Proprietary and Confidential Intellectual Property of Castlestone Advisors LLC © 2015

Preventing Doctor Shopping and Opioid AbuseA special case of Fraud, Waste and Abuse in Health Care

May 28, 2015

With the increased attention on opioid abuse many have called for material improvements in the Prescription Monitoring Programs (PDMPs)

Aims for PDMP’s include: Better Use and usability Real-time reporting Interoperability (across states)

Castlestone’s uses electronic health cards and location verification to: Collect information about prescriptions as they are being filled in real time

Without this enterprising doctor shoppers can visit many pharmacists and fill many prescriptions before PMP records catch up

Collect information about prescriptions as they are written, also in real time Enterprising doctor shoppers can visit many doctors and acquire many prescriptions before

PMP records catch up. Stops pill mills and “rogue physicians and pharmacists” from writing/filling more

prescriptions than time and geography permit Use our native interstate capability to capture prescription and dispensing transactions

anywhere Feed any and all of this to PDMPs and state agencies Easy, simple card swipe, no new capital technology or software

2Proprietary and Confidential Intellectual Property of Castlestone Advisors LLC © 2015

With Castlestone - At the Doctor’s Office the patient, the doctor, the location, the transaction type and time are verified and captured with a simple card swipe

2. Data on Card ID, Terminal Owner, Terminal LocationMerchant Code, Transaction Code, Time Stamp

(via credit card network infrastructure)

1. . Patient and doctor swipe card

Doctor keys trans. code for Schedule II prescription

Castlestone runs rules against each swipe, in real time, e.g.:• Verifies the swipe terminal is in our

database of providers as a medical merchant code`

• Determines if card been reported lost or stolen or has restrictions

• Determines when/where card was most recently swiped elsewhere

• Determines if card holder already been issued a prescription for a Class II or Class III drug

3Proprietary and Confidential Intellectual Property of Castlestone Advisors LLC © 2015

Then, these data can be matched versus existing claim and prescription records looking for duplicates, multiples, matches

2. Data on Card ID, Terminal Owner, Terminal LocationMerchant Code, Transaction Code, Time Stamp

3. Claim Matching • Recipient name• HealthPlan ID• Provider ID• .

Health Insurer’s Analytics(Can include PMP analytics)

Card Swipe DetailsCard Number: 5424176022824317Name: Mitchell ClarkHealthPlan ID# 6789bProvider ID# 0077464Swipe Terminal ID9443C3002846

(registered to Dr. Byron Black)Date of Transaction:1/15/14Time of Transaction 10:06:23

Claim DetailsRecipient Name Mitchell ClarkName: Mitchell ClarkHealthPlan ID# 6789bProvider ID# 0077464Provider Name:Byron Black, MDDate of Service:1/15/14

1. . Patient and doctor swipe card

Doctor keys trans. code for Schedule II prescription

4. Notification of existing prescription stolen card,Or other flag; can be sent directly to PMP-defined screen, etc.

4Proprietary and Confidential Intellectual Property of Castlestone Advisors LLC © 2015

When referred, the doctor and/or the patient is contacted before the transaction is approved

2. Data on Card ID, Terminal Owner, Terminal LocationMerchant Code, Transaction Code, Time Stamp

3. Claim Matching • Verify terminal code• Verify medical merchant code• Lost or stolen card?• Previous time and location of swipe• Existing Rx for Class II drug?, etc.

4. Approve, Deny or Refer

5. On referral, verify before taking action, guide to counseling , or take other action as appropriate

Health Insurer’s Analytics(Can include PMP analytics)

1. . Patient and doctor swipe card

Doctor keys trans. code for Schedule II prescription

5Proprietary and Confidential Intellectual Property of Castlestone Advisors LLC © 2015

Card Swipe Details- Doctor’s Office

Card Number: 5424176022824317Name: Mitchell ClarkPlan ID# xxx-xx-6789Prescriber ID# 0077464Prescriber Name:Richard Howard, MDRx Date: 1/15/14Order Code: 11551

Claim Details Recipient Name Mitchell ClarkName: Mitchell ClarkHealthPlan ID# 6789bProvider ID# 0077464Provider Name:Byron Black, MDDate of Service:1/15/14

At the Pharmacy: Castlestone logs the prescription at the time it is written and verifies for the pharmacist prior to filling

Card Swipe Details- Pharmacist

Card Number: 5424176022824317Name: Mitchell ClarkPlan ID# xxx-xx-6789Supplier ID# 0088444Supplier Name:ABC Pharmacy, Trenton NJDate: 1/15/14Order Code: 11551

• Verifies doctor visit • Verifies prescription information• Verifies pharmacy• Attests that physician order came

from physician office• Location verification of pharmacy• Time of filling prescription• Blocks order after fill of proper

quantity (prevent alteration) • Blocks fill within time parameters

6Proprietary and Confidential Intellectual Property of Castlestone Advisors LLC © 2015

Castlestone implementations comply with standards for PDMP-EHR integration

PDMP Hub

EHR PDMP

EHR Standard:ASAP Web Services (preferred)HL7 v2NCPDP SCRIPT

PDMP Standard:PMIX-NIEM

Delivers findings directly to physician via EHR system Shares all transactions with PDMP

7Proprietary and Confidential Intellectual Property of Castlestone Advisors LLC © 2015

Cost and implementation considerations include:

Card Creation Castlestone creates/activates/deactivates and manages cards based on guidelines. Plan

Sponsor existing card manufacturing contracts can be used if they are compatible Hardware cost for plan & providers

NONE. Uses existing credit card terminals Network costs for plan & providers

NONE. Uses the existing credit card networks from provider offices for transactions Systems & programming costs

S&P is very simple data exchange of new/change/delete clients or full real time integration

Cost Structure Design and programming & card cost Hosting (data base & monthly hosting and management) Per transaction fees

8Proprietary and Confidential Intellectual Property of Castlestone Advisors LLC © 2015

Timeframe and typical results

Set up completely implemented in 60-75 days, depending upon client resources

All technical milestones (transaction capture, claim matching, file and interface implementation) exceed goals for speed and performance

ROI for fraud prevention is in the hundreds of percents Elimination and/or disabling of many false prescriptions, most notably intra-day

doctor shopping and intra-state frauds/mis-use Easier, more accurate access to PDMP information aiding diagnosis and medical

advice processes Reduction in rates of new addiction and the downstream medical, legal, social

and family costs Able to integrate with rehabilitation treatment plans Able to combine information from a similarly configured medical cannabis

enabled management process

9Proprietary and Confidential Intellectual Property of Castlestone Advisors LLC © 2015

Castlestone’s request of Health Departments and legislatures

1. Examine the service offering more closely in the context of the value of real-time, intra-state, location-verified processes

Develop hypotheses on the impact and value, tangible and intangible, to patients, providers and the community at large

2. Determine a community/market to test the hypotheses

3. Run and refine the test, run it again, implement widely as the case benefits become clear

10Proprietary and Confidential Intellectual Property of Castlestone Advisors LLC © 2015

Contacting Castlestone

Doug BrockwayBusiness Development – New EnglandCastlestone Advisors LLC(617) 834-0067dbrockway@advancecons.com

Jeff LestonPresidentCastlestone Advisors LLC(212) 874-4390Jeff@castlestone-llc.com

11Proprietary and Confidential Intellectual Property of Castlestone Advisors LLC © 2015

Other uses of Castlestone you may find of interest include:

Title LinkFraud Prevention for Health Insurers http://slidesha.re/1pCGh98

Doctor Shopping and Prevention http://slidesha.re/1nNb9OL

CMS Pilot/Test of VisitEye http://slidesha.re/1vlGGeU

Management Tech. for Therapeutic Cannabis http://slidesha.re/1nQ5JkD

Corporate Wellness http://slidesha.re/1qQf6Fi

12Proprietary and Confidential Intellectual Property of Castlestone Advisors LLC © 2015

Without location verification an array of fraud, waste and abuse goes undetected

SubmittedClaims

Payments

Data AnalyticsInvestigation,Compliance,

Enforcement & Prosecution

(Large cases only)

• Services not rendered• Misrepresentedo Date of serviceo Location of serviceo Provider of service

• Waiving of deductible or copayments

• Duplicate prescriptions• False or inappropriate

prescriptions• False or inappropriate

fulfillment and re-fills

• Billing for non-covered service

• Incorrect diagnosis & bundling

• Overutilization• Kickbacks and bribery

6.7% to 10% of Claims

Claim prep

& submit

Claim validation

& analysis

Outpatient Services• Clinic• Lab• Imaging• Physical

Therapy• Mental

Therapy• Home Care• Transport-

ation• Pharmacy

13

Top 10 healthcare fraud schemes: http://www.acfe.com/article.aspx?id=4294976280

Proprietary and Confidential Intellectual Property of Castlestone Advisors LLC © 2015

Castlestone’s location verification, real time & other analyses eliminate a great deal of fraud, waste & abuse

SubmittedClaims

Payments

HIGHLY FOCUSED Investigation,Compliance,

Enforcement & Prosecution

6.7% to 10% of Claims

Claim prep

& submit

Claim validation

& analysis

Outpatient Services• Clinic• Lab• Imaging• Physical

Therapy• Mental

Therapy• Home Care• Transport-

ation• Pharmacy

Patient & Provider

Location, time, date

• Only pay claims with real, i.e. swiped, patient and provider

• If claim data do not match swipe data, deny or refer claim

• Now, smaller, infrequent and one-off frauds are also stopped

Enhanced POS rules

Data Analytics

• Services not rendered• Misrepresentedo Date of serviceo Location of serviceo Provider of service

• Waiving of deductible or copayments

• Duplicate prescriptions• False or inappropriate

prescriptions• False or inappropriate

fulfillment and re-fills

• Billing for non-covered service

• Incorrect diagnosis & bundling

• Overutilization• Kickbacks and bribery

14Proprietary and Confidential Intellectual Property of Castlestone Advisors LLC © 2015

Outpatient process for wellness or rehabilitation:When the participant uses a wellness service

• Authorized provider & Location

• Service/procedure provided matches plan

• Time and date of service/procedure

We now have a record of:• A verified location for

each office visit• The time and date it of

the visit• Match of the

service/activity code to the program options

If there is no card, the provider office can register a new card for the patient on program portal

3) Castlestone compares swipe with the patient’s program

1) Provider swipes recipient card

2) Provider enters Service/Activity Code

• Patient ID• Prescribing Physician ID• Service Code• Service Location• Service Date

15Proprietary and Confidential Intellectual Property of Castlestone Advisors LLC © 2015

Using electronic health cards medical marijuana certifications are up-to-date and applied in real time

Eligibility Registration Treatment Management

Clinic

Patient• Provider Exam• Symptoms• Qualifying Condition

Care Giver• Background Check

Certification Criteria

HHS Registry• Patients• Caregivers• Clinics

• Renewals and on-going eligibilities

• Prevention of Shopping

• Doctors• Care Givers• Clinics

• Inventory• Reporting

• Inventory• Trends• Demographics• Outcomes

Purchase by Patient

Purchase by Care Giver

Med

ical

Mar

ijuan

a Pr

oces

s

Card swipes at certification and at sale record and verify

16Proprietary and Confidential Intellectual Property of Castlestone Advisors LLC © 2015