DOL Reports 57% Increase in Suspected Fraud Referrals

Monday, March 16, 2020 | 0

The U.S. Department of Labor reported a 57% increase in suspected workers’ compensation fraud referrals from 2017 to 2019.

The department said it referred 42 cases of suspected fraud for prosecution in 2007. That increased to 65 in 2018 and 66 in 2019.

Referrals since 2017 are up significantly compared to the three cases of suspected fraud that were reported in 2016.

“One key success story is the significant savings realized on pharmaceutical costs by cracking down on a questionable prescribing practice known as ‘combo kits,’” Julia Hearthway, director of the Office of Workers’ Compensation Programs, said in a statement. “These kits commonly include two readily available products, either two drugs or a drug and medical supplies. Combining the products as a single package allows a prescriber to omit the National Drug Code assigned to those individual products and instead use only a singular, unique NDC for the package that bypassed the usual pricing mechanisms and allowed for a higher price to be charged.”

Drugs and supplies sold in kits can typically be purchased individually at a fraction of the cost, according to Hearthway.

OWCP initiated a process in which it automatically denies unique NDCs that it has flagged as questionable, which triggers a review for approval. The kits are authorized only when medical necessity is proven and lower cost, commercially available alternatives are unsuitable or unavailable.

“Continued monitoring of prescribing and dispensing practices has been revealing,” Hearthway writes. “Our data shows that over 30,000 attempts were made to fill these types of combined kits/drugs after OWCP initiated controls. Those controls resulted in a savings of over $50 million dollars.”