Medicaid oversight questions

By The Gazette Editorial Board

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Some disturbing red flags about Medicaid were waved in the past week.

Last week, the Inspector General for the Department of Health and Human Services reported that only 62 percent of Medicaid payments for prescribed drugs had been verified as approved by the Food and Drug Administration. Which means more than one-third of Medicaid drug payments - about $6 billion in 2008 - might have gone for drugs not covered by Medicaid. FDA approval is a prerequisite to be covered under Medicaid.

On Monday, a Gazette story told of Sen. Chuck Grassley's concerns about some Medicaid doctors prescribing psychiatric drugs at sky-high rates. Iowa's Grassley, one of the Senate's fiercest watchdogs, cited research that raises suspicion of widespread fraud and waste of billions in taxpayer money, as well as danger to patients.

Both reports raise serious questions about management and oversight of Medicaid, which receives nearly $300 billion a year in federal funding.

Grassley reviewed information from all 50 states and found alarming numbers. For example: a Florida doctor who wrote 96,685 prescriptions in 21 months, an Ohio physician with 50,000 prescriptions in 2008 and 40,000 in 2009, and a Texas provider who prescribed Xanax 27,000 times within two years - all of them averaging well over 100 prescriptions per day.

Meanwhile, the drug verification problem appears largely related to inaccurate or incomplete information on the national directory of FDA-approved drugs. Some of the drugs in question may have passed FDA muster but the directory's information is substantially outdated.

All of which should trouble state governments, which pay a share of Medicaid costs. Patient enrollment, fueled by unemployment, loss of health care benefits and other recession-related factors, hit a record high this year. States are facing Medicaid budget shortfalls estimated at more than $140 billion, including about $600 million in Iowa.

Grassley believes one cause of possible Medicaid waste and fraud is collusion of pharmaceutical companies with doctors. If that's true, shady deals may be putting some patients at risk.

Many of the drugs being prescribed at high rates are for mental health or behavior problems. Such as Ritalin, a drug used to treat attention-deficit and hyperactivity disorders. But increasing numbers of teens and young adults are using it for nonprescribed purposes. Access to Ritalin and other prescription drugs too often is too easy.

Medicaid administrators and doctors have some explaining to do.