[Senate Hearing 115-441]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 115-441




                               before the

                              COMMITTEE ON
                          UNITED STATES SENATE


                             SECOND SESSION


                            JANUARY 17, 2018


         Available via the World Wide Web: http://www.fdsys.gov

                       Printed for the use of the
        Committee on Homeland Security and Governmental Affairs
31-264 PDF                 WASHINGTON : 2019                  


                    RON JOHNSON, Wisconsin, Chairman
JOHN McCAIN, Arizona                 CLAIRE McCASKILL, Missouri
ROB PORTMAN, Ohio                    THOMAS R. CARPER, Delaware
RAND PAUL, Kentucky                  HEIDI HEITKAMP, North Dakota
JAMES LANKFORD, Oklahoma             GARY C. PETERS, Michigan
MICHAEL B. ENZI, Wyoming             MAGGIE HASSAN, New Hampshire
JOHN HOEVEN, North Dakota            KAMALA D. HARRIS, California
STEVE DAINES, Montana                DOUG JONES, Alabama

                  Christopher R. Hixon, Staff Director
                Gabrielle D'Adamo Singer, Chief Counsel
              David N. Brewer, Chief Investigative Counsel
                        Douglas C. Geho, Counsel
                 Jerry F. Markon, Senior Policy Advisor
               Margaret E. Daum, Minority Staff Director
               Stacia M. Cardille, Minority Chief Counsel
                  Courtney C. Cardin, Minority Counsel
                     Laura W. Kilbride, Chief Clerk
                   Bonni E. Dinerstein, Hearing Clerk

                            C O N T E N T S

Opening statement:
    Senator Johnson..............................................     1
    Senator Peters...............................................     4
    Senator Paul.................................................    19
    Senator Lankford.............................................    23
    Senator Jones................................................    26
    Senator Harris...............................................    28
    Senator Hoeven...............................................    30
    Senator Daines...............................................    33
Prepared statement:
    Senator Johnson..............................................    45
    Senator McCaskill............................................    47
    Senator Peters...............................................    52

                      Wednesday, January 17, 2018

Sam Adolphsen, Former Chief Operating Officer, Department of 
  Health and Human Services, State of Maine, and Vice President, 
  Rockwood Solutions, and Senior Fellow, Foundation for 
  Government Accountability......................................     6
Otto Schalk, Prosecuting Attorney, Harrison County, State of 
  Indiana........................................................     8
Emmanuel Tyndall, Inspector General, State of Tennessee..........    10
David A. Hyman, M.D., J.D., Professor of Law, Georgetown 
  University Law Center..........................................    12
Andrew Kolodny, M.D., Co-Director, Opioid Policy Research 
  Collaborative, Heller School for Social Policy and Management, 
  Brandeis University............................................    14

                     Alphabetical List of Witnesses

Adolphsen, Sam:
    Testimony....................................................     6
    Prepared statement...........................................    56
Hyman, David A. M.D., J.D.:
    Testimony....................................................    12
    Prepared statement...........................................    69
Kolodny, Andrew M.D.:
    Testimony....................................................    14
    Prepared statement...........................................    74
Schalk, Otto:
    Testimony....................................................     8
    Prepared statement...........................................    64
Tyndall, Emmanuel:
    Testimony....................................................    10
    Prepared statement...........................................    66


Charts submitted by Senator Johnson..............................    83
Letter to HHS and CMS............................................    87
Majority Staff Report............................................    91
Minority Staff Memo with attachments.............................   255
Statements submitted for the Record from:
    Center on Budget and Policy Priorities.......................   389
    Andrew Goodman-Bacon, Assistant Professor of Economics, 
      Vanderbilt University Emma Sandoe, doctoral candidate, 
      Harvard University.........................................   392
    Maine Attorney General Janet Mills...........................   405
    Planned Parenthood...........................................   407
    Brendan Saloner, Assistant Professor John Hopkins Bloomberg 
      School of Public Health....................................   409
Responses to post-hearing questions for the Record from:
    Mr. Kolodny..................................................   412



                      WEDNESDAY, JANUARY 17, 2018

                                     U.S. Senate,  
                           Committee on Homeland Security  
                                  and Governmental Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10:03 a.m., in 
room SD-342, Dirksen Senate Office Building, Hon. Ron Johnson, 
Chairman of the Committee, presiding.
    Present: Senators Johnson, Paul, Lankford, Hoeven, Daines, 
Heitkamp, Peters, Hassan, Harris, and Jones.


    Chairman Johnson. Good morning. This hearing will come to 
    I want to first of all thank all the witnesses for taking 
the time to appear, for taking the time to prepare your 
testimony, and I look forward to your oral testimony and your 
answers to our questions.
    On its surface, people may be scratching their heads going, 
``Why is the Homeland Security and Governmental Affairs 
Committee (HSGAC) holding a hearing on potential Medicaid or 
other Government Federal funding of the opioid crisis? Why are 
you doing that in this Committee?'' We actually have a pretty 
long history of delving into this particular epidemic, this 
particular health care crisis.
    My own involvement started with reports at the Tomah 
Veterans Affair (VA) health care facility where there was 
overprescription, mixed toxicity of drugs resulting in the 
death of a young Marine because of drug toxicity, and finding 
that within that investigation we had, what was it, about a 
350-page report, 5,000 pages of supporting documents we also 
noticed a drug diversion potential within that investigation. 
This Committee has held three field hearings in Wisconsin, a 
field hearing in Ohio, one in New Hampshire, one in Arizona. I 
proposed the Promoting Responsible Opioid Prescribing (PROP) 
Act, which the Centers for Medicare and Medicaid Services (CMS) 
actually viewed as so important that they implemented it 
without us having passed the law, which is kind of nice.
    Senator Portman has been very active on this front, coming 
from Ohio--one of the States really stricken by this epidemic--
instrumental in the passage of Comprehensive Addiction and 
Recovery Act (CARA), and in proposing the Synthetics 
Trafficking and Overdose Prevention (STOP) Act. Both Senator 
Portman and myself, and Senator Hassan, were at the White House 
last week for the signing of the International Narcotics 
Trafficking Emergency Response by Detecting Incoming Contrband 
with Technology (INTERDICT) Act, which funded and authorized 
detection devices for fentanyl, which is becoming more and more 
of a problem. And, of course, my Ranking Member--I appreciate 
Senator Peters filling in--but Senator McCaskill has been very 
aggressively pursuing the marketing through pharmaceutical 
companies and seeing how we can solve the problem from that 
    So this Committee has been highly involved in this, and I 
just want to kind of lay out specifically why I got involved in 
this particular issue. It started with a pretty interesting, 
pretty depressing article written in Commentary Magazine by 
Nick Eberstadt, a demographer who works for the American 
Enterprise Institute. In that article, he was quoting Alan 
Krueger, the former Chairman of President Obama's Council of 
Economic Analysis, and Mr. Krueger published a report talking 
about prime, working-age male labor-force dropouts. He said 
nearly half of all prime-age, working-age male labor-force 
dropouts, an army now totaling roughly 7 million men, currently 
take pain medication on a daily basis.
    He went on to quote the author of ``Dreamland,'' Sam 
Quinones. This resonated with me, having been a former 
employer, and I realize that for an awful lot of people, one of 
the primary motivating factors for getting a job is to get 
health care. And when you combine government programs that 
provide free health care and then on top of that a government 
program that provides you a prescription card that allows you 
access to products at a very low price that you can sell and 
divert into illegal drug-trafficking markets and supplement 
your income to the tune of thousands of dollars per year, 
unfortunately some people take advantage of that.
    Mr. Quinones is quoted in that article out of his book 
``Dreamland,'' and I just want to read the quote. He was 
actually referring to Portsmouth, Ohio, when he was talking 
about this: ``The Medicaid card pays for medicine--whatever 
pills a doctor deems that the insured patient needs. Among 
those who receive Medicaid cards are people on State welfare or 
on a Federal disability program known as Supplemental Security 
Income (SSI). . . . If you could get a prescription from a 
willing doctor--and Portsmouth had plenty of them--the Medicaid 
health insurance cards paid for that prescription every month. 
For a $3 Medicaid co-pay, therefore, addicts got pills priced 
at thousands of dollars, with the difference paid for by U.S. 
and State taxpayers. A user could turn around and sell those 
pills, obtained for that $3 co-pay, for as much as $10,000 on 
the street.''
    Later on, Nick Eberstadt just writes, ``Disability checks 
and means-tested benefits cannot support a lavish lifestyle. 
But they can offer a permanent alternative to paid employment, 
and for growing numbers of American men, they do.''
    Now, again, that article piqued my interest, and so I asked 
my staff--I said, OK, this is kind of being laid out there, not 
necessarily as a theory but anecdotally, showing a real 
problem. And so I asked my staff: Can you take a look, do a 
data search and find out and just identify individuals that 
have been either convicted or at least charged with taking 
their Medicaid card, obtaining those pills, and then selling 
those on the open market? In 4 days they identified 261 
defendants that had either been charged or convicted of doing 
just that.
    OK. We have a problem that needs to be further explored, 
and so we did explore it, and today we are issuing a report\1\ 
based on our further study in which, again, the staff has 
uncovered over 1,000 defendants that have either been charged 
or convicted of using their Medicaid cards and diverting in 
some way, shape, or form.
    \1\ The staff report referenced by Senator Johnson appears in the 
Appendix on page 91.
    Along the road, even though we are focusing on Medicaid, we 
have discovered about 243 defendants in the context of 
Medicare. In November 2017 there were 60 active criminal 
investigations of opioid diversion through the VA health care 
system. So, again, this is a governmentwide program phenomenon 
where American taxpayers are providing well-intentioned funds 
into some of these programs, and those funds are being utilized 
to divert drugs, sell them on the open market, and in some 
cases fuel some pretty interesting criminal enterprises or just 
support a lifestyle of non-work, which is not healthy.
    I have as a follow-up today issued a letter\2\ to the 
Acting Secretary of Health and Human Services (HHS) asking what 
controls, what can we do, to what extent are they tracking 
this, to what extent are they aware of how much money we spend 
on Medicaid and Medicare that is being used in this case.
    \2\ The letter to HHS referenced by Senator Johnson appears in the 
Appendix on page 87.
    Now, I do want to point out what I am not saying either in 
this report or in this hearing. I am not making the claim that 
epidemic is just because of Medicaid expansion. Obviously, 
there are more dollars available through Medicaid expansion. 
There are some indications--HHS had a study that we had to 
extract from them--showing that there may be a difference 
between Medicaid expansion States versus non-expansion States. 
But this crisis, this epidemic, began way before Medicaid 
    I also am not saying that Medicaid does not help an awful 
lot of people and the dollars used for treatment have not 
helped untold numbers of people. I am not saying this is a 
primary cause. I think what we are certainly saying is this is 
an unintended consequence. It is certainly a contributing 
factor, and it maybe enables something that maybe should not be 
enabled, and it is a very serious problem that has to be looked 
at. And, again, coming from the stand point of the problem-
solving process, I think it is kind of hard to deny when you 
take a look at this report, take a look at some of these 
examples--and we have 110 of some of the most egregious 
examples in here involving drug rings, a grocery store being 
used as kind of a central port, pharmacists, and nursing homes. 
Again, it is almost hard to understand the complexity of some 
of these schemes, for example a podiatrist actually injecting 
chemicals to create pain so he can prescribe more opioids and 
facilitate diversion for profit.
    So the schemes are actually really beyond your imagination, 
but people use their imagination, so it is kind of hard to 
deny, when you take a look at these examples, that this is not 
a problem that needs to be further explored. And I am just 
saying that we ignore this aspect--and it is just an aspect of 
this overall epidemic--we ignore that aspect, this particular 
phenomenon, this reality, at our own peril.
    So, again, I want to thank the witnesses. I look forward to 
your testimony, and I will turn it over to my substitute 
Ranking Member, Senator Peters, for his opening comments.


    Senator Peters. Well, thank you, Mr. Chairman. Today, as 
you mentioned, I am filling in for Ranking Member McCaskill who 
wanted to be here but due to extenuating circumstances cannot 
be here. But I would like to ask unanimous consent to include 
her opening statement\2\ and a memorandum prepared by the 
Committee's Democratic staff into the hearing record today.\3\
    \1\ The prepared statement of Senator Peters appears in the 
Appendix on page 52.
    \2\ The prepared statement of Senator McCaskill appears in the 
Appendix on page 47.
    \3\ The Memorandum prepared by the Minority Staff appear in the 
Appendix on page 255.
    Chairman Johnson. Without objection.
    Senator Peters. Thank you, Mr. Chairman.
    Before I begin my statement, I would also like to welcome 
our new colleague to the Committee, Senator Doug Jones. Welcome 
to this Committee. Congratulations on your election. You are 
going to find this a very interesting Committee, one doing very 
important work, and we know you are going to do an outstanding 
job. Thank you for joining us.
    Chairman Johnson. While you said that, I wanted to wait 
until Senator Jones actually showed up. I also want to welcome 
you to this Committee. I think you will find hopefully in the 
hearing today, we do not do show trials here. This is really a 
very bipartisan Committee. We conduct ourselves at that level 
of decorum, and it is really about uncovering the truth, laying 
out realities so you can solve problems. Again, I want to 
congratulate you on your election and was really pleased--and 
we spoke earlier--that you joined our Committee. I think you 
will enjoy your time here as well.
    Sorry for interrupting.
    Senator Peters. No. That is good. Thank you.
    At the start, I think before we start this hearing and hear 
the testimony from the folks before us, I think it is important 
to reiterate that Medicaid expansion has produced not only 
historic coverage gains, but it also has very far-reaching 
positive health effects for American families. At its core 
Medicaid and the Affordable Care Act (ACA's) Medicaid expansion 
are critical programs that help hardworking American families 
enroll in health care coverage and protect our Nation's 
    Nearly 80 percent of Medicaid enrollees come from a working 
family, and over 40 percent of Medicaid enrollees are children. 
Medicaid is a program that literally saves lives. I think we 
can all agree that when you or your family member or friend 
gets sick or hurt, we should be able to access affordable 
health care coverage. Medicaid and Medicaid expansion serves as 
a bridge to affordable health care for millions of working 
families in our country. And I am sure we have all heard 
stories, but just as a reminder, these programs are there to 
make sure that someone's parent can have that needed surgery or 
a child's family can afford the high cost of their cancer 
treatment or that a person who has been injured can get care 
that they need to get back to work.
    Medicaid has also been critical in fighting the opioid 
epidemic. Opioid abuse and its tragic impact continues to be a 
growing problem in my home State of Michigan, as it is around 
the Nation. Between 2014 and 2015, the Centers for Disease 
Control (CDC) report that drug overdose deaths in Michigan 
increased by over 13 percent. In 2015, more than 2 million 
people across the Nation struggled with prescription pain 
reliever substance abuse disorder, an unfortunate number that 
continues to trend upward.
    As we work to combat this very serious epidemic, the 
Affordable Care Act has greatly expanded access to treatment in 
Michigan and across the Nation, including for individuals with 
substance abuse disorders. Prior to the passage of the ACA, 
many individuals with substance abuse disorders were unable to 
get the care that they needed.
    Since the passage of the Affordable Care Act, the uninsured 
rate in Michigan has been cut in half, and more than 600,000 
individuals are now enrolled in our State's Healthy Michigan 
expanded Medicaid program. Combined with the private exchanges 
in our State, nearly 900,000 individuals in Michigan have 
coverage through the Affordable Care Act. Many of these 
individuals are now able to access health care insurance for 
the very first time in their lives.
    Since the ACA's Medicaid expansion went into effect, more 
than 1.6 million Americans have gained access to this vital 
    Last year, this Committee, the Homeland Security and 
Governmental Affairs Committee, the Subcommittee that I am a 
Member of, which is the Permanent Subcommittee on 
Investigations, had a hearing on the opioid epidemic, and we 
heard from witnesses who, like each of you here today, are 
fighting on the front lines. I spoke with Dr. Thomas Gilson, a 
medical examiner from Cuyahoga County, who told me how Medicaid 
expansion is literally helping them save lives by getting 
people suffering from addiction into treatment programs.
    I also spoke with Thomas Synan, Jr., chief of police for 
Newtown, Ohio, and he largely agreed with Dr. Gilson and went 
on to tell me, and I am going to quote him here, ``To reduce 
demand and in turn reduce supply, we have to get people into 
treatment, and one of the programs our teams are doing out 
there in the Hamlin County area is signing people up for 
Medicaid to try to get them into that treatment.''
    Their overwhelming message to me was that we must preserve 
Medicaid and work to improve the critical health services that 
the program offers because it is literally saving people's 
lives each and every day.
    And so today I appreciate each of you being here today, and 
I look forward to hearing about how we can work to improve our 
Nation's Medicaid program to better serve the families enrolled 
and to continue our efforts to combat the abuse. I have no 
doubt that there are improvements that can be made, and we are 
going to hear about some of those improvements today, and I 
look forward to your suggestions. But I want to end by 
stressing as we make these improvements, we must do it in a way 
that does not jeopardize the health care for those who so 
desperately need it.
    Thank you.
    Chairman Johnson. Thank you, Senator Peters.
    I would also ask consent that my prepared opening remarks 
be entered into the record.\1\ Without objection.
    \1\ The prepared statement of Senator Johnson appears in the 
Appendix on page 45.
    As we are welcoming Senator Jones, we also have to say 
good-bye to Senator Tester, who has been a very valued Member 
of this Committee. We hate to see him leave, but, again, we are 
happy to have Senator Jones.
    I do need to announce a change in the Subcommittee 
membership to make it official: Senator Hassan will replace 
Senator Tester on the Permanent Subcommittee on Investigations, 
and Senator Jones will replace Senator Hassan on the 
Subcommittee on Federal Spending Oversight and Emergency 
Management. So that makes it all official.
    Now, it is the tradition of this Committee to swear in 
witnesses, so if you will all stand and raise your right hand. 
Do you swear that the testimony you will give before this 
Committee will be the truth, the whole truth, and nothing but 
the truth, so help you, God?
    Mr. Adolphsen. I do.
    Mr. Schalk. I do.
    Mr. Tyndall. I do.
    Dr. Hyman. I do.
    Dr. Kolodny. I do.
    Chairman Johnson. Please be seated.
    Our first witness is Sam Adolphsen. Mr. Adolphsen is Vice 
President at Rockwood Solutions and a Senior Fellow at the 
Foundation for Government Accountability (FGA). Mr. Adolphsen 
previously served as the Chief Operating Officer (COO) at the 
Maine Department of Health and Human Services. He also served 
as Maine's Deputy Commissioner of finance with oversight over 
the State's Medicaid budget. Mr. Adolphsen.


    Mr. Adolphsen. Chairman Johnson, Members of the Committee, 
thank you for the privilege of testifying.
    \2\ The prepared statement of Mr. Adolphsen appears in the Appendix 
on page 56.
    For 3 years, starting in 2014, I sat in my office in Maine, 
and I watched something terrible unfold right in front of me. I 
would review Medicaid pharmacy spending in one meeting, and 
then I would walk down the hall for my next meeting about the 
opioid crisis and how to stop it. And the only thing increasing 
as fast as the budget line for opioids was the body count from 
overdose deaths.
    In the morning I would read a newspaper account of someone 
caught up in a drug arrest, and that afternoon I would see that 
same person again when reviewing welfare enrollment data. It 
happened far too often.
    Our welfare fraud team worked daily with drug enforcement 
agencies to investigate when Medicaid members sold their pills 
or Suboxone strips or traded their welfare cards for heroin. I 
worked with the Medicaid Fraud Control Unit as we reviewed 
cases of caregivers diverting pain pills from desperate and 
dying Medicaid patients. I wish these were isolated incidents, 
but they are not. The paths of dependency on Medicaid and 
addiction to opioids are often intertwined.
    At the same time I was helping to run a Medicaid program 
that was funding record-breaking amounts of opioids, the Nation 
was being told that the solution to the drug problem was to put 
more people on Medicaid. Medicaid expansion was held up as the 
silver bullet solution to the drug crisis. But no one was 
considering the dangerous side effects of Medicaid. And the 
danger of prescription opioids is now better understood. They 
are the gateway to addiction. Four out of five heroin users 
started by abusing prescription drugs.
    When that free plastic Medicaid card is issued, it does not 
only pay for drug treatment. It also supplies opioids at a 
staggering rate. The numbers are alarming. A quarter of 
Medicaid members get an opioid prescription, and the highest 
rate is among the Medicaid expansion population of able-bodied 
adults. A CDC study done by the Obama Administration showed 
that someone on Medicaid was six times more likely to die from 
an opioid overdose. While one out of every five people is on 
Medicaid, the program pays for two out of every five emergency 
room trips for opioid and heroin poisonings. Medicaid expansion 
has not fixed this problem, but it might have made the problem 
    Rhode Island increased their Medicaid enrollment by 66 
percent, and their overdose deaths doubled. West Virginia, 
Ohio, Pennsylvania, all expanded Medicaid, adding a total of a 
million and a half adults to the program. They rank first, 
second, and third, respectively, in the number of drug overdose 
    Of the 10 States with the highest rate of opioid deaths, 
nine have expanded Medicaid under Obamacare. This correlation 
is very concerning, and the question of causation begs for more 
    As millions of adults have been added to the program, 
prescription drug abuse has multiplied. With no out-of-pocket 
costs and few restrictions on providers, prescription 
painkillers have flowed unfettered to Medicaid recipients, and 
this injected a whole new supply of free opioids into the 
    I also witnessed people on Medicaid withdrawing from the 
community, not working, living an isolated and idle life that 
is more prone to drug abuse and addiction. Fifty-two percent of 
able-bodied adults on Medicaid, half, do not work. And this is 
really tragic because we know that for so many, work is the 
best answer to move away from a life of crime or addiction.
    Rather than expanding a broken program that funds pain 
pills, we should focus on breaking the cycle of pain and 
dependency by helping people get back to work.
    This drug problem is bad enough. We have to make sure that 
Medicaid is not throwing fuel on the fire. We need to make sure 
that Medicaid is not funding the drug problem but instead is 
structured to promote work and health for our neighbors.
    Thank you.
    Chairman Johnson. Thank you, Mr. Adolphsen.
    Our next witness is Otto Schalk. Mr. Schalk is the 
Prosecuting Attorney for Harrison County, Indiana. In addition, 
Mr. Schalk produced the film ``A Hit of Hell,'' a documentary 
about the opioid epidemic. Mr. Schalk.

                    COUNTY, STATE OF INDIANA

    Mr. Schalk. Thank you. Good morning. My name is Otto 
Schalk, and I am the prosecuting attorney for Harrison County, 
Indiana. We are a community in southern Indiana that in many 
ways is representative of much of our Nation. I am honored to 
serve my county and my State as a prosecutor, and I am humbled 
to be before you this morning. I embrace this opportunity to 
share with you what many of us in law enforcement see and deal 
with on a daily basis.
    \1\ The prepared statement of Mr. Schalk appears in the Appendix on 
page 64.
    Every time a hardworking American pays their taxes, they 
are inadvertently funding drug dealers with a new supply of 
high-powered opioids that are poisoning our schools and our 
streets. That is a bold claim; however, as a prosecutor, it is 
something that I see routinely. It is no secret that our 
Medicaid program is ripe for fraudulent activity. Prosecutors 
knows this, doctors know this, and the reality is that drug 
dealers know this as well. An individual need not only traffic 
illegal street drugs to qualify as a drug dealer; a Medicaid 
beneficiary that is selling their prescription pills is no 
different in the eyes of the law.
    It bears mentioning that those who are impoverished are far 
more susceptible to end up in the criminal justice system. 
Anyone who has spent a day in a criminal courtroom across 
America knows this to be true. In my role as prosecuting 
attorney, I have prosecuted at an extreme disproportionate rate 
those that are Medicaid recipients. I see the disparity each 
and every time I walk into court. For a reference point, just 
looking at the reported data from our county from clients that 
are on probation that are in an alcohol and drug rehabilitation 
program, more than half of them are making less than $10,000 
per year.
    In the simplest of terms, whether it is labeled as Medicaid 
fraud or drug dealing, it exists for the same reason that bank 
robberies occur. There is a pile of cash, and those will ill 
intentions will let greed lead them to commit crimes. Now, 
common sense dictates that when we give someone making less 
than $10,000 per year, that is struggling to keep the lights 
on, that is struggling to put food in the refrigerator, and we 
give a 90-count bottle of hydrocodone each and every month, and 
some of these pills are going for $15 apiece on the street, tax 
free, they are going to see the opportunity for financial gain. 
If we believe otherwise, we are naive.
    Unlike other street drugs such as heroin or meth, a dealer 
in opioids does not need to have someone that is well connected 
in the drug culture to funnel their supply. A dealer in opioids 
simply needs to know a willing doctor and claim to have an 
ailment. And if the opioid dealer is on Medicaid, they receive 
their supply of high-powered narcotics for free or nearly free. 
Simply polling our jail and our probation officers, I found 
that most of our inmates and probation clients that are on 
probation for drug-related charges are taking pursuant to a 
valid prescription two to four high-powered opioids each and 
every day. That is 60 to 120 pills they are being prescribed 
each month.
    Now, conservatively, some of these pills are going for $30 
apiece on the street. The incentive to opt out of Medicaid, to 
better one's lot in life, is drastically reduced for 
individuals that are making $3,600 a month tax free in selling 
their prescription pills that they are getting at no cost.
    To that extent, the abuse that we see among Medicaid 
recipients as it relates to misuse and/or selling their 
prescriptions is rampant, and that is just based on what we are 
seeing and what we are filing. And those of us in law 
enforcement know that we are only catching a very small 
percentage of those committing these crimes. A reactive justice 
system, coupled with a shortage of resources, often leads to a 
small percentage of the bad actors being caught. A true number 
of those that are abusing the system would likely be 
    Now, to be clear, I am not here this morning saying that 
Medicaid is not a tremendous asset for our Nation, but I am 
speaking from my own personal experiences as a prosecutor, a 
prosecutor in the trenches. I see firsthand what is devastating 
our communities. I see day in and day out individuals that are 
Medicaid recipients dealing and abusing their prescription 
pills that are government funded. It is simply a fact. I see 
individuals getting arrested for selling their prescriptions, 
and yet they test clean for them when they are drug-tested 
during the jail booking process.
    So is the opioid epidemic an unintended consequence of 
Medicaid? Certainly, with the increased amount of the 
impoverished having access to medical care, there is a greater 
likelihood that those who are impoverished are going to see the 
opportunity for turning a profit, albeit illegal, on the 
street. Now, one obvious solution would be to create more 
rigorous checks and balances of the medical bills being 
submitted through Medicaid for payment. Are the prescriptions 
necessary? Is the opiate prescriptions in line with the 
treatment plan? I have never understood why so many of the 
people that I am prosecuting are getting prescription after 
prescription of high-powered opiates when a simple over-the-
counter drug would be just as effective.
    The opioid epidemic has brought devastation to our schools 
and our communities. The opioid epidemic is far too complex to 
narrow its causation to one specific issue. And while the 
issues are complex and many, there is one recurring theme, and 
that is poverty. Until we take affirmative steps to create 
jobs, grow businesses, and slowly diminish the gap between the 
impoverished and the middle class, any changes that are made 
will be a Band-Aid fix to the underlying problem.
    I want to sincerely thank each of you for the opportunity 
to be a part of the solution of this gripping epidemic. I look 
forward to answering any questions that you may have.
    Chairman Johnson. Thank you, Mr. Schalk.
    Our next witness is Emmanuel Tyndall. Mr. Tyndall is the 
Inspector General (IG) for the State of Tennessee. Prior to 
becoming Inspector General, Mr. Tyndall served with the 
criminal investigation division as a special agent for 10 years 
investigating TennCare cases, TennCare is Tennessee's Medicaid. 
He has approximately 35 years of law enforcement experience and 
holds master's degrees in health and human performance, 
management, and criminal justice administration. Mr. Tyndall.


    Mr. Tyndall. Thank you, Mr. Chairman and Committee Members. 
As the Chairman said, I am Manny Tyndall. I am the Inspector 
General for the Office of Inspector General (OIG) in Tennessee.
    \1\ The prepared statement of Mr. Tyndall appears in the Appendix 
on page 66.
    In 2004, the Office of Inspector General was created 
specifically to root out fraud and abuse in the TennCare 
program and criminally prosecute applicants and recipients who 
game the system. And as the Chairman alluded to, TennCare is 
simply our name for the Medicaid program in the State of 
    The Office of Inspector General receives and triages more 
than 4,000 complaints each year. I think you will find that 
Tennessee is one of a few, if not the only State that 
criminally prosecutes Medicaid applicants and recipients who 
engage in drug-seeking behavior or prescription drug diversion 
at the cost of the TennCare program. Our research indicates 
that States bordering Tennessee address recipient fraud 
administratively. I believe that suggests that Medicaid fraud 
is probably underreported nationwide.
    What I would like to share with you today is some examples 
of how the TennCare program is defrauded and how prescription 
drugs paid for by TennCare are diverted for illegal use.
    Approximately 80 percent of all arrests--2,400 of our 
arrests--were prescription drug diversion or doctor-shopping 
related; the ages ranged between 21 and 78; 1,678 arrests were 
for drug diversion, which includes sale and forgery.
    The courts have ordered approximately $315,000 in 
restitution to be repaid to the Bureau of TennCare for these 
offenses; 709 arrests were for doctor shopping. Our doctor-
shopping law became effective June 18, 2007. Since that date, 
the courts have ordered approximately $292,000 in restitution 
to be repaid to the Bureau of TennCare for those offenses.
    Some of the schemes I have been witness to include:
    Recipients receiving valid prescriptions for prescription 
drugs, having it filled and paid for by TennCare, and then 
selling a portion of the medication on the street.
    Recipients are calling in prescriptions to pharmacies 
pretending to be employees of a medical practice and having 
TennCare pay for that medication.
    Recipients are passing forged or altered prescriptions, 
written by other parties, and then passing those prescriptions 
at pharmacies and having TennCare pay for that medication.
    Recipients are adding medication to a prescription being 
hand-carried between doctor's office and the pharmacy and 
having TennCare pay for that medication. For example, they may 
receive a prescription for amoxicillin and between the doctor's 
office and the pharmacy, they will add hydrocodone to that 
prescription and have TennCare pay for that medication.
    Doctor shopping. Doctor shopping is where a recipient fails 
to advise a provider that within the last 30 days they have 
already received the same or similar narcotic medication that 
is being prescribed. There are usually multiple counts of this 
    Nurses and medical technicians are selling prescriptions 
already signed by the doctor. Some of those prescriptions have 
sold for as much as $80.
    We work very closely with our drug task forces who make the 
buys. Normally, one, two or three pills are purchased each time 
during a drug transaction, and usually three buys are made 
before we seek an indictment.
    Depending on the type of medication and the milligram, 
prescription medication can sell for $5 to $10 per pill or some 
medications as much as $1 per milligram.
    With there being little or no cost/overhead to the Medicaid 
recipient, if they were to sell an entire prescription of 90 
hydrocodone 5-milligram tablets for $5 per pill, they would 
make approximately $450. If they did this every month it would 
garner approximately $5,400 a year, and that is a very 
conservative estimate. That is for one person for 1 year, and 
we make approximately 140 or more arrests each year. I am 
confident that many instances of TennCare fraud are not 
    The following cases demonstrate the lengths some people 
will go to to obtain pain medication:
    A husband and wife would take turns intentionally burning 
themselves on their lower legs with boiling water and go to a 
different emergency room to obtain pain medication and have 
TennCare pay for the ER visit and the medication.
    We have charged four individuals for a fourth offense of 
doctor shopping.
    We have charged one individual with 25 counts of 
prescription drug fraud where she forged or altered 
prescriptions in order to obtain hydrocodone and oxycodone and 
used her TennCare benefits to pay for the medication. She 
admitted to selling the pills to support her lifestyle.
    I personally worked a case where I charged a young woman 
with 87 counts of obtaining a controlled substance by fraud, 
TennCare fraud, and identity theft. She was the office manager 
at a doctor's office and would steal several prescription slips 
from a prescription pad each week. She would forge the doctor's 
signature and the Drug Enforcement Administration (DEA) number 
on prescriptions in her name, her husband's name, many of her 
friends, and even her grandmother's name. Some prescriptions 
were paid for by TennCare, and some she would trade for half of 
the medication that person received.
    Mr. Chairman, thank you for the opportunity to speak, and I 
am willing to answer any questions the Committee might have.
    Chairman Johnson. Thank you, Mr. Tyndall.
    Our next witness is Dr. David Hyman. Dr. Hyman is a 
physician and a professor of law at the Georgetown University 
Law Center. Dr. Hyman focuses his scholarship on the regulation 
and financing of health care. Dr. Hyman.


    Dr. Hyman. Thank you, Mr. Chairman and Members of the 
Committee. Much of my testimony is drawn from a book that is 
going to be coming out in April, co-authored with Professor 
Charles Silver, on the American health care system. The book is 
titled ``Overcharged: Why Americans Pay Too Much for Health 
Care, and it explains how the ways in which we have decided to 
pay for health care services have predictable consequences on 
the cost and quality of those services, as well as the rates of 
waste, fraud, and abuse. Our public programs are particularly 
vulnerable to the latter set of problems.
    \1\ The prepared statement of Dr. Hyman appears in the Appendix on 
page 69.
    Today we are here to focus on the opioid epidemic. I 
commend the Committee for holding this hearing. Although a lot 
of what we have heard so far has been about the death rate, it 
is also important to note the opioid crisis has consequences in 
terms of destroyed lives, broken families and marriages, 
medical expenses, and lost productivity.
    My testimony flags four distinct issues: the seriousness of 
the problem; the complexity of the causes; the ways in which 
the design of our public programs make them particularly 
vulnerable to the sorts of abuse and overuse of the sort that 
you have already heard about; and the role that patients have 
played in this particular problem. In the interest of time, I 
am going to focus on the latter two issues.
    In terms of the role of the causes, it is important to note 
that these are prescription opioids, and apart from outright 
theft, you need a prescription from a physician in order to get 
them. There is a serious problem with overprescription. The 
causes of that are somewhat complex, but there are certainly 
bad-actor physicians out there who are willing to meet their 
patients in coffee shops and restaurants, write them 
prescriptions in exchange for cash. The book talks about one 
Dr. Yee who was responsible for essentially a mini-epidemic of 
opioid usage. There are particular parts of the country that 
have these problems. South Florida had so many pain clinics 
that the State earned the nickname ``Oxy Express.'' And so that 
again is an indication of the nature of the reimbursement 
system that enables these situations to develop.
    Now, both Medicare and Medicaid were designed to mimic Blue 
Cross and Blue Shield programs circa 1965, that is, indemnity-
based insurance where the amount that was paid was tightly 
controlled but the volume of services was really not 
controlled. If a physician said you needed something, the 
insurance paid for it. There was not much in the way of 
networks or preapprovals or utilization review.
    Over time the private market has evolved, but the public 
payers have remained largely passive bill payers. The results, 
as we observe in our book, are easy to observe with 
prescription drug fraud. The government has studied 
prescription drug fraud in public programs repeatedly, and each 
time it has concluded that fraud is rampant. A 2009 Government 
Accountability Office (GAO) report on the Medicaid programs in 
five large States opened with the observation that 
investigators ``found tens of thousands of Medicaid 
beneficiaries and providers involved in potential[ly] 
fraudulent purchases of controlled substances, abusive 
purchases of controlled substances, or both.'' Sixty-five 
thousand beneficiaries had engaged in ``doctor shopping.'' Four 
hundred individuals had gotten prescriptions for controlled 
substances from between 21 to 112 medical practitioners and 
visited up to 46 different pharmacies to get them filled. As 
long as you have a prescription, it will be filled, and the 
public payers will pay for it.
    Now, we have taken various steps to try and address these 
problems, including surveillance, prior approval, limitations 
on the number of pills that can be dispensed, disclosure of 
information to physicians about the risks of overprescription, 
and prescription drug monitoring databases. Each of these 
reforms has the potential to help reduce inappropriate 
prescribing, but design details make a big difference, as does 
implementation. And the fact they are necessary shows how the 
design features of Medicare and Medicaid make them vulnerable 
to waste, fraud, and abuse.
    Last, the role of patients. The tendency is to focus on 
providers, but patients are often involved in prescription drug 
fraud. A 2011 GAO report involving Medicare found that doctor 
shopping was widespread, with more than 170,000 Medicare 
beneficiaries receiving prescriptions for controlled substances 
from five or more medical practitioners. Another study found 
that half a million Medicare beneficiaries were prescribed 
excessive amounts of opioids, including 22,000 who appeared to 
be doctor shopping. So the problem is not limited to Medicaid. 
It is not limited to public programs. But the design features 
of the public programs make them more vulnerable.
    Thank you very much.
    Chairman Johnson. Thank you, Dr. Hyman.
    Our final witness is Dr. Andrew Kolodny. Dr. Kolodny is a 
physician and the co-director of Opioid Policy Research at the 
Heller School for Social Policy and Management at Brandeis 
University. He previously served as chief medical officer for 
Phoenix House and as chair of psychiatry at Maimonides Medical 
Center, New York.
    Chairman Johnson. Dr. Kolodny.


    Dr. Kolodny. Thank you for the opportunity to appear before 
you today. I would like to also thank Ranking Member McCaskill 
and Members of the Committee for this opportunity.
    \1\ The prepared statement of Dr. Kolodny appears in the Appendix 
on page 74.
    The opioid crisis is an epidemic of opioid addiction, 
meaning that the reason the United States is experiencing 
record-high levels of opioid overdoses, the reason we are 
seeing a soaring increase in infants born opioid-dependent, 
outbreaks of injection-related infectious diseases, impact on 
the workforce, the driver behind all of these health and social 
problems has been a sharp increase in the number of Americans 
suffering from opioid addiction.
    The primary driver of the opioid addiction epidemic has 
been made clear by the CDC. This slide is a CDC graph.\2\ It 
shows that as opioid prescribing began to soar in the 1990s, it 
led to parallel increases in opioid addiction and overdose 
deaths. This is an epidemic caused by the medical community 
overprescribing opioids. On this graph the green line 
represents opioid prescribing, the red line represents opioid 
deaths, and the blue line represents opioid addiction. As the 
green line went up, as opioid prescriptions began to soar, it 
led to parallel increases in addiction and overdose deaths.
    \2\ The graph referenced by Mr. Kolodny appears in the Appendix on 
page 78.
    The reason the green line began rising, the reason the 
medical community began prescribing so aggressively is because 
we--doctors--were responding to a brilliant, multifaceted 
marketing campaign that changed the culture of opioid 
prescribing. Starting in the 1990s, we began hearing that 
patients were suffering because we were too stingy with 
opioids. We began hearing that we should stop worrying about 
getting patients addicted. We began hearing that even with 
long-term use, the risk that a patient would get addicted was 
much less than 1 percent.
    We would have been less gullible if we were only hearing 
these messages from drug company sales reps. But we were 
hearing these messages from pain specialists, eminent in the 
field of pain medicine; we were hearing it from professional 
societies, from the Joint Commission, which accredits our 
hospitals; we were hearing it from the Federation of State 
Medical Boards--all of whom had financial relationships with 
opioid manufacturers.
    I would like to thank Ranking Member McCaskill for 
launching an investigation of these relationships.
    It is fair for you to ask about the role played by 
Medicaid, and it is fair to assume that access to medical 
providers offered by the Medicaid program could increase the 
risk that an individual would develop a disease frequently 
caused by doctors' prescriptions. I believe that access to 
prescribers that Medicaid, Medicare, and commercial insurance 
offers does increase the likelihood that someone might develop 
a disease caused by prescriptions. But I do not believe that 
Medicaid should be singled out in this regard. Opioid overdoses 
have been increasing in people with all types of insurance and 
in people from all economic groups from rich to poor.
    If you look at this graph--it is from a recent Health 
Affairs paper--you will see the orange line at the top of this 
graph.\1\ That represents people admitted to hospitals being 
treated for overdose insured by Medicare. You can see with all 
of the colors of the lines rising on this graph, they show that 
we have seen a rise in hospital admissions for opioid overdoses 
for all types of insurance, but what we see on this graph is 
that the fastest-growing share of hospitalizations for opioid 
overdose has been Medicare, not Medicaid. Medicare 
beneficiaries went from the smallest proportion of these 
hospitalizations in the 1990s to the largest share by the mid-
    \1\ The graph referenced by Mr. Kolodny appears in the Appendix on 
page 79.
    I also do not believe Medicaid expansion is making the 
epidemic worse. Medicaid expansion is not responsible for the 
very sharp increase we have seen in opioid overdose deaths over 
the past few years. The reason we are seeing a sharp increase 
in opioid overdose deaths, as you know, is because of fentanyl. 
Medicaid expansion has not led to more aggressive opioid 
prescribing. Since 2012, we have seen opioid prescribing 
trending down, thank heavens. The opioid crisis is getting 
worse, again, most rapidly in the States that have the most 
    Chairman Johnson, you have made the point that Medicaid is 
not a silver bullet for tackling opioid addiction. I agree with 
you. Medicaid is far from a silver bullet. With regard to 
improving access to effective addiction treatment, Medicaid is 
necessary, but it is not sufficient. The addiction treatment 
services that health insurance, including Medicaid, can pay for 
must also be available. The first-line treatment for opioid 
addiction is buprenorphine, also called ``Suboxone.'' Access to 
this treatment is not sufficient. For opioid-addicted 
individuals who are fortunate enough to access buprenorphine, 
too often their health insurance, including Medicaid, is only 
paying for the prescription. Patients with insurance must often 
pay out of their own pocket for the visit to the doctor. This 
is because there are not enough doctors prescribing 
buprenorphine, and the few who do do not accept insurance, 
including commercial and Medicare. And many State-licensed drug 
and alcohol treatment programs that do accept Medicaid are not 
offering medication-assisted treatment.
    If you look at the last chart with these horizontal 
lines,\2\ that is showing you individuals who are receiving 
medication-assisted treatment within the State-licensed system. 
The fact that these lines are pretty much flat shows that, 
despite our worsening opioid addiction epidemic, we have not 
been increasing access adequately to medication-assisted 
    \2\ The chart referenced by Mr. Kolodny appears in the Appendix on 
page 82.
    If we want to see opioid overdose deaths start to decline, 
there will need to be a massive Federal investment to build a 
treatment system that does not exist yet. I believe Medicaid is 
a necessary ingredient to make these programs viable. We must 
ensure that in every county in the United States an opioid-
addicted American can walk into an outpatient treatment center 
and on that same day receive effective treatment regardless of 
their ability to pay for it. Until that happens, I believe 
overdose deaths will remain at record-high levels.
    Thank you.
    Chairman Johnson. Thank you, Dr. Kolodny.
    I am going to defer my questions except for one, and if you 
would quickly put up the chart with opioid-related hospital 
stays,\1\ because you had a similar chart and I just kind of 
want to get your reaction to this. We actually developed this 
off of the hard numbers in terms of the numbers of tens of 
thousands of people, and we plotted this chart with, inpatient 
stays per 100,000, the difference between Medicaid-paid versus 
private insurance-paid, and it reflects a pretty large 
difference dating back many years, with a slight uptick from 
about 350 per 100,000 to close to 450 per 100,000 for Medicaid-
paid stays. Can you kind of explain that difference right 
    \1\ The chart referenced by Senator Johnson appears in the Appendix 
on page 85.
    Dr. Kolodny. It would be difficult to explain without 
reading through the full paper. The chart that I showed is from 
a Health Affairs paper that was published a few weeks ago, 
which has very current data in it, and I am more familiar with 
that data. Those were hospital admissions involving opioid 
overdoses, and what we saw in that chart was a very significant 
rise for all payer types, including self-pay. And what we saw 
in the Health Affairs paper is a very substantial increase for 
Medicaid but an even greater increase for Medicare.
    Chairman Johnson. Medicare, OK. Again, these numbers come 
from Health and Human Services, and all we did is just take it 
and put it to number of stays per 100,000 just to make it a 
little bit more relatable.
    With that, I will turn it over to Senator Peters.
    Senator Peters. Thank you, Mr. Chairman, and thank you to 
each of our witnesses for your testimony today.
    If I could summarize what I heard from everyone--hopefully 
this is accurate--there is a recognition as to how important 
Medicaid is as a health provider for Americans who have the 
ability to access that and that health care should be quality 
health care that is affordable and accessible to everyone, and 
that this is not an indictment on that part of Medicaid, that 
we are going to continue to strengthen that if we can and make 
it work better. But there are some issues that we should be 
talking about, and certainly dealing with the opioid addiction, 
these are important issues that should be discussed and we 
should figure out what is going on.
    Dr. Kolodny, I want to pick up on your comments in 
particular and have you expand. I understand that Medicaid 
beneficiaries do fill more opioid prescriptions. We do know 
that from some of the evidence out there. But I also know that 
during your time in New York City, you worked with Medicaid 
beneficiaries extensively. You served as a Medicaid provider at 
one point. Could you help this Committee understand why 
Medicaid patients, particularly individuals who qualify through 
disability and other issues related to that, would be 
prescribed more opioids? Is there something unique about the 
Medicaid population that we should be aware of?
    Dr. Kolodny. I would really like to see that data. I am not 
certain that we see far more opioid prescribing in Medicaid 
populations. One of the populations, for example, where we have 
seen very aggressive prescribing would be workers' comp. We see 
very aggressive prescribing in Medicare Part D. So we know that 
people with access to doctors and, in particular, people who 
are prone to injuries are going to be--and older people who are 
going to complain of pain are going to be most likely to be 
prescribed opioids. It is older Americans that are receiving 
the most opioid prescriptions.
    Senator Peters. Dr. Hyman, if you could talk a little bit 
about some of the work that you have done in this area and 
tracking use from folks in various medical plans as well. There 
is certainly a difference, and what we have heard here is that 
wherever there has been Medicaid expansion, there is increased 
opioid use and addiction. That may very well be a correlation, 
and correlations do exist, but it does not necessarily mean 
there is causation.
    Do you believe this is merely a correlation or is there 
also causation that Medicaid expansion has led to increases in 
opioid addiction?
    Dr. Hyman. I believe correlation.
    Senator Peters. Simply correlation. Would you elaborate?
    Dr. Hyman. Based on the evidence that I have seen, it 
appears to be correlation, not causation--I am sorry. I 
neglected my thing. Based on the evidence I have seen, I would 
classify it as correlation, not causation.
    Senator Peters. Could you expand on some of that evidence?
    Dr. Hyman. So, the first thing that you--this is a general 
observation that I tell my students. Just because A comes 
before B does not mean that A causes B. Right? You need to look 
at preexisting trends, and if you look at preexisting trends in 
the States that expanded Medicaid, you see that they had higher 
opioid usage before the Medicaid expansion, which obviously was 
2014. And so, you need to control for that prior trend in order 
to infer whether there is a sort of bump that is attributable 
to Medicaid. But even then, you need to control for other 
differences between the States that did not expand Medicaid, 
and you cannot do that just by cherrypicking individual States.
    The other thing you want to do, obviously, is look not just 
at the States that expanded Medicaid but also the States that 
did not expand Medicaid and see what happened there, and look 
at the States that expanded Medicaid that did not experience 
finding themselves at the top of the distribution of States in 
terms of their death rate. And so, just because A precedes B or 
seems to go along with B does not mean that A causes B. It is 
sort of Statistics 101.
    Senator Peters. You also talked in your testimony about 
some of the structural aspects of Medicaid, and I have heard 
directly from physicians in Michigan with concerns that 
insurers in Federal health programs in particular like Medicaid 
often have policies that limit access to less addictive pain 
medications. I think our goal should be to look for 
alternatives that are not as addictive. You mentioned the issue 
in your testimony briefly and suggested that we need to change 
the ways that we reimburse for certain pain management 
    So within our Federal health programs, how can we do more 
to incentivize less addictive pain treatments?
    Dr. Hyman. So to the extent less addictive pain treatments 
are more expensive, you are going to need to start paying for 
more expensive pain treatments rather than just the cheapest 
one, and that is an issue that, as my written testimony 
indicates, has been leveled against private payers as well as 
public payers.
    Second is you basically need to move away from an open-
ended passive payer of bills to a much more active monitoring 
role in dealing with the, thankfully, relatively small number 
of true bad actors but also creating better incentives for both 
providers and patients not to overprescribe opioids nor to 
abuse them.
    Senator Peters. Dr. Kolodny, in your written testimony, you 
talked about the need to improve access to medication-assisted 
treatments, and I have recently introduced some bipartisan 
legislation with Senators Capito and Murkowski in the Senate 
called the ``YOUTH Act,'' which aims to increase access to 
these treatments, particularly for young adults and adolescents 
who, as you know, are often precluded from receiving these 
    I would like you to comment on that and whether or not it 
is necessary for us to expand some of these treatment options 
for adolescents, who are also very susceptible to these 
    Dr. Kolodny. It absolutely is necessary, and adolescents 
are a group that may have even less access to some of the most 
effective treatments for opioid addiction because of the bias 
or stigma against treating opioid addiction with medication. 
Something I would just like to add a little more to was my 
comment about patients not having access to buprenorphine 
treatment paid for by their insurance. What is all too often 
the problem is that patients can access the medication, their 
Medicaid or their private insurance will pay for the 
prescription, but there really is not enough access to 
treatment programs that accept the patient's insurance. So with 
Medicaid expansion, I think there are people who now are on 
buprenorphine for their opioid addiction because they have 
Medicaid that will pay for that prescription, and that 
prescription may be keeping them alive, but the Medicaid 
expansion has not helped them access the visit. And if we 
really want to see overdose deaths go down, where we want to be 
is in a place where someone who is opioid addicted, when they 
get up in the morning, and they are going to need to use very 
quickly after they get up, or they are going to be feeling very 
sick. People who continue to use, it is not because it is fun. 
They are using because they have to keep using to avoid feeling 
awful. If for that individual finding a treatment center that 
can treat their opioid addiction with medication is more 
difficult, more expensive, they have to pay that doctor out of 
their own pocket, even if they have the prescription coverage, 
if all of that is more expensive than calling a drug dealer and 
buying a bag of heroin, they are going to buy the bag of 
heroin. If we want to see overdose deaths come down, we have to 
change that balance. Effective treatment for opioid addiction 
has to be easier and less expensive than buying a bag of dope 
if we want to see deaths come down.
    Senator Peters. Great. Thank you.
    Chairman Johnson. Before I turn it over to Senator Paul, I 
just want to chime in one more time.
    Put up the one chart. Again, I think I have been very 
careful. Let me repeat, I agree that correlation does not mean 
causation, but this was an analysis that we got from HHS last 
year, and what they are just trying to show is, anecdotally, 
they compared States with a similar type of demographics, 
similar type of population, expansion versus non-expansion, and 
from my standpoint the results were somewhat stark: West 
Virginia, 27 percent increase in overdoses; Mississippi, 11 
percent; Ohio, 41 percent, versus Wisconsin, 3 percent; 
Maryland, 44 percent now; Virginia, 22 percent; New Hampshire, 
108 percent, versus Maine at 55 percent; North Dakota, 205 
percent, versus South Dakota at 18 percent. Again, expansion 
versus non-expansion. Again, not saying it is causation, but it 
is this kind of information that would--and I will just ask, 
Dr. Hyman, it at least makes you curious and suggests that 
something ought to be further explored, don't you agree?
    Dr. Hyman. Oh, I certainly agree it should be further 
explored, and you have 10 States. There are obviously 50, 
    Chairman Johnson. Right. Again, this is just an analysis 
based on data, not a scientific study by any means. But you 
have other data that also says once Medicaid has been funding 
this, you throw more money into Medicaid, it might kind of help 
fuel it as well.
    Dr. Hyman. I think it is certainly worth study. I would 
note that the four States on the right have relatively low 
populations, and so even a small increase can have a big 
percentage impact. This is part of the process that you have to 
go through.
    Chairman Johnson. Right. Again, all I am saying is it is 
worth dismissing. Let us put it that way. We should not dismiss 
it. Senator Paul.


    Senator Paul. I think we can argue that the increase in 
opioids that we have seen with Medicaid expansion might be 
unintended, but I do not think we can argue that it is 
unforeseen. You can argue causation and correlation all day 
long, but if the Medicaid population was using opioids at a 
greater amount than the non-Medicaid population before the 
expansion, if you give Medicaid more money, you are going to 
see the same thing, and more money will simply exacerbate 
something. So if they were prescribing opioids at twice the 
rate before, maybe they are still doing it at twice the rate. 
So Medicaid expansion did not cause prescribers to prescribe it 
more, but if they are already doing it and you fuel it with 
more money, you are going to get more of a problem.
    So I think it is very predictable, and if you throw more 
money at Medicaid now and you do not have rules on prescribing 
or you do not have significant changes on prescribing, you are 
going to get more of the problem.
    I agree with some of the issues on Suboxone and replacement 
and rehab. All of those things would be good. But if you do not 
fix the rules on prescribing--and normally I would say this is 
a State problem and we should not be involved. But all the 
money is Federal now, so it is 100 percent Federal in the 
Medicaid expansion.
    So I guess one question I would have for the Chairman is: 
Do you have any ideas or thoughts--we want to do problem 
solving--about how we would change the prescribing habits other 
than just suggestions? I think suggestions are not enough here, 
    Chairman Johnson. Well, again, I am not the witness here, 
but actually, what I want coming out of this hearing is to 
focus on that thought process. One of the reasons I have 
written a letter to HHS, is to let us get the information, let 
us get the data, and then we can work with the experts. What 
can we do to change the prescribing methodology, those types of 
procedures so that we stop overprescribing and we can actually 
effectively address this?
    Senator Paul. Mr. Adolphsen, do you have any ideas on how 
we would change prescribing habits through law?
    Mr. Adolphsen. Thank you, Senator. There are a couple of 
things that are already in law that I think States are not 
using well. I know Maine was not when we arrived there. 
Prescription monitoring in the Medicaid program, there is a 
program called ``Lock-In'' where you restrict a Medicaid member 
to one pharmacy, one doctor, one prescriber. Those programs are 
not used very effectively or are not used extensively in 
States. There is somewhat of an obsession with access in the 
Medicaid departments around the country, I think, and so it 
seems that folks are sometimes shy to do things that might 
restrict someone from that access. But I think the Lock-In 
program is good.
    There are other controls, certainly. There is a drug 
utilization review program that is already in Medicaid, again, 
but not being used well. The bottom line is the money flows 
through Medicaid, and people, I think, view Medicaid as more 
than it is. It is really, as another witness said, a passive 
payer. And so they are not looking at a person holistically. 
And, causation, I have seen it line by line. I have seen a 
person access their welfare benefit, and a couple days later we 
see them in the data with an overdose. That is causation, and I 
think we can find that level of detail if you look at the 
States. But it needs more control.
    Senator Paul. I think, though, overall we are going to need 
a much more dramatic change in how we prescribe. I mean, Sam 
Quinones in his book talks about that it used to be physicians 
were worried about addiction, and in chronic pain we did not 
tend to use opioids as much. And some of this came from Big 
Pharma trying to change patterns of prescriptions; it came from 
within the pain community. And it came from distorting one 
study that talked about inpatient people on opioids that had 
really nothing to do with outpatient treatment and was misused 
to say that we could use opioids on an outpatient without any 
    So I think it has to be very dramatic, and I think it is 
going to have to actually be in law. As much as I am for 
freedom of the physician to prescribe stuff, if it is Federal 
money, we are going to have to oversee the Federal money, and 
we are going to have to figure out a way to say maybe other 
than terminal patients and a few other people, it needs to be 
something else. And you talk about expense. I have had a lot of 
experience with pain myself. Ibuprofen I think works in a 
fabulous way, and it is very cheap. But we have convinced 
patients that it is not good unless it is prescription, unless 
it is good stuff, unless it is a narcotic it is somehow not a 
good painkiller. But ibuprofen is a very potent painkiller, 
particularly in higher doses.
    But something dramatic is going to have to happen, and I 
promise you, if we just throw more money at this, the problem 
will get worse. We have one county in Appalachia, and we got 
rid of the really bad doctors. We have done some of the 
controls that the States have tried. And last year, I think it 
was 20,000 people got 2.8 million doses of opioids in one 
county, 150 doses per man, woman, and child. And this is after 
we have spent years in Kentucky really rooting out the bad 
doctors and doing some good things, and yet it is still an 
enormous problem.
    So I think what we have to look at, Mr. Chairman, I think 
we have to look at the money. We are in charge of the money for 
the Medicaid expansion, and we are in charge of a good chunk of 
the Medicaid program. We need to put in place some rules on 
this. There is going to have to be a dramatic change in this. I 
am not so sure OxyContin should be used for chronic pain at 
all. So, I mean, we really probably need to get away from that, 
but we cannot have suggestions. What we tend to do up here is 
we write into law suggestions, and they never happen. This is a 
real epidemic, and we are fools to sit up here and say 
causation versus correlation. People are dying in Medicaid, and 
we are giving it away for $3. If we cannot get over the fact 
that you give people free medication and then we overprescribe 
it that there is going to be a problem. We have to have 
significant rules in place.
    And, Mr. Schalk, you mentioned something about the payment 
with Medicaid, whether or not there could be more rules 
attached to how we pay people for opioids that might lead to 
improvement. Do you want to expound on that?
    Mr. Schalk. Sure. So, in addition to--I said that I 
ordinarily see the impoverished that walk through the courtroom 
doors, but I have also prosecuted a prominent medical doctor in 
my community for committing Medicaid fraud, and what that 
illustrated to me was how susceptible Medicaid patients are to 
being victims of doctors that are committing Medicaid fraud 
themselves. And I want to say, as a whole, I believe the 
medical community is well intentioned and is seeking out a 
healthier community. But as we all know, it only takes one bad 
actor in a community to really exploit an already dangerous 
    And so what we were seeing was that this doctor's Medicaid 
patients, his prescription practices were far different than 
his prescription practices with non-Medicaid patients. And due 
to how vulnerable that segment of the community is, whether 
that is through drug addiction or criminal behavior, what we 
were finding was they were being treated differently. And I 
think if you talk to any prosecutor in any part of the country, 
they are going to tell you all their defendants, they always 
have that one go-to doctor that they seek out. We call them 
``pill mills'' in law enforcement because that is really how we 
view them.
    By regulating what the doctors are doing--and just like 
you, I am all for freedom in the medical community. However, I 
think we need to hold doctors more accountable. Are there 
prescriptions in line with the treatment program? As a 
prosecutor, it is very difficult to go after a medical doctor 
that is committing Medicaid fraud because they are insulated 
under this treatment of care defense.
    However, what is the difference between a doctor that is 
prescribing pills that are not necessary and the person who is 
dealing heroin on the street? They are both making a profit by 
selling something that is not needed.
    And so I think that we need to hold our medical community 
to a higher standard as it relates to the egregious 
prescription practices. I think you are absolutely correct, 
Senator, that we have to regulate prescriptions.
    Chairman Johnson. I am going to burn up more of my first-
round time here. Your comment begs the question: How are they 
treating the Medicaid patient differently than their normal 
    Mr. Schalk. What we found was that the volume of 
prescriptions that were being prescribed, what was different 
than the non-Medicaid prescription clients--now, in the case 
that we had, it was a very intricate set of facts, but in terms 
of--they were coming in testing dirty for meth, testing dirty 
for heroin, and yet they were still being given prescription 
after prescription, and from a medical perspective, I do not 
see how that is a viable or plausible solution.
    Chairman Johnson. I want to quickly ask the doctors. We 
held a roundtable in Oshkosh, and I asked the doctors--I did 
not intend to bring this up, but it ties into this--we probably 
had a couple dozen doctors, and I just said, if there is one 
thing--this is about health care in general--if there is one 
thing that was a problem in health care, can you say what it 
was? And one doctor brought it up: Medicaid. And they all shook 
their head. And it shocked me. I said, ``Describe that.'' And 
they were talking about the high percentage of no-shows in 
appointments in Medicaid versus non-Medicaid patients. The 
reason I bring it up is because I wonder to what extent are 
doctors just giving somebody on Medicaid a month or 2-month 
supply of opioids so they do not have to schedule another 
appointment to have a no-show? Is that part of the kind of 
real-world reality that occurs? I will just ask the doctors on 
that. A legitimate question.
    Dr. Kolodny. So I do not think that the problem you are 
describing is unique to Medicaid, no-shows, for example. You 
could see it with patients with any type of insurance. I think 
there are problems that add to overprescribing that have to do 
with our health care system, so that if a doc has 10 or 15 
minutes to spend with a patient, writing a prescription is 
usually the quickest way to get the patient out of your office. 
And, it was mentioned earlier about paying for alternatives to 
treating pain with medication. It is not so much that payers 
will not cover physical therapy. But if you are a doctor with 
10 minutes to spend with a patient, finding an in-network 
physical therapist for your patient, then making that referral 
is going to take a lot more time than writing the prescription. 
And usually the patient just wants the prescription.
    So, I think we have a health care system that incentivizes 
treating lots of medical problems with a prescription pad.
    Chairman Johnson. Well, again, across the board patients do 
not pay for the products they get, by and large.
    Dr. Hyman, do you want to quickly chime in? Then we will go 
to Senator Lankford.
    Dr. Hyman. Yes, I certainly agree that writing a 
prescription is often an easy way to bring the clinical 
interaction to a close. I have also heard from many physicians 
about frustrations of dealing with Medicaid. Sometimes that is 
about the populations covered by Medicaid. Sometimes that is 
about the Medicaid program itself, which has bureaucratic rules 
and often pays slow and not very much. And that is at least the 
perception among physicians.
    Chairman Johnson. Thank you. Senator Lankford.


    Senator Lankford. Thank you, Mr. Chairman.
    Let me bounce several questions and give you a practical 
example of this, what we have talked about already. In 
Oklahoma, there is currently a physician going through the 
process right now that saw 90 patients a day and was writing 
narcotics 'scripts to almost every one of them as they came 
through. Ninety a day, on average, between 15 to 30 seconds per 
person that he actually saw them before he was writing a 
'script. So it is an issue that we have to resolve, and 
obviously locating these individuals and then identifying them 
and prosecuting them becomes exceptionally important.
    I have a different angle on this that I want to be able to 
bring up. Mr. Schalk, you brought up in your testimony about 
Suboxone. You brought that up as well. The question I have is: 
In your testimony you had mentioned that that is being 
diverted. That is a drug designed to be able to help people get 
off of narcotics. That is now being diverted to being on the 
street as well as a narcotic. Can you talk me through what you 
are seeing there?
    Mr. Schalk. Yes, well, first, I am not an expert in 
addiction, but from a street-level prosecutor, we see Suboxone 
being heavily trafficked in our community.
    Now, the flip side of that is we see other forms of opiate 
treatment, like Vivitrol, for instance, it is an injection, and 
we see the success rates far higher in our community with those 
having an injection as an opioid blocker as opposed to 
Suboxone. That is not taking away from the benefits of 
Suboxone, but I can tell you in southern Indiana, it is heavily 
trafficked illegally.
    Senator Lankford. OK. Any other comments on that? Go ahead.
    Dr. Kolodny. I think that the diversion of Suboxone onto 
the black market needs to be understood. Many of the 
individuals who are buying Suboxone on the black market are 
using it in a somewhat self-therapeutic way, and I think with 
diversion of opioids onto the black market, there are really 
two things that you have to think about and that we would have 
to be concerned about.
    One is whether or not the diverted opioids onto the black 
market are causing new cases of addiction or more people 
becoming addicted because of that diversion, which, if that is 
happening, it would be making our opioid addiction epidemic 
    And the other thing you would want to be concerned about is 
whether or not the diverted opioid is contributing to overdose 
deaths. In the case of diverted buprenorphine, buprenorphine is 
a very different type of opioid. A young person who is 
interested or curious about experimenting with opioids, if that 
young person makes the mistake of experimenting with 
buprenorphine, they are very likely to have a bad reaction to 
that drug, and it is not like they are going to be feeling 
lousy for a few hours and then they go home at the end of the 
party. It is a very long-lasting drug. They are likely to feel 
very sick. They are likely to not want to do that again.
    Where you can see people get a euphoric effect from 
diverted buprenorphine is if they are an experienced opioid 
user and they have been off of opioids. Then they can feel good 
about it.
    So I do not think that diverted buprenorphine is becoming a 
recreational drug causing new cases of addiction. And one of 
the unique properties of buprenorphine is that it is quite hard 
to overdose on. It has a ceiling on its effect. So even a 
patient who takes an extremely large dose or someone trying to 
get high by taking extra doses is unlikely to overdose, is 
unlikely to have respiratory depression. So I think the 
existence of this black market for buprenorphine has more to do 
with the fact that we are not making that treatment available 
to the people who need it.
    Senator Lankford. OK. Thank you, by the way.
    Senator Paul was mentioning as well that we are trying to 
figure out some way to be able to actually come up with some 
solutions in the process of this. Mr. Adolphsen, you had 
mentioned about pharmacy lock-ins. Oklahoma uses that, my 
State. Has that been successful? Not successful? What have you 
seen in locations like that?
    Mr. Adolphsen. So my impression of it, Senator, is that it 
is being used in a number of States, but not very aggressively. 
So you might find in a State with hundreds of thousands of 
people on Medicaid, a couple hundred people in the lock-in 
program because the parameters of----
    Senator Lankford. They are identifying high risk.
    Mr. Adolphsen. Yes, the parameters are designed, though, 
again, with access in mind. They do not want to----
    Senator Lankford. OK. What about States experimenting with 
limiting dosage for opioids?
    Mr. Adolphsen. I can say in my State of Maine we were very 
aggressive a couple years ago in limiting both the strength and 
length of prescriptions. It was not without controversy, but 
the early data coming back from Maine is that it has been very 
    Senator Lankford. What about electronic prescriptions 
rather than paper prescriptions for opioids?
    Mr. Adolphsen. In that same law that was passed in Maine, 
they did a required prescription monitoring program requiring 
docs to enter it each time. Again, not without controversy, but 
it has so far early on proven to be helpful.
    Senator Lankford. Obviously, there was a question on cost 
on that for physicians. There is a difference in input in 
personnel time to be able to do it as well as the equipment 
itself to be able to do it in the system. What have you seen on 
that versus what was threatened to be what the cost is and what 
the actual cost is in the transition?
    Mr. Adolphsen. I do not have the exact cost, but I know at 
the department level we provided free training. We used the 
number of grants that we had for fighting the opioid crisis in 
order to help educate doctors, go into a hospital, help set it 
up. I think that is probably something that is a good thing to 
do, help on the cost side. But, it is an administrative burden, 
but I would argue probably one that could be worth it in this 
    Senator Lankford. Mr. Tyndall, did you all experiment with 
any of that in Tennessee?
    Mr. Tyndall. Yes, sir. Senator, thank you for the question. 
We started our monitoring database in 2006. We did not have 
anything before that, and we started it in 2006, and we have 
had a number of enhancements since then. And it is free to all 
physicians. Any medical provider that is enrolled, it is free 
of charge. And now we have had some enhancements where it is 
mandated that every medical professional has to enroll into the 
system as well as the pharmacist. So we monitor any drug 
prescribed or dispensed in the State of Tennessee, two through 
four. It is somewhat similar to the Kentucky All Schedule 
Prescription Electronic Reporting (KASPER) program in Kentucky, 
and that is the only State we kind of communicate with.
    Senator Lankford. That was actually my next question. Is 
there cooperation with other States and sharing that 
information? If you live in Memphis, that is very different 
than a number of States that you might have the opportunity to 
be able to go outside of the State to be able to use it.
    Mr. Tyndall. Right. There are eight States that border 
Tennessee, and the only one that we really communicate with is 
Kentucky. We have a reciprocal agreement, I guess, to share the 
monitoring of prescription drugs two through four.
    Senator Lankford. But they could not use, for instance, 
Medicaid, which is just part of what we are talking about 
today, but the Medicaid portion of it, they could not use in an 
out-of-State pharmacy, or they could?
    Mr. Tyndall. There are a number of rules, exceptions to all 
of that. Sometimes if it is an emergency and you are out of 
State, you can use your Medicaid benefits to do that. But I am 
not sure about all those exceptions that go with that.
    Senator Lankford. One last quick question. If you are 
buying Sudafed in Oklahoma, you have to be able to show a 
driver's license to be able to do that, and it is tracked on 
just the usage of Sudafed regardless of where you get that. Is 
there any system like that that has been discussed or is in 
place on narcotics?
    Mr. Tyndall. Very similar in Tennessee. You have to sign a 
log and produce a photo ID to get Sudafed.
    Senator Lankford. What about for narcotics?
    Mr. Tyndall. Part of our Controlled Substance Monitoring 
Database (CSMD) now, you have to present an ID when you pick up 
any kind of narcotic from the pharmacy. You also have to do 
that as well.
    Senator Lankford. OK. Thank you.
    Mr. Tyndall. And one more thing, if I could add. Effective 
yesterday, with few exceptions TennCare will only pay for a 15-
day supply of opioid medication within a 6-month period. So we 
have reduced it significantly to get opioids for a 6-month 
period in Tennessee.
    Senator Lankford. OK. Thank you.
    Thank you, Mr. Chairman.
    Chairman Johnson. Senator Jones, you are next in line for 


    Senator Jones. Thank you, Mr. Chairman.
    Having come from a State that did not expand Medicaid and 
probably has one of the most restrictive Medicaid eligibility 
requirements in the country, we still have an incredible opioid 
problem. And I appreciate Senator Paul's comments because what 
I am seeing in Alabama is a prescriber problem more than 
anything else. And I am curious, having been an old prosecutor 
myself, Mr. Schalk, can you give me an idea of--and I know this 
may be difficult, but how many of those folks that are being 
prosecuted for taking those prescriptions and selling the pills 
or doctor shopping, do you have an idea, a sense of how many of 
those people actually started out addicted to those opioids and 
they need the money and that is driving it, as well as just 
being generally impoverished?
    Mr. Schalk. Sure. I think certainly addiction plagues the 
criminal justice system, and we often throw around the term 
``drug dealer'' very loosely. And we have many kinds of drug 
dealers in the criminal justice system. We have those that deal 
for profit, and then we have those that deal to feed their own 
    Senator Jones. Right.
    Mr. Schalk. I would say those that deal to feed their own 
addiction make up the overwhelming majority of those that are 
in our prisons.
    Senator Jones. So if that is the case, do you have a 
process in place when you arrest somebody, do they get 
treatment? Is there a drug court or something like that that 
you can put these folks in to try to keep them out of the 
system a little bit better but to try to deal with that 
addiction so there is not recidivism?
    Mr. Schalk. We are blessed in my county to be small enough 
to have a tailor-made program for many of the individuals that 
are coming through the criminal justice system. If you go just 
a few minutes down the road to Louisville, which is, obviously, 
a much larger metropolitan area, it is much more streamlined. 
They just simply do not have the resources or ability. And so, 
yes, I think being able to make a tailor-made treatment program 
for an individual is a key ultimately to their success, and 
that includes--and a lot of time defendants do not want to hear 
this--being sober. And when you are struggling with opiate 
withdrawals, in my opinion, the best place sometimes to 
experience those are within a jail where we know you are going 
to be sober, you are not going to go out, and you are not going 
to use again.
    But once we can have 90 days of sobriety, at that point we 
can then start exploring options, treatment programs that are 
    Senator Jones. I have also noticed in some of the charts 
that we have seen, I guess, there seems to be--the private 
payers seem to be doing a little bit better in terms of the 
opioid problem. What are the private payers doing differently 
than Medicaid that Medicaid can learn from to try to stem the 
prescriptions to begin with, which I think is a big problem? I 
will just throw that open to anybody that might have a proposal 
or an answer.
    Dr. Kolodny. The explanation for why in the past few years 
we are seeing, for example, less hospitalizations paid for by a 
private insurance versus Medicare involving opioid overdose is 
not really clear. It is possible, as your question suggests, 
that there are things that the private payers are doing that 
maybe Medicare or Medicaid should replicate. I am not sure that 
that is the case. In the past couple of years, we have seen 
commercial private insurance companies begin to implement 
policies to promote more cautious prescribing, but it has been 
pretty new.
    One possibility is that for people who become opioid 
addicted who fall out of the workplace because of their opioid 
addiction and become poor because of their opioid addiction, 
they may more likely wind up insured by Medicaid and fall out 
of the private system. So it is hard to say why we might see a 
greater problem in people insured by Medicare or Medicaid.
    Senator Jones. All right. Yes?
    Mr. Adolphsen. Senator, I think it is because they are 
trying. Cigna announced that they pledged to lower prescription 
painkillers by 25 percent in 3 years. So they have acknowledged 
they have a role here that they might be playing in this issue. 
So I think Medicaid has acknowledged that, and it is a little 
ironic because Cigna is using the CDC's guidelines--the CDC 
right down the street from Medicaid--but they have not seemed 
to get together on it. So I do think there is a level of 
acknowledgment and effort that the private insurers have made.
    Senator Jones. What about the role of the prescription drug 
companies that are manufacturing these opioids? What role 
should they play?
    Dr. Kolodny. Well, something that the manufacturers of 
opioids should stop doing and I think something the Food and 
Drug Administration (FDA) could require them to stop doing if 
it properly enforced the Food, Drug, and Cosmetic Act (FDC), 
they should immediately cease promoting opioids for chronic 
pain. As Senator Paul mentioned earlier, opioids have not been 
shown to be safe and effective for long-term use for common 
chronic conditions like low back pain, fibromyalgia, chronic 
headache. These are good medicines to ease suffering at the end 
of life. They are good medicines when you are using them from a 
couple of days after major surgery. But for daily long-term 
use, they may be more likely to harm the patient than help the 
patient. Right now we have a law that says that drug companies 
are only allowed to promote products for conditions where the 
benefits are likely to outweigh the risks, and those 
conditions, they become the indication on the label. And if the 
company gets caught promoting use not on the label, they get 
into trouble. The label on opioid analgesics is very broad, 
which has allowed the manufacturers to promote for conditions 
where we really should not be prescribing opioids.
    Senator Jones. Does anybody else want to take a shot at 
that? Otherwise, Mr. Chairman, that is all I have. Thank you.
    Chairman Johnson. I just wanted to quickly follow up. That 
is a problem with FDA approval on that particular drug, right, 
too expansive an approval?
    Dr. Kolodny. Yes, I mean, if we could go back in time to 
the introduction of OxyContin, if FDA had properly enforced the 
Food, Drug, and Cosmetic Act, they would have told Purdue, 
``Great, you have extended-release oxycodone. That sounds like 
a good drug for cancer patients. We are going to let you send 
your sales force to the hospices and to the oncologists and to 
palliative care doctors.'' FDA did not do that. And there would 
not have been that much money for Purdue to make if their 
product had only been prescribed to patients at the end of 
life. So they promoted broadly, and FDA allowed it. But with 
every manufacturer of opioids, they have done the same thing 
because the big market is chronic pain. Millions of Americans 
suffer from chronic pain. That is where they are going to make 
their money, and so that is what they have been promoting use 
    Chairman Johnson. Well, it is never too late for the FDA to 
change it.
    Dr. Kolodny. That is correct, and our new FDA Commissioner 
may be finally the FDA Commissioner to do that. He has 
certainly made some statements leading us to believe he may 
take some of the steps necessary.
    Chairman Johnson. OK. I will follow up later.
    Dr. Hyman. If I could just add, I would point out once the 
FDA approves a drug, physicians can use it for off-label 
indications. They do not require the FDA's permission. And once 
it has been approved, notwithstanding some people's views on 
the scope of the FDC, there are serious constitutional 
questions raised by attempts to prohibiting pharmaceutical 
companies unless they are engaging in false and misleading 
    Chairman Johnson. OK. Senator Harris.


    Senator Harris. Thank you.
    Dr. Kolodny, I was struck by your fourth slide which showed 
that hospitalizations for opioid overdose are increasing most 
rapidly, as you have mentioned, in Medicare but also increasing 
for people with private insurance and people without insurance 
and people with Medicaid. These facts make it clear, to me at 
least, that diversion is a risk regardless of the type of 
insurance coverage a person may have.
    To follow up on this conversation, in 1996 Purdue Pharma 
released OxyContin, an opioid that they falsely claimed would 
deter addiction, as you have mentioned. In the 5 years from 
1997 to 2002, OxyContin prescriptions grew from 670,000 to 6.2 
million. And overall sales of prescription opioids increased 
roughly four times between the years of 1999 and 2014.
    A number of Senators--Senator Claire McCaskill and myself 
included--have ongoing investigations of drug companies and 
distributors who helped cause and exacerbate the opioid 
epidemic. To that end, you have mentioned a bit about what the 
FDA responsibilities are. Can you talk about what you believe 
Congress can do to hold pharmaceutical companies responsible 
for its role in causing the opioid epidemic?
    Dr. Kolodny. That is a really good question. I think one 
thing that Congress could do is hold FDA's feet to the fire 
through your oversight role of FDA because FDA really has 
failed to properly enforce the laws and has allowed opioid 
manufacturers to improperly promote opioids.
    I do think that I am very pleased by your investigation and 
Ranking Member McCaskill's investigation of the role that 
manufacturers have played. I do want to point out, though, that 
Senator Grassley and former Senator Baucus launched a similar 
investigation in 2011. The Senate Finance Committee began an 
investigation, and the Senate Finance Committee has yet to 
release its findings from that investigation. So I think, 
making those findings public would be very helpful, I think, 
for changing the behavior of the manufacturers. Many of the 
organizations or front groups that they give money to, they are 
continuing to fund, and they are front groups that are blocking 
Federal and State efforts to promote more cautious prescribing. 
The Associated Press and the Center for Public Integrity did 
investigations showing that the opioid lobby, the 
manufacturers, the distributors, have spent more than $880 
million over the past decade blocking efforts to promote more 
cautious prescribing, and I think the findings from these 
investigations may make it more difficult for them to continue 
doing that.
    Senator Harris. And you mentioned front organizations. Can 
you talk about who and what they are?
    Dr. Kolodny. These would be organizations that in some 
cases are pure AstroTurf organizations created by industry----
    Senator Harris. AstroTurf, what do you mean?
    Dr. Kolodny. AstroTurf is an organization meant to look 
like a grassroots organization, but it has been artificially 
created by industry. One of the organizations that was very 
damaging was the American Pain Foundation, which was an 
AstroTurf organization. That shut down on the day that the 
Senate Finance Committee launched its investigation.
    There are also medical societies, professional 
organizations that ``front group'' might be a bit strong, but 
that take very significant funding from opioid manufacturers 
and promote the interests of opioid manufacturers rather than 
the interests of patients. So, for example, the American 
Academy of Pain Medicine and the American Pain Society have 
promoted very aggressive prescribing of opioids and have really 
come to the defense of manufacturers every time efforts are 
raised that could potentially better regulate them.
    Senator Harris. Thank you, and I plan to follow up on your 
suggestions. Thank you.
    Medicaid is, of course, one of the leading sources of 
substance abuse treatment, covering about one-third of opioid 
addiction treatment. In June of last year, I toured and met 
with the patients at the Martin Luther King, Jr. Outpatient 
Center in Los Angeles. I will tell you that Medi-Cal pays for 
70 percent of the care there.
    The nonpartisan Government Accountability Office found that 
Medicaid expansion increased access to substance abuse 
treatment, and the Urban Institute found much more rapid growth 
in spending on opioid treatment medications and overdose 
reversal medications in States that expanded Medicaid, 
suggesting, of course, that more of those who need treatment 
are getting it thanks to Medicaid expansion.
    The President's own opioid commission called for the 
expansion of Medicaid by having the administration grant 
waivers for all 50 States to eliminate barriers within the 
Medicaid program in order to help more people have access to 
    My question is: If Medicaid funding is cut, what happens to 
the one in three people who receive treatment under Medicaid 
for opioid addiction?
    Dr. Kolodny. So I think that there are individuals right 
now who are, thanks to Medicaid expansion, alive, who are 
having their opioid addiction effectively treated. If they were 
to lose Medicaid coverage, for example, I think that there 
would be a very high likelihood that these individuals would 
relapse, and if relapsing, a high likelihood that they could 
die from an overdose.
    We have an exceptionally dangerous black market opioid 
supply. We have never had heroin as dangerous as we do today 
because of fentanyl that is in it or fentanyl that is sold as 
heroin. A relapse is not a benign event. One relapse can be 
fatal. And if patients lose health coverage that is paying for 
their addiction treatment, they are at very high risk for 
relapse and loss of life.
    Senator Harris. Thank you. And, Mr. Schalk, I appreciate 
your comments as a fellow prosecutor. I think we both 
appreciate--and certainly your work has pointed this out--that 
one of the best ways that we can be smart on crime is to follow 
what the public health model has taught us, which is if you 
want to deal with an epidemic, be it drug, crime, or health, 
one of the most effective and smartest and efficient ways to 
deal with it is not reacting after but actually preventing 
before these crimes occur. So I appreciate your comments and 
the work that you have done highlighting that point.
    Mr. Schalk. Thank you, Senator.
    Senator Harris. It is in the best interest of public safety 
and also taxpayer dollars.
    Mr. Schalk. Thank you.
    Senator Harris. Thank you, Mr. Chairman.
    Chairman Johnson. Senator Hoeven.


    Senator Hoeven. Thank you, Mr. Chairman.
    I expect that each of you have looked at Chairman Johnson's 
chart\1\ on the rise in overdose deaths increasing from 2013 to 
2015, and also comparing the number of overdose deaths in 
expansion and non-Medicaid expansion States. So I would ask 
each of you, starting with Mr. Adolphsen. Thank you for putting 
the chart up. To what do you attribute it? What is causing it? 
What should be done about it?
    \1\ The chart referenced by Senator Hoeven appears in the Appendix 
on page 86.
    Mr. Adolphsen. Thank you, Senator. I think we have heard 
from a number of folks, not just in this hearing but in 
previous hearings, that we have a real supply side problem on 
opioids. And I think when you are in a hole, you stop digging. 
And expansion has really opened the door to a massive increase 
in these opioids in the market on the supply side. So I think 
when you look at a State that has expanded, that has added 
hundreds of thousands of people who suddenly are not just 
eligible for the treatment that we have heard about but they 
are also eligible to receive no-cost prescriptions, you are 
inevitably driving up the supply of this into the market.
    Senator Hoeven. And what should be done?
    Mr. Adolphsen. Well, I think there are some options. One of 
the things that ought to be considered is maybe disconnecting 
substance abuse treatment from the rest of the benefit. So, for 
example, there obviously are millions of Americans out there 
who need substance abuse treatment. No one would argue that 
fact. However, is it best delivered with an entire Medicaid 
package that includes access to more opioids? And that is 
really the problem that I saw, was we had folks over on one 
side of the house getting treatment, and those same folks were 
still getting opioids that caused the addiction in the first 
place. And those two kind of butt heads.
    So I think it does not necessarily have to be one without 
the other. The substance abuse treatment should be very 
targeted and focused and not necessarily come with all of these 
unintended consequences.
    Senator Hoeven. Mr. Schalk?
    Mr. Schalk. Senator, looking at these numbers, what is 
clear to me is when we give more prescriptions, when we give 
greater access to those that are most susceptible to addiction, 
that are most susceptible to the criminal justice system, at a 
certain point they are going to transition from these opioids 
that a doctor is prescribing, and they are going to start 
seeking their high from somewhere else. Perhaps that is because 
the doctor said, ``I am no longer going to write you a 
prescription. I cannot justify this.'' At a certain point, when 
they transition from the pills that their doctor is prescribing 
them, they transition from there to fentanyl and heroin laced 
with fentanyl, that is where these deaths are coming from. It 
is from injecting heroin after--and no one just starts on 
heroin. It is a progression. And almost without fail, before 
someone begins down the path of injecting heroin, they are 
abusing their prescription pills. And I think just looking at 
the fact when we are making these prescription pills more 
readily available to a greater segment of our population, this 
is what happens.
    Senator Hoeven. And what should be done?
    Mr. Schalk. I believe that while this is a multifaceted 
issue, we need to hold the medical community more accountable, 
would be one key aspect, as it relates to their prescription 
practices. We are giving doctors in many ways complete 
discretion to prescribe synthetic heroin, and that is a lot of 
power. And so I think we need to take a closer look at the 
prescription practices. Are they in line with the treatment 
plan? Are they improving quality of life? And if those answers 
cannot be met, then we need to hold the doctor accountable as 
to why were they prescribing this unneeded and unnecessary drug 
to this individual?
    Senator Hoeven. Mr. Tyndall?
    Mr. Tyndall. Thank you, Senator. And I do not know that I 
could speak to expansion and non-expansion. That is probably 
above my pay grade in Tennessee, but certainly I think that the 
more people who have access to low-cost and no-cost 
prescription drug medication, the probability of drug-seeking 
behavior and prescription drug diversion increases.
    Senator Hoeven. What would you do?
    Mr. Tyndall. Well, I think there ought to be penalties if 
you are involved in drug-seeking behavior or selling your 
medications, especially by Medicaid. The penalties need to be 
more severe for that.
    Senator Hoeven. Dr. Hyman?
    Dr. Hyman. So I would echo what has been said about the 
supply side aspects, that, there are physicians who will write 
prescriptions for opioids, and there are patients who will take 
them and get those prescriptions filled. And that is a gateway 
for some of them to more severe drugs once they are cutoff.
    I think on the solution side, so far we have talked a lot 
about the patient and doctor shopping. It is important to 
recognize, as I said at the outset, it takes a physician to 
write the prescription. And so we ought to be looking for 
outliers in the frequency of prescribing, both relative to the 
patients that they are seeing and also relative to the doses 
that they are basically writing on the prescription pad. And, 
you may be an outlier because you are in the pain management 
business and you see a population of patients that badly need 
pain management. Or you may be an outlier because you will 
basically write a 'script for everybody who comes through the 
door. My suggestion would be not necessarily criminal sanctions 
as your starting point, given the difficulties that Mr. Schalk 
has already talked about, but some combination of financial 
incentives and licensure sanctions. State medical boards ought 
to be more active in this space.
    Senator Hoeven. Dr. Kolodny?
    Dr. Kolodny. So I think this is an interesting association, 
and it is worth investigating to see if this really holds out 
if you were to compare the specific timeframes of Medicaid 
expansion, were to look at States, and it is certainly worth 
looking at.
    I do believe that we have a good understanding of why the 
opioid addiction epidemic is getting worse and why in States 
where it has gotten much worse, why that happened.
    Something that is important to understand is we have two 
groups of Americans who are opioid addicted: we have a younger 
group and an older group.
    The older group are people who are becoming opioid addicted 
mostly through medical treatment. That older group has not been 
turning to the black market. They are getting opioids 
prescribed to them for chronic pain. Up until around 2011, we 
were seeing most of the overdose deaths in older people getting 
pills prescribed to them by doctors. It is possible in that 
older group, because prescribing has become a bit more 
cautious, overdose deaths may be stabilizing, coming down a 
    The younger group are people in their 20s, 30s, and early 
40s, they are becoming opioid addicted from using prescription 
opioids, either medically or recreationally, or sometimes a 
combination of both. That younger group, when they become 
opioid addicted, has a hard time maintaining their supply 
visiting doctors. Doctors and dentists, as we have been 
discussing, are too comfortable giving young people lots of 
opioids, but we do not like to give healthy-looking 25-year-
olds a large quantity on a monthly basis. So the young person 
who becomes opioid addicted winds up on the black market. The 
pills are very expensive on the black market, and something we 
have seen happening steadily over the past 20 years is a rising 
use of heroin in these young people who wind up on the black 
market and switch to it because it is much cheaper.
    Beginning in around 2013, overdose deaths in this younger 
group, in the group that has been switching to the black 
market, the group that has been using heroin, overdose deaths 
are soaring because of fentanyl, because the heroin supply is 
so dangerous right now. I think that is really the primary 
driver. I do not believe it is Medicaid expansion. I do not 
think Medicaid expansion is helping us as much as it could in 
terms of addiction treatment because the services are not 
there. I think people are getting their prescription paid for.
    So we have to do a lot more if we want to see overdose 
deaths come down, but I do not believe that overdose deaths are 
rising because of Medicaid expansion. I think it is fentanyl 
that is causing the very sharp rise that we have seen in recent 
    Senator Hoeven. Thank you.
    Thank you, Mr. Chairman.
    Chairman Johnson. Senator Daines.


    Senator Daines. Mr. Chairman, thank you. And I want to 
thank the Chairman for producing this report. It raises some 
serious questions about whether Medicaid expansion is having a 
counterproductive impact on the opioid epidemic by 
proliferating prescription opioid pills. I come from a State 
that is an expansion State, the State of Montana. I am 
particularly concerned by the report's exposure of how Medicaid 
expansion dollars have resulted in addiction among some 
recipients and facilitated illicit distribution of these drugs 
to others struggling with substance dependence. In short, the 
report provides, I would argue, a more complete picture on the 
consequences of Medicaid expansion, and we must not ignore its 
    The first question is for Mr. Adolphsen. You mentioned in 
your testimony that 52 percent of able-bodied adults on 
Medicaid do not work and that only 16 percent work full-time. 
Can you share more about the positive correlation that you have 
found between having a job and reducing drug dependency among 
healthy working-age Americans?
    Mr. Adolphsen. Thank you, Senator. That is right, that data 
that you referenced is very clear. The number of able-bodied 
adults on Medicaid has quadrupled from 7 million in 2000 to 28 
million today. Half of those do not work at all. We know from 
the addiction specialists, the recovery community, that work is 
a pillar of recovery, and certainly in a program that is paying 
for the amount of substance abuse treatment that Medicaid is, 
we think it makes a lot of sense to encourage and assist people 
getting back to work.
    Unfortunately, that is not what we see. We are seeing the 
rolls, particularly for able-bodied adults, continue to grow, 
and many of those people are not working at all.
    Senator Daines. Are you aware of what percentage of able-
bodied Medicaid recipients actually return to full-time gainful 
    Mr. Adolphsen. Well, what we are seeing is enrollment 
continue to go up, so if they were moving into full-time 
employment, if you work even at minimum wage full-time, you are 
out of poverty. So if folks were quickly getting back in the 
work force, working a full-time job or a couple part-time jobs, 
they would quickly cycle off of Medicaid because they would be 
earning income above the threshold. That is just not what we 
are seeing. We are seeing folks come on to the program, stay on 
the program. So, unfortunately, that is an indicator that has 
not been successful at returning people to work the way we 
would like to see.
    Senator Daines. Why is that? What do you see? It is usually 
all about incentives. What is the incentive to stay on Medicaid 
versus move and become gainfully employed?
    Mr. Adolphsen. Sure, there are probably a lot of things 
that go into that, but I think one thing we probably can all 
agree on is we all need deadlines and a push in our life to 
accomplish certain things, and Medicaid has been free of any 
requirement for kind of community engagement or work 
activities. That has not been a hallmark of the program, which 
historically might have made more sense when there were not 
able-bodied working-age adults on the program. But as I 
mentioned, that number has grown dramatically with the 
expansion under ACA, and I think that kind of incentive 
structure is needed within the program to help clear that 
pathway and encourage people to get back into the workforce or 
into training or volunteering and community engagement.
    Senator Daines. Medicaid has been held up as a cure-all 
silver bullet for opioid treatment, which, by its own right, is 
critical to helping addictions. However, the evidence seems to 
suggest that Medicaid is a two-edged sword by proliferating 
prescription opioid pills due to the ease of access. There is 
always going to be leakage of diverted prescription opioids 
with or without Medicaid expansion. I think we probably would 
all agree with that.
    Mr. Adolphsen, what makes those eligible under Medicaid 
expansion more susceptible to facilitating illicit drug 
    Mr. Adolphsen. Thank you, Senator. I think we have heard a 
lot of great examples of that here in the testimony, the 
temptation to turn a free prescription into several thousand 
dollars in those types of things. I know one of the disconnects 
I saw in our Medicaid program in Maine was someone would have 
this access to Medicaid, and they might come into substance 
abuse treatment possibly, funded by Medicaid. But the success 
rate, unfortunately, is not very high in some of those 
programs, typically under 30 percent, sometimes in the teens. 
It is a difficult addiction to beat, so it is tough.
    So what happens, if somebody is in treatment for, say, a 
week or a couple of weeks even, but then they come out of 
treatment, and they still have the rest of their Medicaid 
benefit, they still have their full pharmacy benefit, they 
still have access to some of these other more dangerous drugs 
that may have led them into the addiction in the first place.
    So I think we need to do a better job of connecting those 
two dots within the program.
    Senator Daines. So when you look at those individuals who 
are getting hooked on diverted drugs--we have kind of been 
looking at the balance here of those coming on, those coming 
off. Do you believe that more individuals are getting hooked on 
diverted drugs than successfully completing opioid treatment?
    Mr. Adolphsen. Yes, 12.5 million self-reported opioid abuse 
last year, painkiller abuse last year, and I think we heard 
from another witness already that something like a couple 
million people are trying to get into treatment. So it is 
pretty clear that on the supply side, the number of people 
misusing or becoming addicted is growing and outpacing the 
number of folks that are going into treatment and completing 
    Senator Daines. Mr. Schalk, in your experience as a 
prosecutor, and, Mr. Tyndall, as the Tennessee IG, you both 
have indicated the extent of Medicaid prescription fraud is 
unknown due to underreporting and other barriers. How expansive 
do you think the fraud might be?
    Mr. Schalk. Staggering. Based on the limited numbers that 
we see as opposed to what we know is going on, what we see is 
going on, I believe that if we were to look at the amount of 
Medicaid fraud that was happening just in my own community, 
Members would be outraged.
    Senator Daines. So ``staggering'' is a strong word. 
``Outraged'' is a strong word. I guess maybe it goes back to my 
background in chemical engineering. I tend to be more of a 
quantitative guy. I know the Chairman is a numbers guy, too. Do 
you have any sense of kind of trying to quantify the size of 
the bread box here without--``staggering'' is related--there is 
something in your mind saying it is large. Can you maybe try to 
quantify that for us?
    Mr. Schalk. To sit and quantify with a number I would not 
be able to do. I can only ascertain from my own experiences 
that I see from an investigative side, from a courtroom side. 
Unfortunately, Senator, I am not able to sit and quantify with 
a particular number.
    Senator Daines. Mr. Tyndall?
    Mr. Tyndall. Thank you, Senator. I can only echo what Mr. 
Schalk just said. I have to cover 95 counties in Tennessee. I 
have 14 agents. I have not had 100 percent of everybody 100 
percent of the time, and we stay pretty busy just working the 
cases that we are aware of.
    Senator Daines. So what steps would you advise Congress--
this is a great opportunity for you all to put it in the record 
here and instruct this Committee. What would you advise 
Congress, the States, or CMS do to take up, to address this 
problem? A couple things.
    Mr. Schalk. Well, as has been echoed throughout this 
hearing, I believe that reexamining the prescriptions that are 
being written is an essential element to being a key part of 
the solution. And, obviously, when doctor bills are being 
submitted through Medicaid, it is no secret that the checks and 
balances are far less than when they are being submitted 
through a for-profit payer.
    So, with that, I think when we are looking at 
prescriptions, is this prescription being written to pad a 
Medicaid fraud on behalf of the doctor? Again, is this 
prescription improving quality of life? Is it medically 
necessary? Is it within the scope of the treatment? And, 
frankly, can I go and get an over-the-counter that can be just 
as effective? As Senator Paul said, ibuprofen is very 
effective. However, an overwhelming majority of the people that 
come through my courtroom, they do not believe ibuprofen is 
appropriate. They believe they need a high-powered painkiller. 
And I think we need to as a society take a step back from that 
and say ibuprofen sometimes is appropriate. Now, it is not 
always appropriate, and I recognize that. But I think 
recognizing that ibuprofen is appropriate more often than not 
is a good step toward reducing this problem.
    Senator Daines. I am out of time. Mr. Chairman, thank you 
for allowing me additional time.
    Chairman Johnson. Well, I will say I want to finish up with 
my questions here. I am going to ask the exact same questions. 
So each one of you, if you had one recommendation in terms of a 
law change that would help solve this crisis, I will give you 
the opportunity to address that as well. But thank you, Senator 
Daines, for your questions.
    I want to start with the two doctors and just ask a 
question. Why did it take so long for the medical community to 
just recognize the extent of the opioid addiction? Why did you 
not have the feedback loop? You have ongoing education. You 
have your medical journals. I mean, why did it take so long? 
And why did it take this epidemic just bursting onto the scene 
here before--and I am not even sure all doctors are aware of it 
still. I hope they are, but we----
    Dr. Kolodny. Yes, I----
    Chairman Johnson. Well, let me finish up. We held a 
roundtable in Wisconsin, and that is when I was shocked that 
you had an entire generation of doctors trained that these were 
not a problem. Again, that goes to marketing or whatever. But 
why wasn't this known really within a couple years?
    Dr. Kolodny. Yes, that is a great question. I think for 
many years the feeling in the medical community and even the 
position of the American Medical Association (AMA) was that the 
opioid problem was about the bad apples, that there were some 
doctors out there that are really drug dealers running pill 
mills, and that there are some people out there pretending to 
be patients but they are really drug abusers and they want to 
get their hands on these drugs, and that the opioid crisis had 
nothing to do with well-meaning doctors taking care of their 
legitimate patients. I think that was the thinking for quite a 
while when the reality is that the opioid crisis is really 
driven by well-meaning doctors who have been overprescribing to 
patients, getting patients addicted, but also indirectly 
causing addiction by stocking homes with a highly addictive 
drug, creating customers for the drug-dealing doctors, the pill 
mills, for the diversion and the fraud. So the bigger problem 
has been the well-meaning doctors.
    I think part of the problem is it is not just the medical 
community, but policymakers really for many years failed to 
look at the root of the problem, which was overprescribing. 
Instead, what they accepted was the way industry had been 
framing the problem and the way that the pain organizations 
funded by industry were framing the problem. What policymakers 
such as yourself were told was that all of this bad stuff that 
you are hearing about involving opioids, that is the drug 
abusers. There is a subset of our population that wants to get 
high off of drugs, and maybe because doctors are prescribing 
more, the drug abusers are getting their hands on these drugs. 
And, yes, we should do something about the drug abuse problem 
and diversion, but let us not forget that tens of millions, a 
hundred million Americans have chronic pain, they are being 
helped by these medicines, and that your job as a policymaker 
is to balance these two competing problems. You want to do 
something about the pain problem and do something about the 
drug abuse problem, but do not make the pain problem worse, do 
not punish the pain patients for the bad behavior of the drug 
abusers. So it was framed as if we had these two distinct 
groups and the harms were limited to so-called drug abusers. 
Policymakers accepted that.
    If you look at what was coming out of the Federal 
Government even over the past Administration, if you look at 
what was coming out of Substance Abuse and Mental Health 
Services Administration (SAMHSA), National Institute on Drug 
Abuse (NIDA), Office of National Drug Control Policy (ONDCP), 
it was almost an exclusive focus on the issue of non-medical 
use, kids getting into Grandma's medicine chest. Nobody was 
asking why does every Grandma now have opioids in her medicine 
chest. Now we are finally asking that question.
    Chairman Johnson. The whole point of the PROP Act was to 
acknowledge the fact that government policy was requiring 
providers to ask the question: ``Are you satisfied with your 
pain medication?'' And if you got a bad survey result, it 
affected your reimbursement, so, government policy actually 
fueled that.
    Dr. Hyman, at what point did the medical community all of a 
sudden wake up and say, ``This is a real problem?'' Has it 
literally just been the last couple years even though this has 
been around for a couple decades?
    Dr. Hyman. I think it is quite recent that the medical 
community has woken up to it, and you have already alluded to 
some of the incentives that they had to--I do not want to say 
``not wake up to it,'' but to focus their attention on other 
areas. Lots of aspects of the health care system more or less 
run on autopilot. People keep doing things the way they were 
trained to do them. New information may not be available, or if 
it is available, they may say, oh, that is just one study.
    And this is not just about opioids, right? I can tell you 
story after story where there is a surgery or a treatment that 
gets deployed, it sort of spreads like wildfire, subsequent 
research indicates that it is not such a great treatment, and 
it is very hard to stamp out once it is out there because the 
same sort of passive payer of bills creates an incentive for 
people to keep doing what they are doing.
    Chairman Johnson. So a one-number answer out of both of 
you. What percentage of the medical community do you think get 
it now, fully understand it? We will start with Dr. Hyman.
    Dr. Kolodny. It is age-related. Young doctors get it. They 
have come of age during the opioid crisis. In some cases they 
have lost peers to opioid overdoses. Older doctors, in my 
experience, doctors maybe older than 50, tend to still--many of 
them tend to be prescribing pretty aggressively.
    Chairman Johnson. So what percent? Only half of doctors, 50 
percent are getting----
    Dr. Kolodny. It is very difficult to give you an answer.
    Chairman Johnson. I realize that. I am not going to hold 
you to it. Would you venture a guess?
    Dr. Kolodny. I would guess that maybe a third of--it is a 
wild guess, that maybe a third of the prescribers are still 
very misinformed about opioids and are prescribing very 
    Chairman Johnson. They do not read the news? Dr. Hyman, do 
you agree with that or----
    Dr. Hyman. Well, even if they read the news, they may not 
view themselves as part of the problem, right? They may view 
themselves as treating with compassion and care the patients 
that present in front of them. If you made me give a number, I 
would fall back on my medical school training where an 
attending told me, ``There are only two numbers in medicine--80 
percent and 20 percent.'' So I would give you the 20 percent 
number, which is a little lower. I think it is higher among 
younger physicians for the reasons that Dr. Kolodny has already 
alluded to.
    Circling back to the question about the frequency of fraud 
and a quantitative figure, the standard figure in the 
literature is 10 percent. There is not a great empirical basis 
for that number, but if you add in waste and overuse, you can 
get much higher numbers. And I am happy to share with you some 
of the research that has been done on that.
    Chairman Johnson. One of the questions we have submitted to 
CMS is how much are they spending reimbursing for opioids. That 
would be just kind of a nice macro number to know.
    I want to switch over to the prosecutor and inspector 
general. An indicator of the problem we have here is there is 
actually a website--and I am not going to promote it, but there 
is a website you can check to see what the cost is to make sure 
you are not getting ripped off by your drug dealer in terms of 
these opioids. So, I mean, that is a problem. Can you speak to 
the relative cost of street heroin versus opioids? Any of you 
    Mr. Tyndall. I do not know that I can give any specifics, 
but my understanding is that now because of the reformulation 
of some of the narcotics that we receive, they are a bit harder 
to use, and they are becoming more expensive. Heroin is growing 
cheaper and cheaper by the day, so people are now turning to 
heroin as opposed to prescription drugs.
    Mr. Schalk. What we saw was at the pinnacle of Opana abuse, 
they were going--we had high school kids that were spending 
$200 a day on two Opanas, $100 apiece for a simple pill. Once 
that supply ran up and the formulation changed where it was not 
as easy to abuse, that is when heroin came in, and it 
devastated our community. And heroin, from our experience, has 
been easier to get, it is cheaper to get, and the effect--once 
you go down the road of heroin, you do not want to go back to 
pills because the high is not as good.
    Chairman Johnson. Do people actually buy fentanyl, or do 
they buy it because they think it is heroin?
    Mr. Schalk. What we see are people buying heroin that is 
laced with fentanyl.
    Chairman Johnson. OK. I read something in a magazine 
article, that $800 worth of fentanyl produces about $800,000 of 
street value. So if you have the demand, the profit motivation 
is so high you are going to have the supply.
    When I started this inquiry, again, it was based on that 
article talking about funding a lifestyle of not working, 
supplying free health care, and access to products so 
beneficiaries can sell opioids as an income supplement. In 
terms of our actual investigation, though, we found far more 
complex and larger schemes. Again, I want to ask the 
prosecutor: is that just because we really do not go after the 
single users, the people who have been using it, and we really 
are focusing what limited investigation and prosecutorial 
resources we have in terms of the larger schemes?
    Mr. Schalk. I think, like any law enforcement agency, we 
have to focus our resources and our efforts on the most 
prominent issues, and oftentimes that is the bigger players 
that we are going after. If we were to sit and--we would need 
to expand our police agencies tenfold to have a direct--to hold 
everyone directly accountable in our area.
    Chairman Johnson. But with what you were talking about, you 
think this is enormous. So you think it is enormous because 
individuals literally are accessing, that is, using their 
Medicaid cards, or Medicare or VA benefits, and they are 
getting the pills, and they get a large quantity--by the way, 
does anybody know what an average quantity is the doctors--I 
mean, what would be a typical monthly supply of one of these 
    Dr. Kolodny. Well, the vast majority of the prescriptions 
are written for acute pain, so if you are looking at numbers of 
prescriptions written, most of them are for acute pain, and 
they are for a small quantity.
    Chairman Johnson. Or short term.
    Dr. Kolodny. Yes.
    Chairman Johnson. What about chronic?
    Dr. Kolodny. So when you measure consumption in terms of 
weight of opioid consumed in the United States in terms of a 
morphine equivalent, the bulk of our consumption is chronic 
pain, and the average patient is given a 1-month prescription 
with an enormous amount of opioid in it. So it could be about 
70 milligram morphine equivalents or more per day. Some 
patients are on even greater quantities that are very 
    Chairman Johnson. How many pills would that be a day or a 
month? I mean, let us say the average size in terms of 
    Dr. Kolodny. So for a patient who is receiving opioids for 
chronic pain, they could be taking one pill in the morning, one 
pill at night. But each of those pills could be the equivalent 
of 25 or 30 Vicodin in one pill. So it would be the equivalent 
of taking 50 pills a day, only they are taking it in an 
extended-release drug.
    Chairman Johnson. So you really can, because of the street 
value per milligram, or whatever it is.
    Dr. Kolodny. It is about $1 a milligram. The most popular 
opioid on the black market is the 30-milligram immediate-
release oxycodone, which will do what a $10 bag of heroin will 
do. And the effect is actually almost identical. In fact, some 
people prefer the effect of oxycodone. They are using heroin 
because it is cheaper, not because it is a stronger effect.
    Mr. Tyndall. Mr. Chairman, the prescriptions we are seeing 
sometimes it is 90 to 120 pills per month, depending on the--
and hydrocodone tends to be kind of the drug of choice in 
Tennessee. You may get 5 milligrams, 7.5 milligrams, or 10 
milligrams. So depending on the milligram and the number of 
pills, if a person wants to sell 120 10-milligram pills, that 
is a pretty good chunk of change for a month's work.
    Chairman Johnson. So when you have the difference between 
acute versus chronic, how are you going to control 
prescriptions based on chronic pain? You are not going to 
require a doctor to keep writing that every 3 days. One of the 
solutions sometimes is just limit it to a 3-day supply. But 
that is just not--that may be appropriate for acute pain for a 
dentist or something like that, but not for chronic pain.
    Dr. Kolodny. So for chronic pain, we should not be putting 
patients on long-term opioids. We have to prevent new starts. 
For the vast majority of these patients, opioids are not safe 
or effective. And I think that has been one of the main goals 
of the CDC guideline, is to prevent more people from winding up 
on long-term opioids. We have about 10 million Americans who 
are on opioids chronically, so many Americans on opioids 
chronically that we are seeing ads on television for drugs to 
treat the side effects of being on opioids chronically, like 
constipation. These 10 million Americans who are on opioids 
chronically, many of them may not be able to come off. Even 
though the medical community is figuring out we should not have 
started them on opioids, we also do not want them to cut them 
off abruptly. We have to try and help some of these patients 
come off. Some of them can come off. Some of them need 
addiction treatment. Some of them may just need to be 
maintained on safer, lower doses of the medication they are 
already on. The trick is to prevent more people from winding up 
stuck in their shoes.
    Chairman Johnson. So Mr. Adolphsen quoted some figures in 
terms of, unfortunately, the ineffectiveness of treatment. Can 
the doctors speak to that? What kind of success rates do we 
have? And also just in terms of Suboxone, does that also give a 
high? Why would that be diverted and be able to be sold?
    Dr. Kolodny. So if you are an experienced opioid user and 
let us say you are in jail, so you have been off of opioids, 
and somebody smuggles buprenorphine--Suboxone--into you in jail 
and you take it, you will feel a strong opioid effect as if you 
have just used just about any opioid. If you are taking 
buprenorphine the way you are supposed to on a regular basis, 
you are not feeling high from it. Patients feel normal. They 
look normal. I have had patients who are physicians who I would 
allow them to operate on me while they were on buprenorphine 
treatment. People can function very well.
    Most patients who are treated with buprenorphine do well. 
More than half of patients have good outcomes. Some younger 
patients with more severe opioid addiction, when you try and 
treat them with buprenorphine, in the first year or so they do 
not do that great. They come on and off. Sometimes they will 
trade it. But it is the first-line treatment, and people who 
stick with it have good outcomes, and it is more effective than 
the Vivitrol monthly injection.
    Chairman Johnson. So successful treatment with Suboxone, 
how long does that take? Months? Years?
    Dr. Kolodny. What I can say is that short-term use of 
buprenorphine, Suboxone, does not work well. When patients come 
off, they are at very high risk of relapse. So we are talking 
about a longer-term treatment. Some patients, maybe it means 
for the rest of their lives. I would hope not. I think there 
are people who can come off, and maybe we will come up with 
other treatments for opioid addiction so that there are better 
options available.
    Chairman Johnson. How often do they take that?
    Dr. Kolodny. It is taken every day. Some patients will take 
it in the----
    Chairman Johnson. So just once a day.
    Dr. Kolodny. Yes, once a day or twice a day.
    Chairman Johnson. So we would probably have to make sure 
that we test to make sure they take----
    Dr. Kolodny. Yes, you want to make sure you test so that it 
is in their urine so that you know they are not trading it or 
selling it.
    Chairman Johnson. Dr. Hyman, do you have anything to add 
about treatment?
    Dr. Hyman. I agree with everything Dr. Kolodny said, 
although you should count the people who drop out as failures 
unless they re-enroll.
    Dr. Kolodny. No. I agree.
    Dr. Hyman. And the second point I would make--and this is 
sort of the incidental consequence of once you start testing 
people, you have suddenly created a Gold Rush for urine 
testing. So there is a huge amount of money that is spent on 
urine testing as part of the treatment.
    Chairman Johnson. Buy the stock, huh? Well, again, those 
are my questions, so I will just go starting from my left to 
right: is there one overall suggestion you would have in terms 
of a change in law or something we should do as a Nation to try 
and solve this problem? Mr. Adolphsen.
    Mr. Adolphsen. Thanks, Senator. I think incumbent on us 
first is just to recognize that Medicaid has a large role as a 
funder of opioids, and so we need to recognize that and 
understand that we have to do something about it, admit we are 
part of the problem, so to speak, in the Medicaid program. Slow 
down the Medicaid rush. It is increasing the supply. There is 
no question about it. Even if you go back before expansion, 
Medicaid enrollment doubled from 2000 to 2013. So that is an 
issue, so I think we need to slow that down.
    I would target benefits. I think if somebody is in need of 
substance abuse treatment, they are low-income, everybody in 
this room, everybody around us wants that person to have the 
substance abuse treatment. But it does not necessarily have to 
come with all the other potential side effects of having that 
Medicaid card and the free access it provides to other things 
like opioids.
    Chairman Johnson. So put some kind of controls around the 
benefit. Mr. Schalk?
    Mr. Schalk. Thank you, Senator. From a very broad 
perspective, we need to obviously diminish the gap between the 
impoverished and the middle class. We do that, in my opinion, 
by creating jobs, incentivizing businesses to grow. When we 
have people that are going to work in the morning, their 
likelihood of walking through the courthouse doors as a 
defendant reduces drastically, especially when we are talking 
about drug abuse.
    From a more narrow perspective, as we have echoed here 
today, I believe that regulating the prescriptions that are 
being written by our medical community would go a long way in 
curbing the issues that we are seeing and discussing today. 
Thank you.
    Chairman Johnson. Mr. Tyndall.
    Mr. Tyndall. I am going to brag on Tennessee just a little 
bit, Mr. Chairman. Our Controlled Substance Monitoring Database 
requires every drug, every narcotic that is dispensed, it has 
to be entered into our Controlled Substance Monitoring Database 
no later than the following business day. So if that is true--
and it also requires our physicians to check that CSMD prior to 
prescribing a narcotic. So if that is true, the doctor should 
see that this person has already received that narcotic within 
24 or 48 hours and they should not, I would hope, be 
prescribing the same or similar medication for that patient.
    Chairman Johnson. Do you know relative to other States, are 
you that much further advanced in terms of that type of 
monitoring? Is it comparable?
    Mr. Tyndall. I am not sure, but I think we are much more 
progressive and aggressive in monitoring and trying to identify 
people who are committing TennCare fraud, Mr. Chairman.
    Chairman Johnson. OK. Dr. Hyman?
    Dr. Hyman. I would change the incentives for physicians to 
prescribe opioids to Medicare and Medicaid beneficiaries as 
profligately as they do.
    Chairman Johnson. OK. You have to describe that more 
specifically. What are the incentives right now? And what is 
the difference between the incentives as they prescribe in 
Medicaid and Medicare versus private insurance?
    Dr. Hyman. So the incentives for--as I said, Medicare and 
Medicaid are both sort of passive payers of bills, and so 
nobody is going to look too closely at your prescribing 
practices unless, many years later somebody happens to be 
paying attention. So, when you couple that with the reality 
that the way you bring a clinical encounter to a close is by 
filling out a prescription and handing it to the patient, what 
you want is a system that does not pay providers to continue 
that way of doing things, right? So you could use either 
carrots or sticks to do so, and I would be happy to talk about 
how you would design that.
    Chairman Johnson. So it kind of goes back to how you have 
to target the benefits, you have to control them. You have to 
just make it more difficult for doctors to write prescriptions 
for Medicaid and Medicare versus private insurance. There are 
more controls in private insurance, is what you are telling me?
    Dr. Hyman. Because of the limited networks and the sort of 
for-profit nature of the insurer, there is going to be a 
tighter feedback loop in the private sector than you will see 
in the public programs.
    Chairman Johnson. OK. Dr. Kolodny?
    Dr. Kolodny. Yes, so to bring our opioid addiction epidemic 
under control and ultimately to an end, First off, you have to 
frame it the right way, and if you understand that it is an 
addiction epidemic, an epidemic of people with the disease of 
opioid addiction, what we need to do about it is very similar 
to what you would do for any disease outbreak, any disease 
epidemic. It is similar to what you would do for an Ebola 
outbreak, a measles outbreak, an HIV epidemic. What we have to 
do really are two things: We have to prevent more people from 
becoming opioid addicted. We have to see that the people who 
are opioid addicted have access to effective treatment.
    To prevent more people from becoming opioid addicted, more 
than anything else, what you are hearing today and what we know 
is that we are going to need much more cautious prescribing. 
Even though prescribing is trending in the right direction, we 
are still massively overprescribing. Until prescribing becomes 
more cautious, we are going to keep creating new cases of 
    For the millions that are addicted, they really need access 
to effective treatment. And when I say ``effective treatment,'' 
I am not really talking about detox or rehab, which does not 
work well for most people who are opioid addicted. I am talking 
about long-term outpatient treatment. And as you have pointed 
out, Medicaid is not a silver bullet. I believe to really have 
the right system available where someone in every county in the 
United States can walk into a treatment center and be treated 
that same day, regardless of their ability to pay for that 
treatment, to really get there I think requires an investment 
in the billions, I would estimate $6 billion a year to start to 
build out these systems, and a commitment from Congress for 10 
years of about $60 billion to get where we need to be. And when 
you consider what this problem is costing us, both the human 
cost and the economic cost, I think that investment is very 
    Chairman Johnson. It will be interesting to see how much we 
actually spend on opioids and how much money we might save by 
spending on Suboxone or something like that.
    Again, thank you all. I enjoyed the hearing. I learned an 
awful lot, and that is because you folks did a great job. So I 
appreciate your time, your testimony, and your answers to our 
    The hearing record will remain open for 15 days until 
February 1 at 5 p.m. for the submission of statements and 
questions for the record. This hearing is adjourned.
    [Whereupon, at 12:17 p.m., the Committee was adjourned.]

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