For those Covered Items for which a Transaction Statement, Transaction History, and Transaction Information are not required by the DSCSA, Provider must maintain records of the exact quantities purchased, name of the Authorized Trading Partner, Covered Item name(s), NDC(s), date(s) of purchase, and proof of payment [e.g., copies of credit card receipts, canceled checks (front AND back)] (collectively “Documentation”). For those Covered Items received from other pharmacies, Provider must obtain and maintain the entire Transaction Statement, Transaction History, and Transaction Information from the selling entities.
For context, the Drug Supply Chain Security Act (DSCSA) allows such sales between pharmacies and requires that these transactions include the pedigree (aka Transaction Statement, Transaction History, and Transaction Information or “3Ts”) if they are for general stock replenishment. The DSCSA exempts transactions that are for a specific patient need and does not require the pedigree to be communicated, but Caremark seems unwavering.
PAAS National® has seen Caremark auditors request copies of the transferring pharmacy’s license and original invoices (and/or pedigree information) from the transferring pharmacy’s wholesaler. While PAAS strongly opposes Caremark’s policy and enforcement efforts, they hold an upper hand in an audit situation and consider the Provider Manual an extension of the contract.
RxeedTM recently filed a tortious interference lawsuit against Caremark in the District of NJ for their aggressive policies that is deterring pharmacies from using their platform. PAAS has also seen MatchRx contact selling pharmacies to obtain the wholesaler invoice based on an audit at the purchasing pharmacy (pursuant to the MatchRx User Agreement, section 2.5).
PAAS Tips:
- Pharmacies should carefully weigh the pros and cons of purchasing inventory from other pharmacies (whether directly or indirectly)
- If you choose to purchase inventory from another pharmacy, make sure you have full details of the transaction, including:
- Pharmacy name, address, and NCPDP number transferring from
- Drug name, quantity, lot number, expiration date, and NDC number
- Date of transfer and date of receipt of drug
- Reason for transfer to prove specific patient need exemption (e.g., complete Rx #1234)
- Method or proof of payment (check # or credit card receipt)
- Copy of transferring pharmacy license
- Copy of invoices from transferring pharmacy to validate that they purchased from a licensed wholesaler
- See previous Newsline article from December 2022 Pharmacy to Pharmacy Inventory Transfers – Buyer Beware! for additional discussion about pharmacy marketplace purchases
High AWP Omeprazole leads to $2.3M Medicaid Fraud Case
An Ohio pharmacist and owner of four pharmacies, along with a technician, have been found guilty by a federal jury for Medicaid fraud to the tune of $2.3M dollars. The recent announcement by the Department of Justice states each were convicted on one count of conspiracy to commit health care fraud and two counts of defrauding Medicaid. Each guilty count carries a maximum of 10 years in prison – they are currently awaiting sentencing.
Investigators discovered the pharmacist and technician conspired a plan to bill Medicaid for the highest reimbursed NDC for omeprazole but dispense over-the-counter product. The discovery was made when inventory purchases for the NDC billed fell short of the number of units billed to Medicaid. Upon further investigation, it was found the product dispensed for these claims was purchased over-the-counter at a big box store. The pharmacy also billed Medicaid for omeprazole when no prescriptions existed. The submission of these claims was cited as false and fraudulent, leading to the charges and conviction.
Ensure your pharmacy has internal controls in place to avoid potential invoice shortage issues (e.g., NDC scanners at the filling station). Pharmacy staff must be trained to understand the importance of billing, filling, and purchasing the correct NDCs.
More than just training, PAAS’ FWA/HIPAA compliance program can help pharmacies prevent and detect potential FWA in the workplace.
2024 Self-Audit Series #2: DAW Codes
Prescriptions flagged for incorrect or invalid DAW codes is a discrepancy we have seen increase notably on PBM audit results. Pharmacy reimbursement and/or patient copay may be influenced by the DAW code billed providing another reason PBMs scrutinize so closely.
Auditors will look for …
PAAS National®® has created the: DAW Codes Explained chart with the NCPDP list of codes and their description.
PAAS Tips:
Numerous Sumatriptan Formulations Cause Headaches for Pharmacies, & Potential Recoupments
Sumatriptan is FDA approved for the acute treatment of migraine headaches, with or without aura. It is available in numerous formulations and strengths which can cause confusion during the filling and billing process. To decrease your risk of audit, and recoupment, be sure staff are aware of the nuances of sumatriptan and follow the guidance below.
6 mg/0.5 mL
20 mg/actuation
50 mg
100 mg
6 mg/0.5 mL
6 mg/0.5 mL
PAAS Tips:
Announcing the PAAS Rx Days’ Supply Calculator App
Pharmacy staff face numerous challenges in managing prescriptions effectively. Manually calculating the appropriate quantity or days’ supply of medications can be time-consuming and prone to errors, creating the potential for PBM audits. We are thrilled to announce the launch of the Rx Days’ Supply Calculator app, a revolutionary tool designed to simplify calculations for pharmacists and pharmacy technicians. Developed by PAAS National®, this innovative app aims to enhance accuracy and offer guidance on dispense quantities and billable days’ supply.
The PAAS Rx Days’ Supply Calculator offers a user-friendly interface designed to enhance efficiency and empower pharmacy staff with confidence:
We invite you to be proactive and experience the benefits of the PAAS Rx Days’ Supply Calculator today. Download the app for a free 7-day trial ($5.99/year thereafter) by visiting the Apple App Store or Android Google Play Store, or check out the website at PAASNational.com/app.
NDC Numbers: Not a Guarantee of FDA Approval
A common misconception that pharmacies have is that if a product has an NDC (National Drug Code) number that means it is approved by the FDA – unfortunately, this is not the case.
Products billed to Medicare and/or Medicaid that are not FDA approved are subject to recoupment. Examples include:
PAAS Tips:
Caremark Invoice Audits – Purchases from Other Pharmacies
Caremark invoice audits continue to plague many pharmacies and often result in substantial audit findings and, occasionally, network termination.
Inventory acquired from other pharmacies frequently causes problems, whether purchased directly from another pharmacy or indirectly through an online marketplace such as RxeedTM or MatchRX.
Caremark has a very rigid policy for these pharmacy purchases and will only give credit for such purchases if the purchasing pharmacy has sufficient documentation.
Section 8.05 of the Caremark Provider Manual outlines the following requirements:
For those Covered Items for which a Transaction Statement, Transaction History, and Transaction Information are not required by the DSCSA, Provider must maintain records of the exact quantities purchased, name of the Authorized Trading Partner, Covered Item name(s), NDC(s), date(s) of purchase, and proof of payment [e.g., copies of credit card receipts, canceled checks (front AND back)] (collectively “Documentation”). For those Covered Items received from other pharmacies, Provider must obtain and maintain the entire Transaction Statement, Transaction History, and Transaction Information from the selling entities.
For context, the Drug Supply Chain Security Act (DSCSA) allows such sales between pharmacies and requires that these transactions include the pedigree (aka Transaction Statement, Transaction History, and Transaction Information or “3Ts”) if they are for general stock replenishment. The DSCSA exempts transactions that are for a specific patient need and does not require the pedigree to be communicated, but Caremark seems unwavering.
PAAS National® has seen Caremark auditors request copies of the transferring pharmacy’s license and original invoices (and/or pedigree information) from the transferring pharmacy’s wholesaler. While PAAS strongly opposes Caremark’s policy and enforcement efforts, they hold an upper hand in an audit situation and consider the Provider Manual an extension of the contract.
RxeedTM recently filed a tortious interference lawsuit against Caremark in the District of NJ for their aggressive policies that is deterring pharmacies from using their platform. PAAS has also seen MatchRx contact selling pharmacies to obtain the wholesaler invoice based on an audit at the purchasing pharmacy (pursuant to the MatchRx User Agreement, section 2.5).
PAAS Tips:
Best Practices When Filling & Billing Afrezza®
Afrezza®, a rapid-acting insulin human inhalation powder for adults with either type 1 or type 2 diabetes mellitus, can cause confusion for prescribers, pharmacies, and patients alike.
Afrezza® is only available in specific unit cartridges – 4 units, 8 units, and 12 units. In instances where a patient requires a dose greater than 12 units, the patient will need to use additional cartridges to obtain the correct dose. Prior to filling the prescription, ensure the dose prescribed for the patient is obtainable. If the dose is not feasible, the prescription is at a high risk of recoupment on audit.
Cybersecurity Incident at Change Healthcare – Documentation is Key to Reducing Audit Risk!
Pharmacies are feeling the impact of the cyber-attack at Change Healthcare resulting in workflow nightmares. PAAS issued an email alert to members about audit risk on 2/23 (details contained herein). Change Healthcare, a health care technology company that is part of Optum, experienced a cybersecurity issue on February 21, 2024 which is impacting the ability of PBMs, and many healthcare providers nationwide, to process prescriptions through patients’ insurance.
It is not clear, how many partners of Change Healthcare were affected and to what degree. As this continues to further develop, pharmacies can sign up for updates here.
Pharmacies are continuing to fill prescriptions with a change or delay in processing until connections are restored with appropriate controls in place; however, it is important for all pharmacies to be conscious of audit risk.
The following areas represent the greatest audit risk:
PAAS has shared these concerns with NCPA, who is working diligently with CMS and PCMA to advocate against repercussions and recognize pharmacy sacrifices during this time.
Please feel free to contact us at (608) 873-1342 or info@paasnational.com should you have additional audit-related questions, PAAS is here to assist.
Bowel Prep Products – What Quantity and Days’ Supply to Bill?
PAAS National® last wrote an article on bowel prep products in June 2022 titled Bowel Prep Products – Days’ Supply Considerations. Since then, a few new products have been approved and added to the market. The most common PBM audit issue PAAS sees with bowel prep products is billing an incorrect days’ supply.
PAAS Tips:
Qualified Medicare Beneficiary (QMB) Program
Pharmacies may bill prescriptions from time to time for patients with dual eligibility, possessing both Medicare and Medicaid benefits. Some of these patients are eligible for the Qualified Medicare Beneficiary (QMB) program which provides Medicaid coverage of Medicare Part A and Part B premiums and cost sharing to low-income beneficiaries – CMS states that about 12% of Medicare patients were in this program in 2021.
Federal law prohibits Medicare providers (including pharmacies) from billing QMB patients for cost sharing amounts related to Medicare Part A or B covered items. QMB patients bare no legal obligation to pay cost sharing for these items – cost sharing amounts must only be billed to Medicaid. If there is a copay after billing Medicaid, pharmacies may collect this amount.
Pharmacies are most likely to encounter these situations when a dual eligible patient has a Medicare Advantage Plan (MAPD) and you are billing for Part B covered items like diabetic test strips, continuous glucose monitor supplies, or nebulizer drugs. Pharmacies may see a claim response of “Benefit Stage Qualifier (BSQ) 51” in NCPDP D.0 field 393-MV to alert you that items were covered under the Part B benefit and that balance billing is prohibited.
Please note that the QMB Program and prohibitions on collecting copays apply to Part B covered items only; pharmacies must continue to collect copays for Part D covered drugs.
PAAS Tips: