All Pharmacies Face Medicare Part A vs Part D Billing Risks, Especially Combo Shops

Pharmacies that service long-term care (LTC) and assisted living facilities (ALF) as well as retail patients, known as “Combo Shops”, may not be aware of the potential recoupment risks from Medicare. PAAS National® wants to inform our members of these risks and how to best avoid them.

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Many times, patients residing in long-term care or assisted living facilities have a temporary stay under Medicare Part A. A change in Medicare coverage status is typically linked to the patient’s admission and discharge dates from a hospital or skilled nursing facility (SNF) stay.

When a patient is covered under Part A, the facility providing the stay is paid for the medications, supplies, and services during the coverage period. This means Medicare Part D will not be responsible for claims billed during that time (Medicare won’t pay under Part A and Part D at the same time). CMS provides Part D sponsors a Long-Term Institutionalized (LTI) report on a quarterly basis. This information is utilized by the plan to identify any misbilled claims due to overlapping Part A coverage. Unfortunately, PBMs do not have the information at the point-of-sale to stop these claims from being billed inappropriately.

It is vital that pharmacies stay in constant contact with facilities prior to billing and delivering prescriptions to ensure there has not been any changes in patients’ Medicare coverage due to an admission. Medications that are delivered to facilities when a patient is “in-patient” (under a Part A stay) should be returned to the pharmacy until the Part A stay has ended. Claims can be billed once again to Part D the day after the last covered day of the Part A stay. Any sooner and the claim would face full recoupment – even if there’s only one day of overlap!

LTC and ALF claims are not the only ones at risk. Prescriptions billed for patients that are on a Part A stay (for use at home) would also fall under this risk. Families and facilities frequently request pharmacies to fill prescriptions in anticipation of discharge. This in theory is a great idea; however, if Part A has already paid for that patient on that day(s), Part D will not pay for duplicate coverage. While difficult to catch, imagine the scenario of a husband being in the hospital (under Part A) and the wife presenting to the pharmacy for prescriptions. Even if the prescriptions are routine refills, they are subject to full recoupment! If the spouse (or an authorized representative) mentions that the patient is in the hospital right now, and they’re on Medicare, you will want to ask more questions before dispensing.

PAAS Tips:

  • Work with facilities to have process in place for them to notify you of a patient’s Medicare status change
  • Have an agreement in place with the facilities you service on how payments can be settled if claims were incorrectly billed to Medicare Part D and subsequently recouped
  • Stay informed for delays of patient discharge and reverse and rebill for appropriate date of dispensing
  • Long-term or Post-acute Care patients’ medications may need to be split-billed when patient is moved from Medicare Part A to Part D
    • Using submission clarification code 19 (Split-Billing) indicates the remainder of the claim being billed is no longer eligible under Medicare Part A stay. This code should only be used in a long-term care setting.
  • Questions asked during medication pick up may assist pharmacies on knowing if, or when, the patient will be discharged
  • See the September 2022 Newsline article, Medicare Part D Long-Term Institutionalized (LTI) Resident Report
  • If you receive a notice from Medicare D for incorrect billing due to Medicare Part A stay, send it to PAAS for information and guidance.

Dana Westberg, CPhT