Healthcare Fraud: Auditing and Detection Guide, 2nd Edition

Product Market Activity

PMA is identifying the products that are used throughout the primary healthcare continuum (P-HCC). Products include software tools to enhance care, in addition to tools used during the delivery of care. The major expenditure categories for auditors and investigators include durable medical equipment, supplies, and medications. A classic PMA example is a case involving the use of 340 B drugs. In 1992, the Veterans Health Care Act included a section referred to as “Section 340 B of U.S. Public Law 102–585.” In essence, what this does is provide access, for covered entities, to a significant savings on pharmaceuticals by providers who participate in the program.

Some providers have found an opportunity to exploit this program by obtaining discounted drugs and then reselling them for a profit. A data sample may include a rheumatologist receiving a significant amount of cancer drugs through this program. Exhibit 13.1 incorporates the concept discussed so far in this book. Any audit or investigation will begin by taking the appropriate business flow pipeline. In this case, we are looking at a provider. Since we are talking about a medication, the line begins with the manufacturer. The manufacturer is providing 340 B drugs through the appropriate channels. Parties such as distributors may exist between the manufacturer and the provider. Regardless, the general concepts are covered in Exhibit 13.1.

Exhibit 13.1 Product Market Activity

Source: Medical Business Associates, ...