The FWA Front Desk-July 2026

Special Investigations Unit (SIU)
July 2026
Fraud in Focus: Invalid Controlled Substance Prescriptions

In June 2026, federal prosecutors announced that a New Jersey psychiatrist pleaded guilty to 17 felony counts related to issuing invalid prescriptions for controlled substances, including Adderall, Vyvanse, and Xanax. The physician admitted to prescribing these drugs outside the usual course of professional practice and without a legitimate medical purpose.

According to court records, the physician issued prescriptions to multiple patients despite significant warning signs, including known histories of substance abuse, overdose events, and information suggesting that some individuals intended to divert or resell the medications. Prosecutors alleged that the prescriptions were written with the intent of misleading pharmacies, insurers, government benefit programs, and other entities responsible for payment.

The physician further admitted that some prescriptions were issued despite repeated concerns from family members and others regarding patient misuse of controlled substances. In at least one instance, the conduct involved a conscious or reckless risk of death or serious bodily injury.

As part of the criminal proceedings, the physician surrendered his DEA registration and agreed to relinquish his licenses to practice medicine and psychiatry. Sentencing is scheduled for October 2026.

Source: Cape May County Psychiatrist Admits to 17 Felony Counts for Unlawful Controlled Substance Prescriptions Linked to Sexual Conduct, Risk of Death, and Serious Bodily Injury.

Understanding the Fraud
This case highlights the important role medical necessity and clinical judgment play in prescribing controlled substances.
Controlled medications such as stimulants, anti-anxiety medications, and certain pain treatments can be appropriate and beneficial when prescribed for legitimate medical purposes. However, when prescribing occurs outside accepted standards of care, the risks extend beyond inappropriate utilization and can directly impact patient safety.
Improper prescribing may contribute to:

• Drug misuse or dependency
• Diversion of medications to unauthorized individuals
• Increased risk of overdose or adverse events
• Improper payments by health plans and government healthcare programs

Key takeaway
Prescriptions must be supported by a legitimate medical purpose, appropriate documentation, and sound clinical decision-making. When those safeguards break down, both patient safety and program integrity are placed at risk.

Why This Matters to Our MAPD Plan
For Medicare Advantage Prescription Drug (MAPD) plans, oversight of controlled substance utilization remains an important component of fraud, waste, and abuse prevention.
CMS expects plans to maintain effective controls to identify potential issues involving:

• Prescribing patterns that fall outside expected norms
• Utilization inconsistent with medical necessity
• Potential drug diversion activities
• Risks involving opioids, stimulants, benzodiazepines, and other controlled substances

Cases such as this demonstrate how inappropriate prescribing can create risk across multiple areas, including member safety, pharmacy benefit expenditures, provider network integrity, and regulatory compliance. Even when concerns originate with an individual provider, the resulting financial and clinical impacts can extend across the healthcare system.

What This Could Look Like in Practice

Within a Medicare Advantage environment, prescribing concerns may not always be immediately apparent. Instead, risk often emerges through identifiable patterns and trends.
Examples may include:

• High volumes of controlled substance prescriptions compared to peers
• Long-term prescribing without documented clinical justification
• Multiple early refill requests or replacement prescriptions
• Beneficiaries obtaining similar medications from multiple providers
• Pharmacy claims activity that suggests potential diversion or misuse
• Complaints, grievances, or tips involving questionable prescribing practices

No single indicator necessarily confirms fraud or abuse. However, unusual prescribing or utilization patterns may warrant additional review to determine whether appropriate safeguards are in place.

How We Address This Risk
Our approach follows the core FWA principles of prevention, detection, and correction.

Preventive efforts include provider education, formulary controls, coverage requirements, and pharmacy benefit management safeguards designed to support safe and appropriate prescribing practices.

Detection activities may involve pharmacy analytics, utilization monitoring, review of complaints and grievances, provider oversight, and investigation of potential diversion or prescribing concerns.

When issues are identified, corrective actions may include provider outreach, medical record review, payment recovery, referral to regulatory agencies, implementation of utilization management controls, or other actions necessary to protect members and ensure compliance.

Final Thought
Prescription drug fraud is not always driven by organized criminal schemes. Sometimes it originates with inappropriate prescribing decisions that place members, providers, and healthcare programs at risk.

Maintaining strong oversight of controlled substance utilization helps protect member safety, supports responsible stewardship of healthcare resources, and reinforces our commitment to preventing fraud, waste, and abuse throughout the Medicare Advantage program.