Executive Summary

MEDICAID ABUSABLE DRUG AUDIT SYSTEM (MADAS) ADOPTED BT NINE STATES to detect potential diversion of scheduled prescription drugs, HHS Deputy Inspector General for Investigations Larry Morey testified at an Oct. 10 House Energy & Commerce/Oversight Subcommittee hearing on health care fraud and abuse. Although no dollar savings have been calculated so far, Morey said that "three or four states" already are investigating cases that were generated by MADAS. The MADAS computer software package was developed by the IG's office with the help of the Drug Enforcement Administration. MADAS is "capable of identifying physicians, pharmacies, and recipients that deal in abnormal quantities of Schedule II-V prescription drugs with a high street value, and categorizing and prioritizing the identified targets," Morey explained. "To date, nine states have implemented the OIG program, seven states are installing and testing the program, and two states have requested that we generate the initial runs for them. Another 22 states are reviewing the technical data to determine the compatibility with their current systems." In his opening remarks, Subcommittee Chairman Dingell (D- Mich.) said the hearing would "lay the groundwork for future hearings on the crucially important and enormously expensive problem of waste, fraud and not-quite illegal abuses in the health care industry." According to Morey, the IG has "completed about 625 successful actions against pharmacists and their employees" over the last five years. He emphasized that the agency also "remains concerned about the internal control system Medicaid agencies use to check the use of frequently abused prescription drugs." With the help of MADAS, he said, the state Medicaid fraud control units that refer cases to the IG will be able to broaden their focus beyond pharmacists to the prescribing physicians and the recipients. The approach of preventing diversion and other misuse of scheduled drugs by requiring tracing systems such as multiple copy prescriptions is currently under HHS review. At a June National Institute of Drug Abuse conference on such systems, White House Office of National Drug Control Policy Deputy Director Herbert Kleber said he had asked both HHS and DEA to prepare within a month position papers on the system ("The Pink Sheet" June 10, p. 14). The White House decided subsequently to request responses to a series of questions rather than a recommended position; the Alcohol, Drug Abuse and Mental Health Administration's answers have been forwarded to upper levels of HHS.