Toiyabe CEO: Pharmacy audit reveals fraud, mismanaged drug dispensing

By: 
Terrance Vestal
Managing Editor

A third-party audit into the Toiyabe Health Project pharmacy has revealed incidents of fraud, including some pharmacists writing prescriptions to themselves, a lack of control over medications and the possibility that some patients might have gotten incorrect prescriptions dispensed to them, the health care facility’s chief executive officer said Monday.
Toiyabe CEO Dr. Kori Novak said the audit, conducted by Effort Pharmacy Services, was called for after Toiyabe’s 2017-18 financial audits raised some red flags regarding pharmacy inventory issues.
Novak said the pharmacy audit has been completed. The internal investigation by Toyabe’s Quality Assurance/Quality Improvement Department and Human Resources Department is expected to be concluded today.
The investigation was conducted while a handful of residents held protests last week and earlier this month calling for the reinstatement of TIHP pharmacists and brothers Fred DiRisio and Gary DiRisio, who were put on paid administrative leave. They also are seeking the removal of Novak for alleged financial malfeasance.
“They had four pharmacists working there,” former TIHP board member Joe Salque, who took part in a protest on April 17, said. “Then they put Gary and Fred on administrative leave. Then the other two pharmacists walked because they were afraid of any legal stuff that they were asked to do would affect their licenses.”
Novak, however, said the two pharmacists were put on paid leave after findings from the audit began to come to light.
On April 13, when the other two pharmacists walked without notice, Novak said by the end of the day Toiyabe had new pharmacists from Sacramento on their way and the facility’s pharmacy reopened the next day.
“The one-day, unexpected pharmacy closure did not affect the delivery of pharmaceuticals to our outlying clinics or home-bound patients,” she said.
“As we continue with our investigation, unfortunately, we’re finding really serious things like fraudulent prescriptions,” Novak said. “People were signing on behalf of our clinicians when our clinicians had never even seen the patient.”
Novak said Toiyabe has a variety of methods in its computer system to check to see if that patient had an appointment with that clinician. In some cases the patient had no record of seeing that clinician yet the patient received a prescription that was “signed” by the clinician.
Novak said the administration, through the audit and investigation, has found at least three of the four pharmacists have written prescriptions for themselves.
The Toiyabe CEO said the audit also reflected that the facility has missing drugs on “multiple levels.”
“Missing meds does not mean stealing,” Novak said. “Missing meds could mean it dropped behind the computer and they (the pharmacy) couldn’t find it. But in health care, or especially in pharmaceuticals, every pill counts. You can’t just say, ‘Oh, I lost a couple pills.’ You have to be able to account for every single pill. And that was part of the problem when we did this third-party audit. There were random pills, which nobody knew what they were, falling behind the computer.”
Another level of concern was raised during the third-party audit regarding the pharmacy’s automated robotic dispensing system. Novak said during the audit it was discovered that 52 percent of the drugs in the system were mislabled or not labeled at all. In this situation, Novak said some people might have gotten the wrong drugs with their prescriptions.
“Absolutely, there’s a chance people were getting the wrong meds,” Novak said. “And there’s no way to tell that. Just to be really very, very clear, we are fixing it and people are getting the right medications now. But it scares me because I was getting medications there, too.”

The final inventory report summary from Effort Pharmacy Services, which Toiyabe provided to The Inyo Register, noted initial observations during the inventory process, which included:
• Inventory not organized in a systematic order
• Same drugs found in multiple places
• Expired controlled drugs from 2015 found in safe towards bottom in a bin
• Loose tablets behind counting machine at designated prescription filling stations
• Physician samples found in refrigerator comingled with pharmacy inventory
• Drugs in computer inventory not found in pharmacy.
The company also made observations at the conclusion of its inventory, which took place on April 11, noting in part that, “over 500 items appear to be not found without supporting evidence of destruction or other explainable dispositions to their whereabouts to substantiate on-hand inventory … leading to false inventory levels.”
Novak said there also have been questions as to why Toiyabe patients didn’t have a choice as to where to go if they didn’t get their prescriptions from Toiyabe. The facility has an account with Dwayne’s Friendly Pharmacy and also has opened up an account with Vons so patients have a choice.

Alleged HIPAA
violations
Novak said there has been allegations regarding Toiyabe’s chief operations officer, chief financial officer and quality assurance staff violating the Health Insurance Portability and Accountability Act (HIPAA). When these allegations were made, she said she put all three of these individuals on paid administrative leave as per Toiyabe policy and “we did an investigation on if they were inappropriately accessing records.”
“There is a portion of HIPAA called TPO – Treatment Payment and Operations,” Novak explained. “It allows administration the ability to see or utilize patient records for those three things. In fact, they were just doing their jobs.”

Toiyabe finances
Novak said there has been questions regarding Toiyabe’s financial status, specifically that the facility is $9 million in the red.
“While I can’t share our financials without my board of directors’ approval,” Novak said. “I can point out the fact that while TIHP employees were sent home for their safety and in support of the governor’s stay at home orders, all employees have and continue to receive full 40-hour per week pay, full benefits, continue to accrue sick and vacation time and we have not furloughed anyone. If we were about to close, we could not be able to do that for 171 employees.”
Toiyabe also has been criticized for cutting hours, therefore cutting services. Novak said the facility did cut its hours in response to COVID-19 and is now open from 9 a.m. - 5 p.m., previously it was open from 7:30 a.m. - 6 p.m. Toiyabe is still seeing emergency patients in all departments and the medical staff is utilizing telemedicine as is the Behavioral Health staff.
“I will say I am very proud of every member of the THIP staff who has come to work or continues to work from home, or stays at home for the safety of our community,” Novak said. “Their dedication and hard work for our patients and community in these times has been more than admirable.”

Photo caption: A handful of protestors on April 17 picketed in front of the Toiyabe Indian Health Project, demanding the reinstatement of two pharmacists and calling for the removal of Toiyabe CEO Kori Novak. Novak said an audit/investigation has turned up some alarming issues within the pharmacy that have been or are being rectified.
Photo by Charles James

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