Medicaid: A Prime Driver Behind the Nation’s Opioid Epidemic

Michael W. Davis, DDS


On January 17, 2018, the US Senate’s Committee on Homeland Security and Governmental Affairs issued a majority staff report, “Drugs for Dollars: How Medicaid Helps Fuel the Opioid Epidemic.” The detailed 163-page report went into exhaustive, specific cases and generated an overall perspective of Medicaid’s significant deleterious impact on opioid abuse and addiction.

“Americans have been paying much attention to what caused this epidemic and what can be done to end it. Less attention is paid to the possibility that federal programs—namely, Medicaid—have contributed to the epidemic,” the report says, as the Senate committee concludes that governmental Medicaid spending has incentivized opioid abuse.

The findings don’t argue that Medicaid spending isn’t beneficial to millions of citizens. Further, those findings don’t point to Medicaid spending as a primary cause of overdose deaths. But the report does strongly indicate that Medicaid spending, and the growth of that spending through the Affordable Care Act (ACA), is playing a perverse and unintended role in generating the funding source to fuel the opioid epidemic.

The report presents more than 100 legal case studies of investigation, prosecution, and convictions to support this overall view. This impressive amount of supportive data also only represents a fraction of cases available. As the report states, most cases go unreported to authorities and others unprosecuted.

The report makes a direct link between the dollar amounts spent on Medicaid and a concurrent rise in opioid-related in-patient hospital stays. These elevated statistics were not observed with private insurance hospital stays. Medicaid expansion states were most problematic for opioid abuse and treatment. The report demonstrates a 55% increase in opioid legal prosecutions from the initiation of Medicaid expansion under the ACA in just three years (2014-17).

“There appears to be no limit to the types of schemes used to scam the Medicaid program, from large drug rings that employ beneficiaries as ‘runners’ to fill oxycodone prescriptions, to nurses working the night shift who steal hydrocodone pills from patients. Illicit painkillers obtained with Medicaid cards are being resold at handsome profits nationwide, in places ranging from the streets of Milwaukee to a Native American reservation in upstate New York,” the report says.

“These criminal enterprises are creating a new class of drug dealers, who profit from pills that are otherwise legal and at the federal government’s expense. The taxpayer-funded wealth can be staggering: one New York physician and accused trafficker lives in a mansion known as ‘The House that Oxycodone Built.’ Another owner of dozens of skilled nursing facilities, charged with orchestrating a $1 billion scheme to defraud Medicaid (and Medicare), drove a $1.6 million Ferrari. Some cases test the limits of the bizarre. In Georgia, a woman allegedly impersonated her twin sister to get Medicaid-funded oxycodone,” it continues.

“Overwhelming evidence shows that Medicaid has inadvertently contributed to the national tragedy that is the opioid epidemic, and has taken a toll that is playing out in courtrooms across the nation. Although this staff report examines only Medicaid in detail, other well-intended government programs, such as Medicare, may provide similar incentives for rational actors to engage in bad behavior with highly addictive opioids,” the report says.

“These issues hold major ramifications for public policy, along with the nation’s health. They deserve serious consideration and a sober national debate, one we hope this staff report will help to initiate. The victims of this terrible epidemic deserve no less,” it concludes.

In a letter dated January 17, 2018, from US Senate Committee on Homeland Security and Governmental Affairs chairperson Ron Johnson (R-WI) to Department of Health and Human Services Acting Secretary Eric Hargan and Centers for Medicare and Medicaid Services Administrator Seema Verma, Johnson forwarded his committee’s findings.

Johnson specifically sought answers about what federal agencies are doing to prevent the improper use of Medicaid to obtain opioids (click here to see the letter). He also presented five key points:

  • Medicaid is a well-intended program that has inadvertently contributed to the nation’s opioid epidemic because it incentivizes the abuse and sale of dangerous drugs.
  • Growing evidence indicates that Obamacare’s Medicaid expansion may be fueling the epidemic even worse. Drug overdose deaths per 1 million people are rising nearly twice as fast in expansion states as non-expansion states, while Medicaid-funded hospital stays related to opioids in the fourth quarter of 2014 jumped 37% compared to the same period the prior year.
  • In our nation’s courts, prosecutors have convicted or charged at least 1,072 people in recent years with abusing Medicaid to obtain or sell prescription opioids. The numbers of criminal defendants increased 18% in the four years after Medicaid expanded compared to the previous four years, while the numbers of criminal cases jumped 55% post-expansion.
  • The cases range from large-scale fraud schemes involving major drug rings to individual nurses and doctors stealing or over-prescribing pills, all at Medicaid’s expense.
  • Other federal programs, including Medicare, are also being exploited to obtain or sell opioids. In preliminary research, Committee staff found 243 instances of opioid-related Medicaid fraud in recent years.


The dental community must play its part combating our nation’s opioid crisis. The Committee’s report additionally highlighted a couple of case studies that involved dental professionals. Further, the ADA is engaging with government officials and with dental professionals to reduce opioid abuse.

However, one should never disregard the overriding larger picture. The Medicaid program is not a deity that is above or beyond critical examination. Spending on the Medicaid program has been demonstrated as a significant contributing factor to the national opioid crisis. It’s refreshing to actually witness government officials review the damaging policies of out-of-control deficit entitlement spending that bring forth myriad negative unintended consequences.

Dr. Davis practices general dentistry in Santa Fe, NM. He assists as an expert witness in dental fraud and malpractice legal cases. He currently chairs the Santa Fe District Dental Society Peer-Review Committee and serves as a state dental association member to its house of delegates. He extensively writes and lectures on related matters. He may be reached at or

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