NY bust: Medicaid patients' Rx drugs go to dealers

[December 06, 2010]  BUFFALO, N.Y. (AP) -- Ethel Johnson couldn't get her prescription for pain medication filled fast enough. The 60-year-old Buffalo woman was hurting -- but investigators say that wasn't the reason for the rush.

According to secretly recorded telephone conversations, the sooner Johnson could pick up her pills, the more quickly she could sell them to her dealer. Her pain pills were destined for the street.

Johnson 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.

"I have to admit we were sort of surprised at how big this had become," said Charles Tomaszewski, former supervisor of the DEA office. "The suburbs, the city, there was no area that wasn't touched by this."

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.

"These patients, in essence, become the source for the drugs," said Dale Kasprzyk, acting head of the Drug Enforcement Administration in Buffalo.

"This is a lucrative underground business for people," he said.

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.

OxyContin, a time-release formulation of oxycodone, packs 12 hours' worth of pain relief into one tablet. It is especially prized by drug abusers, authorities say, because it can be crushed and ingested, snorted or injected for the full narcotic impact, a heroin-like rush.

The criminal cases brought in July by U.S. Attorney William Hochul's office in Buffalo illustrate how patients are coached about which doctors to see and what to say when they get there. Prosecutors, in November court filings, said plea agreements are being negotiated.

"Tell him, you know, you know you've been in a lot of pain, your throat is complaining. And then, you know, even throw a little of that stress on about your baby," alleged Buffalo kingpin Michael McCall instructs a 40-year-old patient-supplier in a conversation recorded by investigators.

"You need to tell doctor you need to go up to 90 (pills) 'cause ... you've been taking three a day and you ran out earlier," he says.

When another patient, a 60-year-old woman, tells McCall a doctor is insisting on a urine test to be sure she's taking the prescribed medication, McCall responds: "You want some?" and offers to bring the urine to her home.

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. Authorities say he would meet his suppliers in pharmacy parking lots or pick up the pills at their homes -- even getting some patients' prescriptions filled himself, signing for them at the pharmacy.

After OxyContin was introduced in 1996, it quickly became the top-prescribed painkiller in the nation, and among the most abused. The Food and Drug Administration in April approved a new version of the painkiller with a coating designed to make the drug harder to crush and snort or inject. States have cracked down, as well, with New York and others adopting tamperproof prescription pads.

To curtail abuse by Medicaid patients, several states, including Alaska, Florida, Maine, Ohio, South Carolina and West Virginia, require state approval before OxyContin prescriptions are filled, according to the National Conference of State Legislatures.

The New York Office of Medicaid Inspector General restricts recipients to coverage for a single doctor and single pharmacy if doctor-shopping is suspected, spokeswoman Wanda Fischer said. Nearly 10,000 New York recipients are currently on restricted status, she said.

"We're not allowed to drop them from the Medicaid program unless we prove a crime has happened," Fischer said.

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.

McCall also is charged with operating a continuing criminal enterprise for allegedly managing a stable of more than 20 patient-suppliers -- many of them men and women in their 50s and 60s and covered by Medicaid -- whose prescriptions investigators said he would buy and then distribute to a well-organized network of sellers.

Johnson declined an interview request following her arrest and her attorney, Robert Goldstein, declined to discuss the case. McCall's attorney also declined comment.

The DEA does not keep track of how many defendants in drug cases are Medicaid recipients, a national spokeswoman said.

"In the (Buffalo) group, there were people who we believe had medical problems who either sold a portion of their drugs or all of them," Kasprzyk said, "and there are some we believe did not have medical issues but duped the doctors."

At age 60 and making the rounds in a white 2007 Cadillac Escalade, McCall was less intimidating to those he dealt with than street drug dealers, who tend to fit a younger, more violent profile.

"He would appeal to the older crowd, he would talk with them," Kasprzyk said. "He did what he had to do to develop a relationship with people and keep them coming back."

[Associated Press; By CAROLYN THOMPSON]

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.