NY Bust: Medicaid Patients’ Rx Drugs Go to Dealers

Fox News, December 5, 2010

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Johnson [Ethel Johnson, a 60-year-old Buffalo woman] is among 33 people charged so far in a large-scale investigation that has opened a window into an emerging class of suppliers in the illicit drug trade: medical patients, including many who rely on the publicly funded Medicaid program to pay for their appointments and prescriptions. She has pleaded not guilty.

For the first time, the Buffalo investigators devoted the kinds of resources normally aimed at street drugs like heroin or crack–wiretaps, buys, surveillance and cross-agency cooperation to trace the drugs from pharmacy to street. Even they were taken aback by the burgeoning market for the kinds of pills found in medicine cabinets in typical American homes.

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Often at no charge, the patients see a doctor, or several doctors, and come away with prescriptions for narcotic OxyContin and other pills they then sell to a dealer for as much as $1,000. If they are on Medicaid, the program is billed about $1,060 for a typical 60-pill, 80-mg prescription, along with the $23-to-$39 cost of the doctor’s visit.

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A report last year by the Government Accountability Office estimated that 65,000 Medicaid beneficiaries in New York and four other states had visited six or more doctors in fiscal 2006 and 2007 to acquire duplicate prescriptions for controlled substances.

The cost to Medicaid was $63 million for the drugs alone, excluding doctors’ exams. The report examined Medicaid abuse in New York, California, Illinois, North Carolina and Texas, high-volume states in Medicaid prescription drug payments.

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Dealers “don’t have to get their money together, smuggle or reach out to connections in Mexico or anything,” said Tomaszewski, who helped oversee the Buffalo crackdown before becoming the city’s deputy police commissioner. “They were clever enough to find the sources of supply were in their own neighborhood.”

After buying the pills from patients, dealers resell them for an average of $1 a milligram, investigators say. With a single 80-mg OxyContin selling for $80, the 90-count bottle of pills McCall allegedly paid $1,000 or less for was worth $7,200 on the street. {snip}

After OxyContin was introduced in 1996, it quickly became the top prescribed painkiller in the nation, and among the most abused. {snip}

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McCall, Johnson and their co-defendants are charged with possessing and distributing oxycodone and hydrocodone, two of the most commonly prescribed and commonly abused opiate pain medications, but authorities say various sedatives and stimulants changed hands, too.

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