Item - 2017.AU9.10

The Audit Committee recommends that:

1. City Council request the Treasurer to consult with the City's current benefits plan administrator and the appropriate legislative agencies to determine whether the benefits plan administrator should implement a practice of considering reporting to the appropriate regulatory body, physicians or pharmacists who prescribed or dispensed potentially excessive opioids to claimants.

2. City Council request the Treasurer to request the City's benefits plan administrator to provide individual claimants, who exhibit patterns at risk of opioid abuse or addiction, with information about the available employee assistance programs or services.

3. City Council request the Treasurer to clarify with the City's benefits plan administrator its practice of adjudicating erectile dysfunction drugs to identify anomalies such as excessive dosage, significant year-over-year increases, and obtaining multiple types of drugs at the same time.

4. City Council request the Treasurer to follow up on the claimants identified in this supplementary report whose claims for erectile dysfunction drugs appeared to be questionable and to determine whether there was waste or abuse of employee drug benefits by these claimants.

5. City Council request the Treasurer to ensure that the City's benefits administrator records the necessary prescriber and pharmacy information from paper claims, and has in place effective monitoring and tools for analysis of claim patterns accounting for both electronic and paper submissions.

6. City Council request the Treasurer to put in place a written policy and procedure on granting of exception cases for employee drug benefits. The reason, the specific drug, and period in effect should be documented and retained.

7. City Council request the Treasurer to clarify with the City's benefits plan administrator its practice of reimbursing dispensing fees for vacation supply to ensure it is consistent with the City's benefits plans.

8. City Council request the City Manager to forward a copy of the audit report to the Toronto Police Services Board and the Toronto Transit Commission Board for their information.

This report is supplementary to the Phase One audit on employee drug benefits. The Phase One audit report was issued in October 2016. At the time of that audit, the Auditor General was not provided access to claim files and information maintained by Manulife, the then City's benefit administrator. This supplementary report summarizes our review of additional information on anomalies that was provided by Manulife subsequent to the issuance of the Phase One audit report.

Overall, in reviewing a selected sample of cases, we did not find clear signs of double doctoring by the claimants with excessive prescription opioids identified in the Phase One report. However, we observed many probable cases of over-prescription by physicians for fentanyl or oxycodone, resulting in claimants being reimbursed exceedingly high doses.

For claimants who were reimbursed for large quantities of erectile dysfunction drugs, Manulife could not provide further information to explain or validate the medical needs of these claims. Our supplementary work found that 10 claimants appeared to have obtained an excessive quantity of on-demand erectile dysfunction drugs using prescriptions from different physicians. This might be a sign of double doctoring and potential benefits abuse. We also found many cases of unusual claim patterns for this type of drugs.

This report together with the Phase One audit report, provided 25 recommendations to help improve the City's management of employee drug benefits and reduce instances of waste and abuse.