No More Paper Prescriptions: Docs Fight Fraud by Going Electronic

With prescription drug abuse rampant in the U.S., New York is taking steps to stop it.

New York State is going paperless, at least when it comes to drugs.

A deadline imposed by the New York State Department of Health is rapidly approaching, to make New York State one of the first to axe state-issued prescription pads. By March 27, 2015, all prescriptions in the state of New York must be filed electronically.

The last arm of New York’s 2012 I-STOP legislation, universal electronic prescribing is meant to control, track, and monitor the distribution of drugs on a completely new level: where the drugs are prescribed vs. when and where someone picks them up. The former pad-and-pen system, derided for doctors’ notoriously bad handwriting and ease of forgery, suddenly seems archaic and insecure when put next to the ubiquity of computer systems.

When the Internet System for Tracking over-Prescribing (I-Stop) legislation was signed into law in 2012, it developed several aspects. The most visible of these is a controlled-substance prescription database, where prescribers search for a patient’s history with painkillers and other controlled substances. The legislation also includes drug awareness education and drug return programs. The last arm of the bill is universal e-prescribing for all prescriptions.

“The reason why e-prescribing came into the package was a realization that there was a market for the paper prescriptions, for both controlled substances and other drugs that were deriving from the paper itself,” Paul Mahoney, Chief Assistant in the Medicaid Fraud Control Unit in the New York State Attorney General’s Office, told The Daily Beast.

Mahoney helped author the I-STOP legislation based on data his office collected in regard to fraud. “We were finding people in possession of thousands of paper prescriptions,” he said. “The paper makes it very easy to commit controlled substance offenses and to steal other drugs because the paper conveys a right to have the drugs.”

A 2011 New York Department of Health memo stated that at least 1.4 million prescription pads had been stolen from area hospitals in the three years previous, for the purpose of obtaining prescription drugs for illegal sale. In February of this year, the Manhattan DA’s office slapped charges on a ring of criminals operating out of a gang-controlled Bronx clinic that had falsely prescribed at least 5 million painkillers for profit. The National Institute of Drug Abuse released astounding prescription drug statistics back in May of this year, including that 100 Americans die per day from the stuff. In July, the Centers for Disease Control said more specifically that opioid painkillers kill someone every hour.

In the case of non-controlled substances, an elaborate fraud scheme was concocted with paper prescriptions, so that crooked pharmacists could reap Medicaid funds for coveted prescriptions. Some medicines, like HIV drugs, are very expensive, as most them are under brand names. Crooks saw this as a lucrative opportunity—unscrupulous pharmacies would buy the prescription paper from patients that had it, say for $100, then use the prescription to bill the Medicaid program for a few thousand dollars, and never dispense the drug. This not only defrauds the state out of thousands of dollars, but also deprives the patient who needs the drugs.

Though the office of the New York State Attorney General is reluctant to put a dollar figure on the amount of fraud, the office likes to single out the Bronx-based Benizio ring, which they say defrauded that state out of hundreds of thousands of dollars.

A closer look at the updated law shows there are provisions of exemption for both “economic hardship” and “ technological limitations that are not reasonably within the control of the practitioner.” But these must be proven under a signed and sworn statement and judged reasonable by the DOH. Veterinarians may continue prescribing the old-fashioned way, without exemption, as can prescriptions to be filled out of state.

“No one has really made a case yet that they can’t afford it,” New York State Senator Kemp Hannon said. Hannon has long been an outspoken opponent of prescription drug abuse for years, in 2012 notably helping to outline the prescription drug crisis in the state. “There are a few physicians who so rarely prescribe that I’m sure there’s a safety valve for it—mainly psychiatrists who say they only prescribe once a year or never prescribe so shouldn’t be subject to the law. About 50 doctors asked for an exemption under I-STOP and about half of those were granted.”

Carmen Catizone, Executive Director for the National Association of Boards of Pharmacies, had an equally cutthroat attitude to the practices that could not assimilate.

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“It’s a question we face all the time, when we put in a new requirement,” Catizone said. “And the state of New York has looked at it, and it actually enhances patient safety. Then they have to make a decision to say, if a practice can’t meet a certain level of care that’s in the best interest of the patient, should that practice be in business? Why should that practice be allowed to exempt out from that standard?”

What’s more, the Federal Department of Health and Human Services offers “implementation grants” to applicants, in some cases “to adopt and utilize health information technology in medically underserved communities,” according to the law.

The New York State Department of Health could not be reach for comment.