The Opioid Crisis: Are RACs Helping?

The word “stoned” is a 1960s slang word meaning roughly “intoxicated on illegal drugs.” The United States currently has an opioid epidemic. It has grown quickly, and now is of huge proportions. For the second time in only a few months, two U.S. parents were arrested because police found them slumped over and passed out while an infant was strapped into the back seat of their vehicle screaming.

From 2000-2015, overdose deaths involving opioids have more than tripled, going from 3 to more than 10 per 100,000 persons in the United States. Ninety-One persons die every day, and the cost to taxpayers is around $75 billion in extra healthcare fees.

In the past five years, the number of deaths due to heroin has gone up around eightfold, from < 0.5 to 4 per 100,000 persons. In 2015, around 52,000 persons died due to drug overdoses. Death from other synthetic opioids (fentanyl, tramadol) is reaching the levels of death due to heroin, and increasing even more rapidly. In the past two years, the rise in deaths from synthetic opioids was more than 600 percent.

One rising favorite is carfentanil, which is a tranquilizer used for elephants. It is 1,000 times more powerful than heroin, and can kill just from being touched.

Providers write around 300,000,000 opioid prescriptions per year, but the population of the United States is only 319 million.

California recently introduced a bill that would tax prescription opioids to pay for drug rehabilitation of addicts. This is likely to amount to little more than placing a finger in the dike against this “killer tide.”

Drop Out and Get Stoned

Different theories explain the rise in abuse. Theory No. 1 is that the “doctors over-prescribe and get people addicted” angle. People are injured, they need painkillers, they get a prescription, then eventually they are unable to get a refill, so then they purchase illegal drugs. The answer seems to be stricter regulation of prescriptions and a crackdown on doctors.

Theory No. 2 is the simple financial argument. Illegal drugs are cheaper than prescription drugs, and you don’t need to get a prescription. Heroin is much cheaper than methadone. These days it takes about the price of a Starbucks Caffé Vanilla Frappuccino® Blended Coffee to “ride the white dragon” (more slang for taking heroin). As they say, “heroin is the strongest, fastest non-prescription pain reliever on the market.”

Theory No. 3 says the epidemic is a reflection of the collapse of the economy in the United States. This is the same thing that happened in Eastern Europe and the Soviet Union in the 1990s, when communism fell apart there. As with what happened in Eastern Europe, life expectancy in the United States is dropping. Medicaid plays a major role. Using Medicaid cards, patients can pay a $3 co-pay and get pills worth thousands of dollars, with the rest paid for by the taxpayer.

The numbers are staggering. It has been reported that 21 percent of all men between the ages of 25 and 55 (prime working age) are Medicaid beneficiaries. Fifty-seven percent of non-working white males (25-55 years old) are collecting disability benefits. They have dropped out of society. One-half of labor-force dropouts are taking pain medication every day of their lives.

So let’s summarize. The economy has disenfranchised millions of working-age persons. A large number no longer even bother to search for work, are depressed, and/or are getting disability benefits and taking painkillers paid for by taxpayers. And again, life expectancy is going down.

The Role of RACs

A crucial part of public health programs intended to combat the opioid epidemic involves treatment for addiction. And treatment involves regular testing of the patients to check their blood chemistry. This testing is done by the army of independent laboratories scattered across the United States. According to the National Independent Laboratory Association, there are around a quarter of a million testing labs in all.

Naturally, the Recovery Audit Contractors (RACs) are busy auditing as much as possible. One lab we at Barraclough have been working with is located in San Francisco. A small family business, it was started a number of years ago by the current owner when her brother died of an overdose. The lab does a number of tests, but mostly they focus on drug testing in support of methadone patients. They recently were audited by a RAC which, naturally, denied 100 percent of all the claims in its sample.

There was never any question of fraud. Fraud takes place when there is no test, or no real patient, or no real doctor, or even no real lab, and yet a bill is submitted to the government for payment. But even the RAC knows that was not the case in this audit. As in so many other similar audits, there are real patients with real medical problems, and real doctors, real prescriptions, and real tests completed, with real benefits delivered to the patients. There is absolutely no fraud.

So where is the problem? Why would a small lab have all of its testing claims since 2012 denied, and then have all of its continuing payments from Medicare held up, thus forcing it into a financial crisis leading probably to bankruptcy and the end of the business?

Seemingly, it is all about documentation. Not documentation supplied by the laboratory, but documentation supplied by the doctors. The documentation has been ruled to be inadequate.

There are two problems with this: First, the documentation should not be considered to be inadequate merely because the RAC has defined a set of standards that differ from accepted medical care protocol. What gives the RAC the power to rewrite medical protocol? Second, it is the testing laboratory that is being held to the risk of non-payment even though the documentation is completely out of their control and supplied by a third party. If the claim for testing filed to Medicare is denied, it is not the doctor who gets punished, it is the laboratory. But it is the doctor who is responsible for following the “proper” protocol. The testing laboratory is being held responsible for something that is completely beyond their control. And this is fair?

And this laboratory is only one of many that are getting hit by the RACs. There is no recourse, and many are being driven out of business. So here is a clear example of how over-zealous auditing by the RACs is ostensibly interfering with efforts to alleviate the opioid crisis. No testing means no effective medical rehabilitation.

We Need CMS to Adopt a “Right of Correction” and an Amnesty

Let’s step back a little. This auditing crisis going on across all parts of the healthcare establishment has gone on for too long. The entire system is clogged up, with an appeals process that is completely disassociated from the backlog. Many, many providers are being driven out of business. The RACs are continuing to profit.

The United States needs urgently to completely revise the RAC program. It is out of control and has produced a completely broken system. Here are two ideas to help fix things:

Amnesty: CMS should declare amnesty on all RAC denied claims that are pending. This would immediately eliminate the backlog and restore funding flows to providers that are being driven out of business. This should not apply to criminal investigations.

Right of correction: CMS should build into the administrative law a “right of correction.” This means that if claims are denied, then the provider should be given a reasonable amount of time to correct the documentation. In the case of the testing laboratories, they should be able to go back to the doctor and get a re-verification of the medical necessity of the tests. In cases of correction, a liberal and flexible standard should be employed, not the type of inflexible, strict, and ultimately unfair standards now being applied.

The healthcare system in the United States needs to be improved, and one way to make a vast improvement is to radically reduce the power and arbitrary nature of RAC audits. They have become abusive to the point that the public health of the United States is being threatened. What was once perhaps a good idea now has become a nightmare.


Edward M. Roche, PhD, JD

Edward Roche is the director of scientific intelligence for Barraclough NY, LLC. Mr. Roche is also a member of the California Bar. Prior to his career in health law, he served as the chief research officer of the Gartner Group, a leading ICT advisory firm. He was chief scientist of the Concours Group, both leading IT consulting and research organizations. Mr. Roche is a member of the RACmonitor editorial board as an investigative reporter and is a popular panelist on Monitor Mondays.

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