MEDICAID ABUSE ON RISE

Murphy -- Medicaid payments for prescription drugs have been steadily
climbing over the past few years in Cherokee County. Medicaid paid
about $12.2 million for prescription drugs last fiscal year, almost
double from five years ago. That's $12.2 million for a county of
about 25,000 people. Most of this money is not going to aid a person
with a legitimate illness, Sheriff Keith Lovin said. He estimates
that more than 50 percent of this is fraudulent. People exploit the
system by doctor shopping, allowing them to attain certain
prescription drugs for recreational use and/or sell them for profit.
"These people are stealing from you," Lovin said to taxpayers.

Carolina's abuse leader The county is among the state's leaders in
prescription drug abuse. Twenty-nine people have died from
prescription drug overdoses in the past five years. "That's a lot of
deaths for a county this size," Lovin said. Among the most popular
prescription drugs are hydrocodone and Oxycontin. These are powerful,
highly addictive pain killers usually given to late-stage cancer
patients or others experiencing excruciating pain.

"Hillbilly heroin" Not long after its introduction in 1995,
Oxycontin, an opiate that has the similar effects of heroin, has been
a popular drug in Appalachia, earning the nickname "hillbilly
heroin." People who abuse the drug are drawn to the intense euphoria.

The feeling is called being "on the nod;" this describes the state
between being awake and asleep where the head nods. The medicine is
supposed to be administered orally, causing a gradual time release of
the drug. However, inject or snort the drug; this puts it immediately
into their blood stream, giving them an immediate high. Many abusers
also sell the drug. Hurt said the street price for Oxycontin is
saround $1 per milligram.

The highest dosage of Oxycontin comes in an 80 miligram pill. Other
popular drugs are methadone and fentanyl, both opiates. Cracking down
Cathy Hurt is the fraud investigator for the county's Department of
Social Services. A former police officer in Broward County, Fla., it
is her job to crack down on those who abuse the system. Hurt said
most of her leads come from customers who become disgruntled with
their seller after a price increase. After receiving a tip, Hurt
conducts an investigation on the suspect. She mostly looks over
Medicaid receipts on microfilm. If she has enough reason to believe a
suspect's guilt, she hands the case over to the Drug Task Force,
which conducts the law enforcement side of the investigation and can
make arrests.

Pharmacy profiles Tom Frye, the commander of the Drug Task Force,
said it is difficult to prove guilt in a case of possible medicaid
fraud. It greatly assists Frye and his team if they have a pharmacy
profile of a suspect.

The only problem with that is law enforcement officials need a search
warrant to obtain a pharmacy profile. Frye said obtaining a search
warrant is "time consuming." He must write up a probable cause, then
have a judge approve it; the process takes about four hours.
Alternatively, the State Bureau of Investigation can conduct a
search, as can the federal Drug Enforcement Agency. However, these
organizations do not have local offices, so it usually takes a week
before they can do a search. Frye said there are cases when he needs
to conduct a search immediately, and four hours is too long to wait.
Lovin said he would like the law changed so that he can authorize a
search warrant for a pharmacy profile, thereby expediting the
process. State Sen. John Snow (D-Murphy) said he is working with
Lovin to pass such a law. "It makes better sense if you need to get
something done in a hurry," Snow said.

High recidivism rate After an arrest is made and a sentence has been
served, Hurt, the abuser is right back at the social services office
on Peachtree Street and legally renewing their Medicaid, beginning
the abuse process over again. "Our hands are tied," Hurt said.
Despite abusing the system, a person is legally entitled to renew
Medicaid benefits and attain a "blue card," leading to further
exploitation, Hurt said. "North Carolina Medicaid rules inadvertently
reward bad behavior," Hurt said. Hurt said if someone abuses their
private insurance provider, their membership is revoked.

But social services is legally required to award Medicaid benefits to
anyone who falls under a certain income level, regardless of prior abuse.

Who pays? A person who abuses Medicaid has "an endless supply" of
drugs, Hurt said. Not only are the drugs free, but a Medicaid
recipient is not required to pay the co-payment, Hurt said. This tab
is later paid for by social services. Plus, a Medicaid recipient can
elect to get the more expensive name-brand drugs as opposed to a
cheaper generic. Medicaid will pay up to $1,500 a month for a person
with a blue card, with a limit of six prescriptions. Gov. Mike Easley
has proposed to bump the limit to 11. Snow said the new limit is to
help elderly residents who require many prescriptions, but their
fixed incomes make it difficult to afford them. However, Hurt said
this new limit will "open up a Pandora's box" in terms of those
misusing Medicaid. "When was the last time you walked out of a
doctor's office with 11 prescriptions?" Hurt said.

Going shopping Abusers commonly doctor shop, or get prescriptions
from several doctors, exaggerating or creating the supposed pain.
Medicaid allows multiple doctor visits for one ailment. "If you go to
a doctor and you say your pain is a 10 on a scale of one to 10, the
doctor is required to treat you for the 10," Hurt said. Another
method is for the abuser to locate a physician who readily signs
multiple prescriptions. Dr. Miles Hyman, a pain management specialist
in Franklin, is a familiar name to Hurt. She said "almost 100
percent" of Medicaid abusers have had their prescriptions given to
them by Hyman. "He's our main supplier," Hurt said. Hyman is under
investigation from SBI and DEA agents for alleged Medicaid fraud.

He has not been convicted and remains licensed to practice in
Franklin. Some physicians are encouraged by Medicaid's generous
payments to see as many people as possible without making proper
diagnoses. Hyman said he had no comment for this report. Dr. Mark
Walters, the medical director for the emergency department at Murphy
Medical Center, said people try to cheat him out of some
prescriptions at least once a day. When a patient comes into his
hospital complaining of pain, Walters said he is concerned. "I'm a
patient advocate," Walters said. "My instinct is to help them." So,
if Walters thinks the person is legitimately in pain, he will
prescribe pain medication. When he does, usually oxycodone, it's in a
small amount. "It's a hard thing to prove if someone is in pain,"
Walters said. "But I give them the benefit of the doubt."

Checking them out Sometimes, though, that pain doesn't exist, and
those patients are simply looking for some pills. "We check people's
stories out the best we can," Walters said. He said if he suspects
someone is faking, he will make phone calls to other pharmacies and hospitals.

He can also order a drug screen, which will reveal current drugs in
their system. Walters said the problem has grown to the point where
patients have stolen prescription slips and forged the signature of
the physician for medication. "It's a problem that's growing,"
Walters said. "There's a lot more than there used to be." Purdue
Pharmaceuticals of Wilson, manufactures Oxycontin. Public relations
spokesman Jim Heins said his company recognizes the drug epidemic.
"We're certainly concerned about [drug abuse]," Heins said.

Drug companies get involved Purdue has tried to combat abuse of its
drugs by issuing free tamper-resistant prescription pads to combat
forgeries and lobbying for prescription state monitoring programs to
reduce doctor shopping. Cherokee County Social Services Director Lucy
Davis said the state's Medicaid system is at fault for the abuse.
"The state Medicaid system needs to be overhauled," Davis said. Hurt
said she would like Medicaid to not be renewed to those who have
exploited their benefits.

System part of problem She said the current system's flaws, which her
organization is obliged to adhere to, is the reason for unnecessary
Medicaid payments. "Why can't we have a Medicaid abuse charge?" Hurt
said. "The punishment doesn't fit the crime." Snow said he has
discussed this idea with Lovin, which he will consider when he next
goes to Raleigh. "I don't have a problem with that," Snow said. "I
think it's a good idea." Snow said, however, that he will closely
examine such a law to ensure that abusers aren't completely denied
access to drugs should it become necessary that they have access to them.

Making progress Despite the hindrances of the current system, the
state has announced progress in the crackdown on medicaid fraud. On
Oct. 27, Attorney General Roy Cooper said investigators have
recovered $30 million, a record amount, this fiscal year. This
recovery has led to 26 criminal convictions. "We'll keep up our
crackdown on Medicaid fraud so that patients get help and providers
of quality care at a fair cost to the taxpayers," Cooper said. The
state, however, spent about $9.4 billion in Medicaid payments last
fiscal year. Despite this state success and locally coordinated
efforts of police, social services and Snow to curtail Medicaid
abuse, Frye said the fight is long from over. "[Drugs] aren't going
to go away overnight," Frye said.