ACFE Insights Blog

Investigating Fraud in Patient Assistance Programs (PAPs)

Patient Assistance Programs (PAPs) provide free or low-cost medications to eligible patients who cannot afford them. Despite regulatory oversight, instances of PAP fraud have been reported globally.

By Anuj Choudhary, CFE April 2023 Duration: 3-minute read
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Patient Assistance Programs (PAPs) provide free or low-cost medications to eligible patients who cannot afford them. Despite regulatory oversight, instances of PAP fraud have been reported globally.

Recently, our team was approached by a multinational pharmaceutical company in India to investigate allegations of PAP fraud. Our task was to identify any irregularities or fraudulent activities in the company's PAP program and provide recommendations to improve the program's integrity.

The pharmaceutical company under investigation is a global player in the healthcare industry with a presence in over 100 countries. The company's PAP program is a crucial component of the company's corporate social responsibility, and any irregularities or fraudulent activities could tarnish the company's reputation.

We started our review by scoping the entire project, which included a thorough review of company's PAP policies and procedures to gain a comprehensive understanding of the program's operations. We conducted interviews with sample program administrators, healthcare providers and patients to identify any areas of concern. Then we thoroughly reviewed contracts and conducted a holistic process walkthrough to understand each phase of a transaction. We used forensic tools, such as data analytics, to review the access control data of ERP and shared folder data, billing / supplies data, data relating to spends etc., to identify any irregularities in the program's operations and provide the company with the insights and recommendations thereby.

Our investigation focused on 10 key areas, including eligibility criteria, patient enrolment process, drug dispensation, financial transactions and compliance with regulatory requirements. We began our investigation by gathering all the relevant documents, including the PAP policies, contracts and communication records between the company and healthcare professionals. We then conducted interviews with several key personnel involved in the PAP process, including the PAP coordinators, marketing team members and healthcare professionals who had received PAP benefits. During the interviews, we asked specific questions to understand the PAP process and any potential discrepancies. We also analyzed the financial transactions related to PAP benefits and cross-checked them with the company's financial records. We used forensic tools to identify any suspicious transactions or anomalies. The procedures we performed helped us identify multiple instances of PAP fraud and provided us with evidence to back up our findings.

Our investigation revealed several irregularities in the company's PAP program, such as:

  • PAP funds were being used as incentive to influence the prescribing habits of healthcare providers.
  • PAP funds were being misused to influence government officials and healthcare regulators.
  • The PAP program did not have a tracking system to monitor the outcomes of financial assistance provided to patients, so the program had no way of assessing whether financial assistance was reaching the intended beneficiaries or whether it was having a positive impact on their health outcomes.
  • The PAP program did not monitor whether the beneficiaries were requiring the assistance anymore, i.e., if the patient had passed away or if the patient had recovered from the ailment prompting assistance.
  • Eligibility for the PAP program was not clearly defined. As a result, some ineligible patients were enrolled in the program, and some eligible patients were excluded. Further, this also created confusion among patients and healthcare providers.
  • The application process for the program was incomplete and did not include all the necessary documentation, which caused delays in processing.
  • The company's IT systems were vulnerable to fraud. The absence of adequate security measures made the systems susceptible to hacking and data breaches.
  • The program was poorly administered with inadequate staffing and training for program administrators.

Our investigation highlights the importance of maintaining the integrity of PAP programs. PAPs are essential resources for patients who cannot afford their medications, and any fraudulent activities can deprive eligible patients of this vital service. Our forensic approach, which included data analytics and financial audits, enabled us to identify irregularities in the company's PAP program and provide recommendations to improve its integrity.

Our Learnings from the above case:

  • PAP programs aid patients unable to afford medication, but global fraud cases have arisen.
  • To identify irregularities and fraud, review policies, conduct walkthroughs, conduct interviews and use forensic tools like data analytics.
  • Assess PAP program integrity by investigating eligibility criteria, patient enrolment, drug dispensation, financial transactions and regulatory compliance.
  • PAP fraud deprives eligible patients and underscores the need for forensic investigations to prevent fraud and maintain program integrity.