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How the OPP and OHIP worked together to catch a fraudulent pharmacist

This article is written as a summary of a lecture presented at the 2012 Canadian Health Care Anti-Fraud Conference in Niagara Falls, Ontario.


From Inspection (ODB) to Investigation (OPP)


Cathy O’Connor: Detective Sergeant, Ontario Provincial Police
Edward Wong: Ontario Ministry of Health and Long-Term Care, ODB Division
Brigitte Brousseau: Detective Constable, Ontario Provincial Police FROM inspection (ODB) to investigation (OPP)

Detectives from the OPP presented a case study of how an Ontario Drug Benefit (ODB) audit of a pharmacy detected fraud. The auditor from the Ministry of Health then worked with OPP to investigate and catch the criminal.

Edward Wong, Auditor of the Ontario Ministry of Health and Long-Term Care, ODB Division, added the following pieces of information:

  • 60% to 80% of pharmacy claims at any given pharmacy are paid through the ODB.
  • Pharmacies submit 1000 drugs in 2 years on average to ODB.
  • The ODB audits 25 drugs which account for top 25% of ODB drug spend.
  • 10 pharmacies have been terminated in 2012 for fraudulent activity. Out of 3500 pharmacies, that’s 0.2%.
  • The province of Ontario has $600 to spend per person on health care
  • Biggest areas for OHIP fraud are false pharmacy claims, x-rays, ultrasounds, labs and independent health facilities (hearing aids, assisted devices, etc.)

Examples of pharmacy fraud in Ontario

  • Blood glucose test strips submitted so that the patient would be testing 20 times a day. What is reasonable is for a diabetic to test 3-5 times per day. Twenty tests per day translates into10,000 test strips taken in a 1 year period. Sometimes it’s not for them – they might not even have diabetes. It’s for their family overseas.
  • Fraudulent pharmacies have patterns where they dispense more frequently than needed: 1 package every 2 days instead of 1 package every 1 month.
  • Pharmacists would submit claims for test strips or drugs that were discontinued from manufacturer for the past 2 years
  • They would submit claims for patients after date of death
  • They would completely fabricated claims – fake prescriptions from certificates in their system
  • Continue to submit claims after the MD discontinued the prescription
  • They sometimes used to dispense a generic drug even though it was written “no substitution” on the script for the brand, just because they’d get a kickback from the manufacturer if they sold a high volume of generic drugs. This has been made illegal in Ontario as of 2010.

Excuses from pharmacy technicians given to an ODB auditor

  • “Sorry! The computer automatically refilled the script.”
  • “Times are tough for me.”

How an ODB auditor detects fraud at a pharmacy

  • First, an ODB auditor red flags a pharmacy due to unusual billing practices.
  • If a pharmacy billed $2.5 million in one year, it’s a red flag, since the average pharmacy bills $1 million per year.
  • They’d look to see why it’s so high – is it in a high traffic location?
  • Cholesterol medications are higher priced and therefore more fraudulent activity occurs in that area.
  • The auditor selects a sample of billing (say, $100,000) and goes into the pharmacy and asks to see invoices or receipts from that sale. “You can’t sell what you can’t prove you bought.”
  • Every medication should have a receipt from the drug wholesaler where the pharmacist originally purchased it.
  • If there is no receipt, or if the invoice is lacking information, that is a red flag that there were fake claims.
  • If an invoice is produced, the OPP asks the wholesaler to see if they can produce the same invoice. If not, it’s fraud.
  • At that point, the ODB auditor passes the file onto an OPP detective.

How an OPP Detective pursues a fraudulent pharmacy

  • The OPP officer would first conduct surveillance on-site: observe how many people walk in and out to get a sense of average customer volume.
  • They would walk in and see if any licenses are on the walls.
  • Once it’s clear that fraud is being committed, the officer requests a search warrant based.
  • Usually, as soon as a search warrant is produced, pharmacists sell their business immediately – usually for three times what it’s worth because it’s based on false sales. They usually leave the country and the new owner is left with a civil suit on their hands.
  • If they don’t flee, they usually admit guilt and come into the police station instead of being arrested in their store.
  • A judge would decide how much of a penalty to give. In one situation, the pharmacist was stripped of her license for just 1 year and subject to house arrest with a curfew. After one year, she could practice again. She was given a light sentence because of the circumstances: she has a daughter who is living with a life-threatening disease, so her family’s expenses were extremely high and she became desperate. On the other hand, the family chose to live in an upper class area and drive expensive cars, so they weren’t living under the poverty line.
  • There is always a choice to be made, and the family made one to drive expensive cars and defraud the government.

Unfortunately, judges do not see these cases as a priority, and will have the criminal pay back restitution (reimburse the government for what they stole) in lieu of jail time.