Prime sees major spike in telemedicine-based Rx fraud

August 26, 2021
By: Jane Anderson

As published in AIS’s Radar on Drug Benefits
(Content reprinted with permission. Original article available on AIS’s website, available by subscription only.)

Prime Therapeutics LLC saw telemedicine schemes contribute to a 60% year-over-year increase in reported false claims from 2020 to 2021. The Blue Cross Blue Shield affiliate-owned PBM, which is in its second full year of an artificial intelligence-powered fraud, waste and abuse (FWA) reduction program, reported that the program saved its health plan clients $285 million in 2020, in part because it detected telemedicine-driven schemes.

Elan Rubinstein, Pharm.D., head of pharmacy benefits consulting firm EB Rubinstein Associates, says it’s unsurprising that increased telemedicine led to a spike in prescription fraud.

“Because telemedicine is relatively new and it grew very quickly during the pandemic, it seems a good target for fraud and abuse,” he tells AIS Health, a division of MMIT. “A traditional patient-physician encounter is in-person and based on a relationship, and the patient most commonly would take a resulting prescription to a local pharmacy that may have the patient and the prescriber on record. In contrast, a telemedicine encounter may be between strangers, not necessarily in the same state, who may never meet again. A medicine e-prescribed by a telemedicine physician would be transmitted to a patient’s local pharmacy, where both the pharmacist and the pharmacy computer system are unlikely to recognize the prescriber.”

Fraud Predates Pandemic Boom

Prime’s advanced FWA program launched in mid-2018, and through the end of 2020, it has garnered more than $640 million in savings, including more than $100 million from recoveries and more than $535 million in avoided costs, the company says. This translated into cost savings of $8.63 per member in 2020, according to the PBM.

“Telemedicine fraud began before the pandemic,” says Anne Mack, senior director of network compliance at Prime Therapeutics. “However, like other activities, the general shift to remote activities has also impacted the fraud schemes that are out there. We shop from home, FaceTime our friends, work remotely and obtain health care services remotely more often. Prescription fraud has also gone increasingly remote.”

Mack tells AIS Health that telemedicine schemes commonly involve billing for high-cost drugs that provide little to no benefit to members, since significantly lower-cost equivalents are available. Telemedicine also has allowed fraud to expand regionally, she says: “Texas and Florida are often thought of as the hotbeds of FWA activity, but with telemedicine being virtual, that footprint is expanding to all areas of the country.”

Prime finds fraud in all plan types, including commercial, Medicare and Medicaid, Mack says. “Sometimes fraudsters like to prey on the elderly, but the commercial population is so large and may only involve private payers, so that’s a big target as well,” she says.

Members May Receive Meds Unknowingly

“In many cases, the member does not know the doctor or the pharmacy that sends them unwanted prescriptions,” Mack says. “When our investigators go into the pharmacies, they often find piles of returned medications, unanswered voicemails and no customers. In other cases, the member agrees to order one drug but receives multiple drugs that they did not request and do not need.”

In one fraud case that Mack outlined, in March 2020 a pharmacy began submitting a large number of claims for PreGenna, a high-cost multivitamin that usually is prescribed for pregnant or lactating mothers.

“But that month, PreGenna claims accounted for approximately 61% of one pharmacy’s claim costs, at roughly $4,300 per fill,” Mack explains. When Prime’s team investigated, “they found that representatives of the pharmacy were contacting members and prescribers about PreGenna,” she says. “They were claiming the vitamin was a precaution against getting COVID-19. Most prenatal vitamins process at zero copay. The member would pay zero out-of-pocket. Prescribers, unaware of the full medication cost, wrote prescriptions for the vitamin.”

Prime’s investigation “confirmed claims of phishing and member steering” and uncovered $30,000 in fraudulent claims, Mack says, adding that the pharmacy was referred to the state’s board of pharmacy and to local and federal law enforcement.

Virtual World Is More Vulnerable to Scams

Ge Bai, Ph.D., an associate professor at Johns Hopkins University’s Carey Business School and Bloomberg School of Public Health, tells AIS Health that the increase in Prime’s reported false claims in 2020 is understandable, since “telemedicine is more prone to fraud and abuses, and 2020 experienced a vast increase in telemedicine.” In addition, Bai says, telemedicine-related prescription fraud can be larger in scale because it’s automated. She offers an analogy: Electronic hacking can reveal far more protected information than a paper-based breach. “Similar to most large-scale fraud, it is usually the criminal syndicates that perpetuate” the activity, she adds.

Mack says that several years ago, Prime partnered with SAS Institute Inc., which offers AI-powered, cloud-based fraud detection, to create “an advanced fraud analytic system that leverages integrated medical and pharmacy claims data, along with artificial intelligence, to detect and prevent pharmacy, member and prescriber FWA.”

Prime’s FWA program is able to view integrated medical and pharmacy claims, Mack says, adding, “without that view, this work wouldn’t be possible,” since “the visual link analysis” allows the fraud team to track multiple events “to pinpoint common denominators of fraudulent activities,” which often are sophisticated schemes.

Beyond its advanced analytics, the program also includes pre-contracting review of pharmacies at high risk of fraud before enrollment, pharmacy education, a fraud tip hotline, pharmacy audits, fraud investigations, system edits, utilization management, formulary exclusions, pharmacy action plans and, when appropriate, pharmacy network termination, Mack says.

When fraud or abuse is detected, “Prime works closely with our Blues plans to determine the appropriate action to prevent similar occurrences,” she says. Cooperative efforts with health plans have included joint desktop and onsite investigations that have included both PBM and Blues plan fraud teams, and Prime also convenes health plans to share best practices, according to Mack.

Algorithms Can Uncover More Fraud

AI-powered fraud prevention and detection has become common and even standard, not only in the PBM industry but in various service industries, Bai observes. “AI-backed methods are more efficient and effective than older methods, which explains its increasing prevalence,” she says.

Telemedicine-related prescription fraud expanded rapidly as the pandemic took hold, but Bai says she expects “a new equilibrium will be reached between the ramped-up fraudulent activities and the strengthened prevention and detection effort. Both parties are constantly learning from each other and upgrading their games.”

Mack also predicts that the telemedicine-based schemes likely will continue. “Telemedicine as a health care delivery method is here to stay, so FWA feeding off of that will continue as well,” she says. “Will it look the same as it does now? Probably not. These fraudsters work to make their money one way, then evolve their schemes to try to make it another way. They are professionals and have very sophisticated approaches.”

Rubinstein adds: “The rapid increase in telemedicine does seem related to the increase in fraud and abuse. It may be that as telemedicine system processes and controls catch up to the rapid increase in telemedicine, that fraud and abuse will go down. But that’s conjecture — no basis other than hope.”

Related news


May 15, 2024

Prime/MRx experts share clinical insights for migraine treatment

Drs. Tracey Garcia and Amy Pappas, board-certified neurologists, reviewed migraine risk factors and treatments in a recent webinar moderated by Dr. Marci Chodroff, vice president of medical affairs


May 14, 2024

Prime/MRx real-world GLP-1 persistence and adherence data published in Journal of Managed Care & Specialty Pharmacy

Among the key findings from the study — among 4,066 members, Prime/MRx found 1 in 3 stayed on their GLP-1 and 27% took their medication as intended


May 14, 2024

Prime/MRx releases its first corporate social responsibility report

New report, an evolution of previous DEI reports, aims to demonstrate transparency and accountability for company’s corporate social responsibility journey