If you receive a prescription for a medication that you do not have in stock, you can purchase this medication from another pharmacy and are not required to obtain the tracing information.
However, if it’s not for a specific patient need, or for an amount that exceeds the prescription in question, it is likely not exempt from tracing requirements. With gross margin compression, it’s understandable that pharmacies may use marketplaces like MatchRx, Rxeed, EzriRx or others to find deals, but you must consider DSCSA requirements (i.e., not for anticipatory needs unless you’re obtaining tracing information). These marketplaces claim DSCSA compliance pursuant to a specific patient need (see Rxeed, MatchRx, and EzriRx).
Interestingly, both MatchRx and EzriRx use an identical “industry interpretation”:
Industry interpretation for Specific Patient Need includes situations in which a dispenser has a prescription in hand for an identified patient, a recurring prescription for an identified patient, or written/electronic notice from a provider that a prescription for an identified patient is forthcoming.
What’s not a specific patient need? Any time you are increasing or replenishing stock instead of dispensing the product when you receive it. On an invoice audit, PBMs expect a product to be dispensed in short order if the pharmacy is claiming exemption from tracing requirements pursuant to a specific patient need.
Here is an excerpt directly from the OptumRx Provider Manual:
‘Any inter-pharmacy transfers or purchases made through intermediary third parties or marketplaces for the purpose of increasing or replenishing stock, and not made to fulfill a specific patient need for an identified patient, are subject to the requirement to obtain transaction history, transaction information, and a transaction statement for the product.’
The industry interpretation language for “a recurring prescription for an identified patient” has no direct reference and is not likely to hold weight with PBMs as they interpret laws as they see fit. Absent state/federal regulations to the contrary, pharmacies will have a hard time convincing PBMs that a specific purchase transaction is exempt from tracing requirements for a recurring prescription dispensed several weeks, if not months, later.
Another exemption that these marketplaces reference is purchases under a declared public health emergency (PHE). While pharmacies have become accustomed to the term since COVID, there are a multitude of currently declared PHEs ongoing simultaneously, including the Opioid Crisis (since 2017) and now Monkey Pox (2022). However, the exemption only applies when the drug shortage is a result of the PHE. Under DSCSA 581(24)(B)(iii) it states:
‘the distribution of a product for emergency medical reasons including a public health emergency declaration pursuant to section 319 of the Public Health Service Act, except that a drug shortage not caused by a public health emergency shall not constitute an emergency medical reason;’
If you are purchasing a medication that is not for a specific patient need, and readily available from your primary wholesaler, it would be difficult for a pharmacy to demonstrate that they were exempt from tracing requirements in a pharmacy-to-pharmacy transaction as a result of a drug shortage related to the PHE.
Regardless, when purchasing non-controlled inventory from another pharmacy, documentation should include:
- Pharmacy name, address, and NCPDP number transferring from
- Drug name, quantity, lot number, expiration date, and NDC number should all be included on the transfer invoice
- Date of transfer and date of receipt of drug
- Reason for transfer (e.g., complete Rx #1234)
- Method or proof of payment (check # or credit card receipt)
Invoice shortages or invalid purchases put claims at risk of recoupment and may lead to the pharmacy having to implement a corrective action plan. In some cases, shortages can even lead to contract termination. Be sure you consider all the risks when making purchases to supplement your primary wholesaler. Would you be able to show DSCSA compliance (or exemption) and provide all required documentation necessary in case of an audit?
PAAS Tips:
- Anticipatory purchasing from another pharmacy to restock supply requires DSCSA tracing information
- DSCSA exemptions for PHEs apply only when the drug being purchased is in short supply due to the PHE
- When purchasing for a Specific Patient Need, make sure to document accordingly and only procure the necessary amount for the prescription
- Be sure to retain all supporting documentation related to the purchase and have accessible in the event of an invoice audit
Caremark Bulk Purchase Requirements
As 2022 comes to a close, we know that many pharmacies will make “bulk purchases” ahead of the new year in anticipation of price increases or to obtain wholesaler rebates. Remember that Caremark requires pharmacies to provide notice of any bulk purchases that may impact future invoice audits, in accordance with Section 8.05 of the Caremark Provider Manual.
If your pharmacy plans to make any large purchases, be sure to
Pharmacies should submit notifications to the addresses provided below.
Email: PharmacyAudit@CVSHealth.com
Mail:
CVS Caremark
Attn: Bulk Purchase Notification, MC 020
9501 E. Shea Blvd. Scottsdale, AZ 85260
PAAS National® analysts have seen a few Caremark response letters that state the following, “review of the recent purchases made show they are routine in nature and would not be considered a bulk purchase”. It is unclear what criteria are used to make this determination; however, PAAS believes it is in your best interest to submit such notifications when the purchases are larger than what is “normal” for your pharmacy. We suggest that pharmacies retain this response from Caremark such that you could use it in the event of a future audit to demand that these purchases are included.
Lastly, some pharmacies have been confused by automatic email replies from Caremark with subject of Automatic Reply: Pharmacy Audit and the body of the email stating that the email address is a general mailbox for potential pharmacy audit issues and provides further instructions on how to submit “internal requests” and “external requests”. PAAS has confirmed that these are simply automatically generated replies and that pharmacies will receive a response specific to the bulk purchase notification within a few days.
PAAS Tips:
On-Demand Webinar: Don’t Give PBMs a Reason to Audit (Or Terminate): Off-Label Drug Use and Compliance Requirements
On November 9, 2022 PAAS National® hosted “Don’t give PBMs a reason to audit (or terminate): Off-label drug use and compliance requirements” webinar. PAAS Audit Assistance members have access to the recorded webinar, in addition to many other tools and resources on the PAAS Member Portal.
For easy viewing, we’ve split the webinar into three separate recordings.
Pharmacy to Pharmacy Inventory Transfers – Buyer Beware!
Drug shortages are pervasive to pharmacy practice – NCPA just reported an astonishing 98% of community pharmacies are experiencing drug shortages. As entrepreneurs, community pharmacy owners have always found creative ways to take care of patients. Pharmacy to pharmacy transfers are commonplace in the industry, but much has changed since Lipitor® and Prevacid® were used as currency in a legal drug exchange.
The Drug Quality and Security Act was enacted by Congress November 27, 2013. Title II of this Act was the Drug Supply Chain Security Act (DSCSA), which “outlines steps to achieve interoperable, electronic tracing of products at the package level to identify and trace certain prescription drugs as they are distributed in the United States”. The goal of the DSCSA is to secure the US drug supply chain and protect consumers from exposure to drugs that may be counterfeit, stolen, contaminated, or otherwise harmful. The FDA expects that the vast majority of prescription drug products, that are ultimately dispensed to US consumers, have flowed through the “tracked” and “traced” supply chain. The law provides for very limited exceptions where prescription medications can be sourced outside of the tracked and traced system.
In an FAQ published by the FDA, the issue of pharmacy to pharmacy transfers is addressed:
When a pharmacy sells a product to another pharmacy, do the DSCSA product tracing requirements related to transaction history, transaction information and transaction statements apply?
Yes, except for sales by a dispenser to another dispenser to fulfill a specific patient need. The law defines a “specific patient need” as the transfer of a product from one pharmacy to another to fill a prescription for an identified patient and does not include the transfer of a product from one pharmacy to another for the purpose of increasing or replenishing stock in anticipation of a potential need. You can find more information in sections 581(19) and 582(d)(1)(A)(ii) of the FD&C Act.
So, what does this mean for your pharmacy?
However, if it’s not for a specific patient need, or for an amount that exceeds the prescription in question, it is likely not exempt from tracing requirements. With gross margin compression, it’s understandable that pharmacies may use marketplaces like MatchRx, Rxeed, EzriRx or others to find deals, but you must consider DSCSA requirements (i.e., not for anticipatory needs unless you’re obtaining tracing information). These marketplaces claim DSCSA compliance pursuant to a specific patient need (see Rxeed, MatchRx, and EzriRx).
Interestingly, both MatchRx and EzriRx use an identical “industry interpretation”:
Industry interpretation for Specific Patient Need includes situations in which a dispenser has a prescription in hand for an identified patient, a recurring prescription for an identified patient, or written/electronic notice from a provider that a prescription for an identified patient is forthcoming.
What’s not a specific patient need? Any time you are increasing or replenishing stock instead of dispensing the product when you receive it. On an invoice audit, PBMs expect a product to be dispensed in short order if the pharmacy is claiming exemption from tracing requirements pursuant to a specific patient need.
Here is an excerpt directly from the OptumRx Provider Manual:
‘Any inter-pharmacy transfers or purchases made through intermediary third parties or marketplaces for the purpose of increasing or replenishing stock, and not made to fulfill a specific patient need for an identified patient, are subject to the requirement to obtain transaction history, transaction information, and a transaction statement for the product.’
The industry interpretation language for “a recurring prescription for an identified patient” has no direct reference and is not likely to hold weight with PBMs as they interpret laws as they see fit. Absent state/federal regulations to the contrary, pharmacies will have a hard time convincing PBMs that a specific purchase transaction is exempt from tracing requirements for a recurring prescription dispensed several weeks, if not months, later.
Another exemption that these marketplaces reference is purchases under a declared public health emergency (PHE). While pharmacies have become accustomed to the term since COVID, there are a multitude of currently declared PHEs ongoing simultaneously, including the Opioid Crisis (since 2017) and now Monkey Pox (2022). However, the exemption only applies when the drug shortage is a result of the PHE. Under DSCSA 581(24)(B)(iii) it states:
‘the distribution of a product for emergency medical reasons including a public health emergency declaration pursuant to section 319 of the Public Health Service Act, except that a drug shortage not caused by a public health emergency shall not constitute an emergency medical reason;’
If you are purchasing a medication that is not for a specific patient need, and readily available from your primary wholesaler, it would be difficult for a pharmacy to demonstrate that they were exempt from tracing requirements in a pharmacy-to-pharmacy transaction as a result of a drug shortage related to the PHE.
Regardless, when purchasing non-controlled inventory from another pharmacy, documentation should include:
Invoice shortages or invalid purchases put claims at risk of recoupment and may lead to the pharmacy having to implement a corrective action plan. In some cases, shortages can even lead to contract termination. Be sure you consider all the risks when making purchases to supplement your primary wholesaler. Would you be able to show DSCSA compliance (or exemption) and provide all required documentation necessary in case of an audit?
PAAS Tips:
Authorized Distributors of OTC Diabetic Test Devices
Most pharmacies are familiar with the basic requirements of the Drug Supply Chain Security Act (DSCSA), including the requirement to purchase prescription products from authorized suppliers. However, one important caveat of the DSCSA is that it does not apply to OTC products (such as diabetic test strips). Because of this, OTC wholesalers and distributors do not have to maintain or provide track and trace information (pedigree) to confirm the authenticity of these products. This makes it difficult for pharmacies to determine if they are purchasing from an appropriate source and if the low prices offered are for legitimate product.
During a PBM invoice audit, purchases made from suppliers that are not identified as “authorized” may not be accepted and you may be found to have a shortage leading to significant financial recoupments and possible network termination.
PAAS Tips:Join today!
- Both Express Scripts and Caremark have required pharmacies to purchase test strips from “authorized distributors” of the manufacturer since 2016
- See California’s public listing for a comprehensive list
- OptumRx requires pharmacies purchase from suppliers that are licensed wholesalers and have NABP Drug Distributor Accreditation (DDA) formerly known as VAWD
- Note that VAWD/DDA is not synonymous with “authorized distributor” status
- For example, Masters Pharmaceutical has NABP DDA status but is NOT an authorized distributor of diabetic test strips
- Some pharmacies have made the mistake of seeing “McKesson” on authorized distributor list and assumed that a subsidiary such as “Masters” is also authorized, even though not explicitly listed as such – if not explicitly listed, then confirm before purchasing
- See August 2021 article Invoice Audit Pitfalls – Are Your Wholesalers Legitimate? for additional invoice audit considerations
Product Substitution Best Practices
Consider a scenario where your pharmacy has been dispensing a product for years and you find that the product is being discontinued, requiring a product substitution. What steps should be taken to ensure your pharmacy is protected in case of an audit?
Most recently, this has been the case for pharmacies dispensing ProAir® HFA. Since it now has been discontinued and supplanted with ProAir RespiClick®, can the product be substituted without needing to contact the prescriber?
Before automatically substituting, it would be wise to review a product’s therapeutic equivalence. Drugs approved under a New Drug Application (NDA), or Abbreviated New Drug Application (ANDA), will be found in the FDA Orange book and use Therapeutic Equivalency (TE) Codes to establish equivalency ratings. Biologics, on the other hand, are approved under a Biologic License Application (BLA) and will be found in the FDA Purple Book. The Purple Book does not use TE codes, but rather matching color cards and category headers to indicate biosimilars and interchangeable biosimilars.
Beyond the TE Codes (primarily used to identify generic equivalents), compare the original product’s NDA to the NDA of the product you are looking to substitute. To continue with the ProAir® example, consider the NDA of both ProAir® HFA and ProAir RespiClick®:
Since the NDA numbers do not match, it would be appropriate to obtain prescriber approval and document authorization to substitute the ProAir RespiClick® for the ProAir® HFA. When requesting the change, consider obtaining a new order to help mitigate audit risk. Substituting the RespiClick on the same Rx Number has a higher likelihood to flag for potential audit.
PAAS Tips:
NCPDP Modified Section 11.15 of the Emergency Preparedness Guidance Document – COVID-19 Oral Antivirals Billing
NCPDP Emergency Preparedness Guidance document version 1.15 was published in August 2022. PAAS would like to point out some of the updates and additions to section 11.15 of the document Billing of a Self-Administered Free COVID-19 Oral Antiviral During an Emergency.
PAAS Tips:Join today!
- Like the COVID-19 vaccines, oral therapeutics are currently purchased by the federal/state government and must be dispensed with no cost to the patient
- Before a pharmacist prescribes an oral antiviral to treat COVID-19 under the EUA, they must make an assessment and determine if the patient meets the criteria
- When billing a claim for a no-cost product, the claim request uses standard fields with applicable pricing and professional service identifiers
- Section 11.15.1 is now titled Free Product Dispensing with Unique Dispensing Requirements, (e.g., patient education/counseling for the Dispensed Medication)
- Added diagnosis code and prescriber ID bullets
- Professional service code – removed “AS” and modified the “PE” description – (Patient Education (PE) should be submitted on the claim to identify the unique dispensing requirements)
- Modified the incentive amount submitted descriptions
- Updated the example table
- Added insurance segment, origin code segment, and prescriber segment
- Changed the DUR/PPS segment professional service code value to PE – patient education
- Added an entire claim response to the example
- To help standardize how these claims are processed, NCPDP recommends billing separate claims for the following:
- Product dispensing (B1 claim) See section 11.15.1 for correct claims processing
- Patient assessment (S1 or B1 with the 11-digit EUA patient assessment product/service ID)
- Once an assessment is complete, it could be determined the patient does not meet the criteria – pharmacy should bill a patient assessment only claim – see link to section 11.16 below
- If a completed assessment results in the product being prescribed, the pharmacy may need to submit the claim for the patient assessment to one payer and the claim for the product to another payer
- Inserted new section 11.16, Billing of Patient Assessment, Professional Services Associated to EUA COVID-19 Oral Antiviral Pharmacist Prescriptive Authority
Review February 2022 Newsline, COVID-19 Oral Therapeutics Antiviral Billing Guidance for more information on billing guidance from NCPDP
Tips for Tackling PBM Audits—Together
Published November 8, 2022 by Miranda Hester on Drug Topics
Working collaboratively can be key to either avoiding a PBM audit altogether or making the process as painless as possible.
They nearly always cost pharmacies money and require a lot of work to complete, but pharmacy benefit manager (PBM) audits are an unfortunate fact of life. At the National Community Pharmacists Association 2022 Annual Convention & Expo, presenters shared their insights into how pharmacists can tackle these audits in the most effective way possible.
Curious why audits happen? It’s as simple as rising health care costs and improvements in data analytics that find outliers more easily, according to Dana Westberg, CPhT, analyist at Pharmacy Audit Assistance Service (PAAS), to say nothing of the revenue generated by them, as one of the most common penalties is financial recovery. Bad actors also make PBM audits necessary: Westberg cited 2 cases, one involving a pharmacy in Texas that had $10 million in dispensing expenses and another involving pharmacy owner/accountant who was indicted for a $1.5 million scam.
Trent Thiede, PharmD, MBA, PAAS president, cited his own examples of bad actors, including one case of a pharmacist who billed products that were never dispensed over a period of time that netted $7.2 million, another about a group of ghost pharmacies in Miami that billed for products for pharmacies that did not exist, purchased no prescription drugs, had no real customers, and performed no actual pharmacy business.
Those bad actors have led to a 50% increase in audits over 5 years. Desktop audits remain the most common form. Onsite audits decreased with the onset of COVID-19, but were replaced by virtual audits, which “tend to be very large, very time consuming and you also have a phone interview with the auditor,” according to Westberg.
Westberg shared 4 strategy elements to prevent audits, which include…
DMEPOS Mini-Series #7 – Immunosuppressive Drugs for Transplant
This month, we continue with our DMEPOS mini-series by discussing yet another challenging category –Join today!
- Must be used for a covered transplant:
- Kidney, heart, liver, bone marrow/stem cell, lung, or intestinal
- Pancreas, in limited situations – See the Local Coverage Determination (LCD) link under PAAS tips for detailed requirements
- The transplant was performed at a Medicare-approved facility
- The beneficiary was enrolled in Part A at the time of the transplant
- The beneficiary was enrolled in Part B at the time the drugs were dispensed
- Delivery requirements – See the LCD link under PAAS tips for detailed requirements
- Standard Written Order
- See our April 2021 Newsline, DMEPOS Documentation Requirements
- Medical Records
- Must indicate the date and location where the transplant occurred
- These records can be obtained from the original hospital discharge after the transplant or a current visit as long as the date and location are mentioned
- Pharmacies should maintain these records in the patient’s file for any future audits
- Continued need and use of immunosuppressive medication is established at the time of the transplant pending it continues to function successfully
- Proof of Refill Request (PORR – requirement if delivered or mailed) must contain:
- Name of the beneficiary, date of the request, description of item, quantity remaining or proof of exhaustion
- PORR may not be obtained more than 14 days before exhaustion of current supply or delivered/mailed to the patient more than 10 days before exhaustion
- Proof of Delivery
- See our June 2021 Newsline, DMEPOS Proof of Delivery and Refill Request Requirements
- Medicare limits the quantity on immunosuppressive drugs dispensed to a 30-day supply
- Auto-immune disorders like arthritis, lupus and psoriasis can be treated with immunosuppressives
- Medicare Part B does not pay for immunosuppressives for beneficiaries who do not meet the transplant coverage criteria, bill Medicare Part D instead
- Document a diagnosis code on immunosuppressives that are being used for non-transplant indications when billing for Part D
- See the LCD, checklists and other helpful forms and billing guidance under your DME MAC
- Jurisdiction B and C, CGS: LCD, Checklist
- Jurisdiction A and D, Noridian: LCD, Checklist
Documentation needed upon an audit on immunosuppressive drugs for a transplant:
PAAS Tips:
OIG Telehealth Fraud Concerns
In September 2022, the U.S. Department of Health and Human Services Office of Inspector General (OIG) put out a report on program integrity risks concerning Medicare telehealth services during the first year of the COVID-19 pandemic. The OIG states that in the first year of the pandemic, more than 28 million Medicare beneficiaries (roughly 2 in 5) used telehealth – amounting to a dramatic 88-fold increase from the previous year. Because of this, the OIG wanted to find out if providers were appropriately billing telehealth services, while looking to identify the best way to further protect the Medicare program and beneficiaries from fraud, waste, and abuse (FWA).
The OIG did some brief data analysis of telehealth claims from March 1, 2020 through February 28, 2021 of 742,000 providers. They found that 1,714 providers posed a high risk to Medicare due to concerning billing practices like; billing for services that were not medically necessary or that were never provided. Other reasons for scrutiny included being in the same medical practice as another provider who engaged in high-risk billing practices (i.e., guilt by association).
High risk providers were identified by the OIG when they billed:
The OIG’s recommendations to CMS included strengthening target oversight and monitoring of telehealth services, providing education on appropriate billing for providers, improving transparency, identifying companies who provide telehealth to Medicare beneficiaries, and following up with providers identified in the OIG report as high risk.
PAAS Tips:
Missing DUR and SCC Documentation Can Lead to Recoupment!
Many pharmacy teams are overwhelmed with the increasing daily workload. This can result in data entry staff creating shortcuts, like entering override codes to get claims processed. PAAS National® wants to remind pharmacies that lack of documentation to support clinical drug utilization review (DUR) or submission clarification codes (SCC) can put claims at risk of audit recoupment.
In particular, Express Scripts® and Prime Therapeutics® audit for DUR and SCC documentation. High dollar claims submitted with override codes are frequently flagged for audit. The Express Scripts® Provider Manual addresses Prospective/Concurrent Drug Utilization Alerts and the mitigating DUR override codes. The guidance compels the dispensing pharmacist to document the rationale for the override on the prescription.
Pharmacists must be made aware of DUR messages at point-of-sale and use professional judgement before proceeding with dispensing. These DUR rejects are in place to prevent potential harm to patients. Allowing these claims to automatically be overridden without pharmacist review goes against the PBM Provider Manual, risks patient safety and can lead to claim recoupment.
DUR codes can be found as follows:
Pharmacists must review each Service Code and, using professional judgement, submit the appropriate Professional Service Code and Results of Service Code. Simply documenting the override codes utilized does not provide the auditor with explanation of why it was appropriate to use the code; be sure to have a full clinical note explaining the situation. This documentation must be accessible for auditor’s review.
Claims billed with SCC codes also require documentation. Remember, the PBM can see the initial claim rejection and resubmission with an override code. This second claim is an easy target for audit.
Here is a short list of commonly used SCC codes as defined by NCPDP:
PAAS Tips: