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Tribe Accused of Drug Program Abuse

October 11, 2000

MASHANTUCKET, Conn. (AP) _ A wealthy Indian tribe that runs the world’s largest casino abused a government health program intended for American Indians by dispensing $5.8 million in discounted prescription drugs to its non-Indian casino employees, a federal audit says.

In response, the federal Indian Health Service said it will review all prescription drug contracts with tribes across the country.

The audit found that 82 percent of the drugs dispensed under the program by the Mashantucket Pequot’s pharmacy in 1998 and 1999 went to ineligible patients. The service said it will instruct the Mashantuckets to stop the practice.

Tribal spokesman Arthur Henick said Monday that the Mashantuckets disagree with the audit’s conclusions and may appeal to top health officials in Washington. He said there are no immediate plans to scale back the drug program, which he said allows the tribe to provide prescription medicine at no cost to its employees.

The Mashantuckets run Foxwoods Resort Casino, which takes in upwards of $1 million a day in gambling revenue. There is no suggestion the tribe profits directly from the sale of the drugs. However, on its Web site, Foxwoods touts its ``no-cost prescription program with onsite delivery″ as a job benefit.

Health officials expressed concern that including non-Indians who work in tribal businesses could jeopardize the future of the drug discount, which some poorer tribes count on for affordable prescription medicines.

``Evidence of program abuse could prompt Congress to reconsider the future of discounted drug programs, which would ultimately affect the millions of federal beneficiaries who now depend upon them for their health care,″ June Gibbs Brown, the U.S. Health and Human Services Department’s inspector general, wrote in an Aug. 17 memo to the head of the Indian Health Service. Brown’s office conducted the audit, which The Associated Press located on the inspector general’s Web site.

Under the Veterans Health Care Act of 1992, the Veterans Affairs Department, the Pentagon, the Coast Guard and the Public Health Service are entitled to buy drugs from suppliers at deeply discounted rates _ often less than 50 percent the regular price. The Indian Health Service, a unit of the Public Health Service, extends this service to tribes that have ``self-determination contracts″ with the government.

Tribes can then provide the discounted drugs to their own members. But the law says the drugs may be dispensed to non-Indians only if ``there are no reasonable alternative health services available.″

The Mashantucket tribe has about 600 members, plus 12,000 employees at its casino, hotels, restaurants and museum. Together with their dependents, about 22,000 people, almost all of them non-Indians, are covered under the tribe’s prescription drug plan, auditors said.

Auditors said that because there are at least 40 drug stores within 10 miles of the reservation, the tribe cannot claim a lack of alternative health services.

The auditors also dismissed the tribe’s contention that the Indian Health Service was aware of its practice of providing drugs to non-Indians, saying that even if it were true, the health service does not have the authority to approve it.

Casino employees said the tribe’s prescription drug benefit was unusually generous and would be sorely missed.

Leo Jackson, a shuttle bus driver who said he lost his medical coverage while employed at Electric Boat in Groton years ago, said he requires three prescriptions for cancer treatment.

``There’s no way I could afford to pay even for part of this stuff I have to take,″ Jackson said. ``I don’t know what I’ll do if the plan disappears.″

Henick said the Mashantuckets do not consider the inspector general’s report the final word on the matter.

``The tribe has been able to provide one of the best health plans in the region for its employees,″ Henick said. ``We’re going to continue to do anything we can for our employees, whom we consider part of the tribe for purposes of health care.″

Although the inspector general’s report concentrated on the Mashantuckets, it found reason to believe the alleged abuse may involve other tribes.

The report noted that in August 1999, a consortium of 11 tribes in Michigan and Wisconsin requested advice on the legality of providing discounted drugs to non-Indians, indicating that they believed they could do so. On Tuesday, the Indian Health Service told the AP it could not immediately determine whether it had given the tribes a reply.

In addition, the Mashantuckets contract with 16 other tribes to provide mail-order pharmaceutical services. Auditors contacted six of the tribes and found that four of them include non-Indian employees among those who receive discounted drugs from the Mashantuckets.


On the Net:

Department of Health and Human Services, inspector general: http://OIG.hhs.gov

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