Having an integrated point of sale (POS) system tying the prescription number, date of sale, amount collected, and method of payment all together is key to passing an audit. It has become increasingly difficult for pharmacies without a POS system to prove copays were collected at the point of sale.
Other things to consider when proof of copay collection is required:
Credit card receipts should include:
- The last four digits of the credit card number
- The transaction authorization number
- The merchant ID number
Payment by check may require copies of cancelled checks, front and back.
Payment by cash may require proof of cash bank deposits being made during the timeframe under audit.
Reduction of copay due to a secondary payer (coupon or secondary insurer) may also require proof including:
- A print screen showing adjudication to the secondary insurer
- Secondary payer plan information like the BIN, PCN, Patient ID, and group number
- Any eVoucher data applied by the switch
- Amount paid and any remaining out of pocket amount
If using a house charge account, you should be able to produce the following:
- Policy and Procedure for collection of monies due on the account
- Documented attempts to collect payment in the form of dated invoices sent to the patient and logged phone calls attempting to collect
- Itemized Accounts Receivable report showing payment received, tying the payment back to the prescription number, and any outstanding balance remaining
If waiving a copay due to financial hardship, you will need objective evidence of that hardship, like an application, tax returns, and a formal written Policy and Procedure. It cannot be advertised or promoted, nor funded, in whole or in part, by a third party. It also must meet all requirements and restrictions of applicable law.
Non-routine, unadvertised waivers of copayments based on individualized determinations of financial need for patients with Medicaid may be acceptable without a financial hardship Policy and Procedure.
PAAS Tips:
- Use an integrated POS system to reduce risk of recoupment
- Copays should be collected at the time of sale as a best practice
- House charge accounts require a strong Policy and Procedure for collection
- Ensure good cash handling policies
- Make bank deposits at regular intervals
- Avoid taking money directly from the register for business expenses
- Balance the register at the end of the day
- See the following Newsline articles for more information:
- PAAS Fraud, Waste & Abuse and HIPAA Compliance members should review section 1.5 – Copay Collection in your Policy and Procedure Manual
New COVID-19 Booster Dose & The Final Frontier of the PREP Act
On February 28th, the CDC endorsed an additional updated 2023-2024 COVID-19 vaccine dose for adults 65 years or older due to the increased risk of serious COVID-19 outcomes in that patient population. The approval of an additional dose brings the question of what submission clarification code (SCC) may be required. Coinciding with the transition from US government supplied COVID-19 (EUA) vaccines, commercially available vaccines no longer required an SCC due to their approval as a single-dose vaccine. Now that an additional dose has been approved, it remains to be determined if payors will want an SCC. Many payors (e.g., OptumRx and Medi-Cal) still have the SCC requirements for the original series in their Provider Manuals. In addition, the American Medical Association (AMA), the entity that supplies CPT codes for medically based services, has deactivated CPT codes associated with specific COVID-19 dose vaccines (i.e., First, Second, Third, Booster).
As a reminder, the Public Readiness and Emergency Preparedness (PREP Act) was amended by Secretary Becerra for the eleventh time on May 12, 2023. As stated on the Administration for Strategic Preparedness & Response’s (ASPR) PREP Act Questions & Answers webpage, the amended PREP Act “authorize[s] pharmacists to continue to administer COVID-19 and seasonal influenza vaccines to individuals aged three and above and order and administer COVID-19 tests in accordance with an FDA license, approval, or authorization through December 31, 2024.” Ultimately, this means that under the changes made in the Eleventh Amendment of the PREP Act, there will be liability protections in place for COVID-19 vaccines and tests, along with seasonal influenza vaccines through December 31, 2024.
PAAS Tips:
Documentation is Essential for Prescription Quantity Changes
Anytime a pharmacy dispenses a quantity different than what the prescriber ordered, there should be a reason documented on the prescription for the decreased or increased quantity.
PAAS Tips:
Required: Proof of Patient Copay Collection
All PBM agreements contain language requiring pharmacies to collect copays and be able to prove those copays were collected if audited. Copays are used by insurers to help patients understand the cost of their medications and encourage less expensive alternatives. Pharmacies who reduce or waive copays adjudicated by the PBM risk full recoupment of those claims if audited, and possible contract termination.
How do you prove a copay was collected?
Other things to consider when proof of copay collection is required:
Credit card receipts should include:
Payment by check may require copies of cancelled checks, front and back.
Payment by cash may require proof of cash bank deposits being made during the timeframe under audit.
Reduction of copay due to a secondary payer (coupon or secondary insurer) may also require proof including:
If using a house charge account, you should be able to produce the following:
If waiving a copay due to financial hardship, you will need objective evidence of that hardship, like an application, tax returns, and a formal written Policy and Procedure. It cannot be advertised or promoted, nor funded, in whole or in part, by a third party. It also must meet all requirements and restrictions of applicable law.
Non-routine, unadvertised waivers of copayments based on individualized determinations of financial need for patients with Medicaid may be acceptable without a financial hardship Policy and Procedure.
PAAS Tips:
2024 DMEPOS Series #2: Nebulizer Solutions
Many pharmacies struggle with DMEPOS audits due to the complexity in medical billing and the onerous documentation requirements. Medicare Part B suppliers need to be able to produce all the required documentation if audited, and make sure all documentation meets Medicare Part B standards. This DMEPOS series is intended to help you understand these complexities and gather the needed documents.
In particular, you should be able to show the following if audited on nebulizer solutions:
Common reasons for Medicare B to deny a nebulizer claim include:
PAAS Tips:
Caremark Notice of Breach – Aberrant Practices and Trends
PAAS National® analysts have recently assisted multiple pharmacies that received faxed notifications from Caremark that their pharmacy has “breached” the PBM Agreement by exceeding an arbitrary 25% threshold (by $ or # of claims) on the Aberrant Product List for their total claims dispensed in January 2024.
Affected pharmacies must …
Caremark suggests that pharmacies perform a monthly review of the most current Aberrant Product List and educate pharmacy staff about the aberrant product list, with a specific emphasis on purchasing personnel, to avoid inadvertent breaches due to unawareness.
Caremark created an Aberrant Product List in November 2019 and states that while these products are a covered benefit, pharmacies may only dispense up to (but no more than) 25% of their Caremark claims in a given month. The list has grown from 7 to 15 pages over the past 4 years and includes specific NDCs that are high cost.
PAAS Tips:
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: