How Medicaid Funds and Fuels the Opioid Epidemic

Via The Daily Bell

It is taken as a fact that Medicaid helps in the fight against opioid addiction.

A recent Senate committee report pointed out that prominent publications like the New York Times say:

Public appreciation for the program [Medicaid] has steadily increased as people come to understand its importance in the health care system, including its central role in combating the opioid epidemic.

This “fact” took a central role in defending Medicaid funding in Obamacare during last year’s attempts to repeal the law.

The only problem is that this fact isn’t true.

The Senate report is entitled: Drugs for Dollars: How Medicaid Helps Fuel the Opioid Epidemic.

The Majority Staff of the Committee on Homeland Security and Governmental Affairs released the report on January 17 of this year.

The information adds to the evidence of corruption in the distribution of opioid painkillers as well as opioids prescribed to combat addiction.

Far from helping in recovery, government funds are used by criminals to profit from and exacerbate the epidemic.

Government Fuels the Opioid Crisis

We have discussed the role that the drug war had on increasing heroin addiction and deathsAnd we have touched on the FDA’s relationship with drugs companies which fuels opioid sales and suppresses alternative recoveries.

But the Senate report shows that government funds are also used directly to fuel the crisis.

Medicaid provides an incentive for doctors to overprescribe, and for patients to overuse prescription opioids. This is based on the pay structure, and nature of “free” pills.

But people on Medicaid are financially strapped. So even if their original intentions for getting pain pills were pure, the cheap drugs present an opportunity that is hard to ignore.

For dangerous opioids such as oxycodone, Medicaid co-pays can run as low as $1 for as many as 240 pills—pills that can be sold for up to $4,000 on the street

Directly, doctors and patients commit fraud to obtain pills that can then be resold.

This report highlights nearly 300 criminal cases involving at least 1,072 defendants in which people have been convicted or charged of abusing Medicaid to obtain or sell opioids…

In one Connecticut case, a ringleader recruited Medicaid beneficiaries to obtain nearly $200,000 of oxycodone from pharmacies through forged prescriptions….  Pharmacists “were very trusting just because it was Medicaid,” said the lieutenant, who added: “Absolutely, Medicaid is what allowed him to make so much money.”

…a Louisiana doctor convicted of overprescribing painkillers in a scheme to bilk Medicaid was caught on tape threatening to kill the federal agents investigating him. “They won’t even be able to have an open casket funeral,” court documents quote him as saying.

While correlation is not causation, the report does note that drug overdose deaths are rising at a faster pace since Medicaid expansion during the Obama years. And more money is spent through Medicaid on opioid-related hospital stays than through private insurers. The difference became even more pronounced after Medicaid expansion.

States with the largest expansion of Medicaid also saw the highest increase in opioid overdose deaths.

In 2015, according to CDC figures, the five states with the highest rate of overdose deaths were all expansion states: West Virginia; New Hampshire; Kentucky; Ohio and Rhode Island. As the CDC points out: “Opioids—prescription and illicit—are the main driver of drug overdose deaths.”

In Kentucky, for instance, “the expansion of Medicaid through the Affordable Care Act increased the percentage of Clay County residents with Medicaid and gave more of them access to free prescription drugs, including pain pills.” With about 60 percent of county residents now on Medicaid—up from 35 percent in just three years—use of oxycodone has risen while the waiting list for the local inpatient drug treatment facility has grown more than 50 percent.

And the opioid industry is not done making money once people go into treatment. Opioids are also prescribed to treat opioid addiction!

Suboxone and methadone are opioids which supposedly ween people off of their other opioid addictions. But as we pointed out in a previous article, methadone accounts for thousands of opioid deaths per year. And suboxone has a sketchy history in the U.S. with the government helping to fund FDA approval. The suboxone drug Buprenorphine was developed and distributed by people in and out of the revolving door of politics and pharmaceuticals.

But the money making only trickles down from there. Individual doctors also routinely defraud Medicaid to get in on the action. They run pill distribution operations catering to Medicaid users.

David Russo, a Maryland pharmacist, admitted in federal court that he improperly billed
Medicaid for hundreds of thousands of illicit prescriptions for opioids, defrauding the program out of at least $90,000…

In a relatively short time, Russo became one of “the largest dispensers of [oxycodone and methadone] in the entire State of Maryland” before law enforcement caught on to his scheme.

Another case:

On July 22, 2016, the Department of Justice charged Philip Esformes, Odette Barcha, and Arnaldo Carmouze with conspiracy, money laundering, and health care fraud in connection with a $1 billion scheme involving numerous Miami-based health care providers…

In court documents, prosecutors accuse Esformes of participating in kickbacks with
corrupt medical professionals that included “high-end escorts” being flown to Orlando
and “chauffeured in limousines for liaisons with Esformes at the Ritz-Carlton Hotel.”

The scheme allegedly fueled an extravagant lifestyle for Esformes, who drove a $1.6
million Ferrari.

The report cites 100 case studies which allege Medicaid fraud with tax dollars funding opioid abuse. The schemes pumped opioids into communities and got doctors and pill pushers rich in the process.

And from there, the profits trickle down to the heroin industry, where addicts turn when prescription opioids become too expensive.

Does one-third of America really have conditions that warrant prescription opioids?

The report claims 97.5 million Americans over the age of twelve use prescription pain relief.

As usual, all the signs point to monied interests in the pharmaceutical industry inflating their profits through government programs. If they can expand Medicaid, they can expand the distribution of their product. Their product just so happens to destroy families and leave mountains of death in its wake.

Do you think that was the plan all along, to fund pharmaceutical companies by expanding Medicaid? Or do you think this is an example of unintended consequences from well-meaning politicians?

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lasvegaspersona peippe Sat, 02/17/2018 - 22:16 Permalink

The opioid epidemic is hysteria. How many deaths have been caused by oral opioids used properly....I've seen ZERO in my 45 years as a physician. The government has rolled heroin and illegal fentanyl deaths into the same stats as legitimate prescription drugs. The result is the people with real chronic pain are being shut out of getting valid needs filled.

The government quotes 60,000 deaths in 2015 but never breaks the numbers down. If you eliminate illegal drugs, suicides, careless recreational use and drugs  combined  with heavy alcohol get zero as the number...they never give out any number but the 60,000 figure. It is either stupidity, guilt about failure to control illegal drugs or some other unknown motive. I favor stupidity as it is so common.

In reply to by peippe

lew1024 lasvegaspersona Sun, 02/18/2018 - 16:25 Permalink

Not that simple, I think, as Pakistani 1/4 and 1/2 strength opioid substitutes are in the VA and at least least on pharmacy chain.

A VA patient can get full strength with one refill and 1/4 strength the next. That guarantees overdoses.

Fentanyl is one cause, but as you say, without statistics, we don't know much. Why no statistics?

Our government has not take a single intelligent step to deal with this problem because our politicians make so much $ from the illegal drugs. Our political system is corrupt to the core, Democratic and Republican, Bushes, Obama and the Clintons, there ain't no diff.


In reply to by lasvegaspersona

Jung peippe Sat, 02/17/2018 - 23:15 Permalink

It looks like a third of the US population is on prescription drugs, so a lot of "junkies". Oxycodone is highly addictive and they prescribe it because BigPharma likes its profits.

Add to this the 13.000 gun fire murders per year and the killing spree continues (9/11 was minuscule compared to these deaths).

In reply to by peippe

Amy G. Dala Jung Sun, 02/18/2018 - 11:33 Permalink

Da niggaz poppin caps on the southside and junkies on oxy, little different from 9/11.

Yer govt requires docs, hospitals, ERs to assess and treat pain at every patient encounter if they take govt dollars, i.e., medicaid.  REQUIRES. 

For whatever reason tho, I do not see as many drug seekers as I used to.

In reply to by Jung

Sudden Debt Sat, 02/17/2018 - 15:28 Permalink

One in 3...

Americans need to be reconditioned.

It also means that at least 1 in 3 is a basket case with as many excuses for using painkillers as they have braincells.

It also makes you wonder how America still manages to function at all with such a drag on the system...


chunga Sudden Debt Sat, 02/17/2018 - 16:22 Permalink

US gov causes a lot of problems. The ravishing Mrs. chunga is a medical pro and I heard her talking to one of her colleagues about this. There are new rules that in certain instances take away her discretion to give out these meds "as needed". So the result is some people don't get any and others get too much. The term she used for that was "plowed".

In reply to by Sudden Debt

Vilfredo Pareto chunga Sat, 02/17/2018 - 17:24 Permalink

I have seen that too.   It is insane.


I had a patient tell me her doctor almost kicked her out of the pain clinic because she tested negative for opiates.  She told the doctor she doesn't necessarily take them every day.  However a negative drug test in a pain clinic freaks the doctor out because he thinks the feds will come in and bust him for diversion.  He told her she had to have a dirty drug screen each time she came in and that "if I write for you to take morphine three times per day then you must take it three times per day every day"


It wouldn't surprise me that some of these "plowed" people you wife describes are now dying at slightly higher rates than before as the pain doctor tries to protect himself from the law 

In reply to by chunga

chiaroscuro chunga Sat, 02/17/2018 - 19:38 Permalink

A big part of the problem is the cultural belief that no one deserves to be in pain, either physically or emotionally. It's irrelevant whether or not you deserve your pain. It just is. But people don't like to think that way. They think they are entitled to a pain free existence. And healthcare professionals have been trained that "pain is the fifth vital sign" which must be asked about in every patient and treatment offered if reported. 

In reply to by chunga

lasvegaspersona chiaroscuro Sat, 02/17/2018 - 22:21 Permalink

Treatment of pain is one of the main things we doctors do. If there is no other effective treatment then pain meds are usually the best answer. Sure you can treat inflamatory arthritis but degenerative really has no effective treatment for most patients. Back pain is common and causes a lot of limitations. Some people want and need relief. Others fear addiction and decline all meds. Either choice is valid...IF the patient is the one making the decision.

In reply to by chiaroscuro

chiaroscuro lasvegaspersona Sun, 02/18/2018 - 00:29 Permalink

Free will is a particularly complex issue in the doctor-patient relationship, since it involves the free will of two people. Naturally the patient should always have a right to refuse treatment. But does a patient have an absolute right to demand treatment? I would argue no, because to allow this demand would violate the free will of the physician. 

While physicians are generally expected to care for the patients they see, a physician may also legally and ethically decline to treat a patient for a number of reasons. For one thing, a patient may try to persuade a physician to provide a treatment outside the physician’s scope of practice or training. In that case the physician may refuse to participate in the patient’s request because they believe that doing so would be unsafe and unreasonable. A patient may also ask a physician to do something the doctor personally believes to be unethical, such as performing an abortion or participating in physician assisted suicide. I also don’t believe that patients have a right to demand that a doctor see them for free, unless the doctor has agreed to do so, since that expectation effectively enslaves the doctor. 

Most people don’t want to be in pain. And most people, especially those who pursue careers in healthcare because they want to help others, don’t like seeing patients in pain. But what do you do when excess empathy is enabling an epidemic? In my opinion, it’s time to reconsider our cultural attitudes about pain. And I think that if a physician is tired of the sinking feeling that they are doing more harm than good by prescribing opioids for patients with chronic pain they have every right to refuse to do so. 

In reply to by lasvegaspersona

MoralsAreEssential Sudden Debt Sat, 02/17/2018 - 20:35 Permalink

I have seen it at my local Costco and other retail stores.  People that look and sound middleclass picking up maybe an after retirement job, but behave in a "numbed" manner.  This one guy repeatedly x 3 put my stuff in with the person's stuff ahead of me.  I redirected 3 times and he just looked dazed. 

In reply to by Sudden Debt

hooligan2009 Sat, 02/17/2018 - 16:00 Permalink

does this mean that one in three politicians are also addicts? what are the bahioral changes opiod addiction brings about? is this why mccain, green and the witches cabal could be taking drugs? what about the federal reserve board, bankers, lawyers, police, teachers?

one in three? holy shit.

Vilfredo Pareto Sat, 02/17/2018 - 17:17 Permalink

Lol.   Medicaid in my state started naively paying for adult ADHD meds after the FDA approved meds for adult ADHD and made it a real thing.


Of course prescriptions for amphetamine shot through the stratosphere and they finally quit paying for it.  In my state for the most part medicaid equals single mom or drug addict (male or female) lol .  

Milton Keynes Sat, 02/17/2018 - 17:21 Permalink

They'd be mainlining Heroin if they had no access to RoXy/Oxy/et al.


Most of what we call the Opiod Epidemic is now Fentanyl/Carfentanil.   


They got hooked on Oxy, but they swapped to Fentanil when they got cutoff.

Hikikomori Sun, 02/18/2018 - 09:59 Permalink

The Veterans Administration has played a huge role in the overprescription of addictive drugs.

Also - there is no such thing as "free prescription drugs".  "Free" when applied to medicine really means "someone else pays".

Xena fobe Hikikomori Sun, 02/18/2018 - 14:06 Permalink

Well what do you suggest VA doctors do for veterans were injured and in pain? 

The VA saved my Dad's quality of life by prescribing him opiates when no one would.  He never abused them.  Without them, he would have been forced into a skilled nursing place.  

The only alternative I am aware of is ibuprofen which is not to be taken for extended periods.  


In reply to by Hikikomori

Bemused Observer Sun, 02/18/2018 - 12:23 Permalink



Opioids are NOT causing the current problems. These drugs are NOT 'opioids', they are artificial hyper-potent Franken-drugs...lab creations BASED on natural opioids. They are thousands of times more potent than ANY natural opiate, and are also filled with other chemicals as well.

Normal opiates are a Godsend to people in pain, both acute and chronic. And THESE are the people being harmed by this phony drug war, NOT the addicts or pushers.


Stop conflating the two! Call these drugs what they ARE...Franken-drugs. Get THEM off the market, and the deaths will stop. You'll still have some addicts, because you ALWAYS have addicts, but the spike in deaths will end.

And good luck with that, because apparently both the drug makers and their political friends have NOT yet learned, and are STILL trying to address the 'opiate crisis' while allowing Big Pharma to continue to market these poisons. They are just too lucrative to give up, and they are trying to figure out how they can keep selling them under patent. They can never end opiates, they are too effective and inexpensive. What they are shooting for is a situation where the only opiates you can get are the ones THEY make, the ones THEY patent. Ideally, they'll 'addict' you without the psychoactive (and most of the pain-reducing) effects. The shit won't work, but once you start, you'll have to keep taking it for life. Since the 'addiction' doesn't come with any of the feel-good effects, it will be considered acceptable...


Xena fobe Sun, 02/18/2018 - 13:59 Permalink

The so called opiate epidemic is a result of govt interference between patient and doctor.  Opiates should be available OTC like any other pain reliever.


Xena fobe Sun, 02/18/2018 - 14:18 Permalink

How to solve the "opiate problem":  Give an elephant sized dose of fentanyl to everyone who thinks they know better what a pain sufferer needs than the patient himself.  Voila, no more problem.   

naro Sun, 02/18/2018 - 17:29 Permalink

The PROBLEM IS MEDICARE PART D.   This is where all the drug abuse really started because Medicare part D REQUIRED MEDICARE to pay whatever the drug company ask for in price of approved drugs.  It forbade price negotiation or importation. So once cheap drugs became suddenly 10 to 100 times more expensive, and entrepreneurs took cheap pain pills, re-labeled them and sold them essentially to the government for extraordinary high prices.  So the drug makers got rich fast, the patients got hooked fast, and the doctors made a killing.........and all paid for by the taxpayers via Medicare.