This summer, federal authorities arrested nearly 250 people in a massive bust of alleged Medicare fraud.  The government contends the fraud totaled more than $700 million, and came on the heels of the Department of Health and Human Resources and Office of Inspector General’s report “Ensuring the Integrity of Medicare Part D,” a document which analyzed data from the labyrinth of distribution of billions of dollars for prescription medication.  
 
The popular Medicare Part D program includes annual spending on prescriptions of more than $121 billion annually and has been subject to a spectrum of fraudulent activity. Since its inception, the program has battled with individuals reselling prescriptions and doctor shopping to obtain excessive medication; pharmacies dispensing controlled substances without requisite prescriptions; and prescriber kickbacks. The Office of Inspector General’s report analyzed data to identify areas where fraud was likely occurring so law enforcement could target perpetrators.
 
More than 700 physicians who ordered extremely high percentages of drugs were identified in the report, and pharmacies were cited for errantly filling prescriptions with improper paperwork. Physical therapists, massage therapists and other non-medical providers were also identified as having improperly written prescriptions which were filled.
 
The report lead authorities to conclude that several specific outlets had a high potential for fraud, and investigators ultimately discovered more than a thousand pharmacies billing particularly high amounts of prescriptions at a rate of nearly three times what the average patient receives under the plan. The main type of prescriptions were opiate-based controlled substances. 
 
This is another instance of law enforcement’s integration of big data analysis into investigating corporate fraud. In the past, regulators and prosecutors were limited to pouring over thousands of accounting columns and spreadsheets. Today, tools like AIT’s Comprehensive Financial Investigative Solution allows prosecutors to automatically process paper and electronic documents, record them in a centralized database, and then perform data analysis, graphic visualizations of financial transactional patterns, and fund flows. Agents now have the ability to cut through hundreds of thousands of records, and cases that were at one time dismissed because of the sheer volume and complexity are now viable prosecutions. With recent sweeping policy declarations from the U.S. Department of Justice and other agencies about white collar prosecution, we can expect these types of investigative tools to be used more and more often.
 
Patrick Mincey is a trial lawyer in Wilmington, where he founded the Criminal Defense Group at Cranfill Sumner & Hartzog LLP. His criminal practice ranges from representing individuals and corporate clients who are targets, subjects or witnesses in federal and state white collar proceedings to “blue collar” defendants charged with murder, drug conspiracies and assaults. To contact Patrick Mincey, call (910) 777-6017 or email him at [email protected].