Medicaid Drug Fraud: Federal Leadership Needed to Reduce Program Vulnerabilities

GAO discussed Medicaid prescription drug diversion. GAO noted that: (1) some pharmacists routinely add medications to customers' orders to keep for themselves or sell to others; (2) some clinics inappropriately provide Medicaid recipients with completed prescription forms that are traded for merchandise from local pharmacies or sold on the street to the highest bidder; (3) patients often allow use of their Medicaid recipient numbers for billing purposes in exchange for cash, drugs, or other inducements; (4) prescription drugs cost Medicaid $5.5 billion in 1991 and expenditures for prescriptions tripled between 1975 and 1990; and (5) states have instituted controls and measures to prevent Medicaid fraud and facilitate pursuit, punishment, and financial recovery.