agencies spending several million dollars on prescriptions that are not real. According to one of the field agents, the number of such frauds were increasing and becoming a concern for the Health Department.

Frauds cost millions in taxpayers’ money

Although, it was unclear as to how much these phantom pharmacy frauds were causing the department, other health care frauds were already costing over $60 million annually. One of the factors that are escalating the healthcare costs in the USA is such frauds. The department is trying ways to control swindles related to healthcare.

Modus operandi of phantom pharmacies

The scammers provide a legal address to establish a bogus pharmacy that is a shell company. With stolen or illegally gotten IDs of doctors and insurance numbers of various patients, the fraudsters provide prescription for expensive drugs. The medications are really neither prescribed nor dispensed. The bills are in turn provided to the insurance companies for reimbursement, which can amount from an amount between $2000 and $8000.

Effective methods to control healthcare costs

An assistant inspector general who is investigating such frauds said that these swindles were hundred percent frauds and were increasing in number. However, it was difficult to nail these phantom pharmacies because the duration of their operations last between sixty days and eight months before moving to a new address. The quick disbursement of the claims that is necessary for Medicare is also posing a challenge. The law requires that the Medicare department settle such claims within two weeks, which does not provide adequate time to verify these claims.

Participation by trained professionals

The phantom pharmacies are fast spreading across several cities in various states, which are making it difficult for the authorities to take action. Moreover, trained medical professionals are assisting some of these fraudulent set-ups. Several unethical doctors provide fake prescriptions to these fraudsters. In addition, a legal pharmacy may run a parallel business involving a phantom pharmacy. Another challenge for the officials is that there are organized crime rings that are difficult to crack. Several people attend pharmacy school, and then open a legal pharmacy along with phantom pharmacies. The money from these fraudulent schemes flow outside in various money-laundering plans.