Akorn Agrees to Pay Nearly $8 Million to Settle False Claims Allegations

Akorn Operating Company LLC (Akorn) has agreed to pay $7.9 million for allegedly violating the False Claims Act causing Medicare to pay for invalid prescription drugs according to a recent Department of Justice press release. The pharmaceutical manufacturer was cited for causing the submission of false claims to Medicare Part D by continuing to sell generic drugs under “prescription only” (Rx-only) labeling after the brand name drugs were converted to OTC products. Medicare Part D does not reimburse for OTC drugs.

Brand name Rx-only drugs can be converted to OTC with FDA approval. Manufacturers of generic equivalents must then either seek approval for converting their product to OTC or seek withdrawal of their generic’s Rx-only approval and stop distribution.

The generic drugs in question are diclofenac sodium 1% gel, olopatadine hydrocholoride 0.1% and 0.2% eye drops, and azelastine hydrochloride 0.15% nasal spray. Diclofenac and olopatadine converted from Rx-to-OTC in February 2020 and azelastine converted in June 2021.

Instead of pursing approval or withdrawal of their own generics, Akorn admittedly continued to manufacture and sell these products with Rx-only labeling to increase profit for the company, even after learning of the Rx-to-OTC switch of the brand name drugs. Eventually, Akorn applied for OTC conversion with the FDA for olopatadine in January 2021 and diclofenac in March 2021. For azelastine, they applied for withdrawal rather than conversion in January 2022. FDA approved this withdrawal in February 2022.

Whistleblowers in this case under qui tam provisions will receive approximately $946,000 of the recovery.

Yes, LTC Delivery Manifests ARE Needed!

PAAS National® analysts often see LTC pharmacies struggle with providing sufficient documentation to satisfy proof of dispensing for an audit. Below are a few commonly asked questions and answers about LTC delivery manifests – follow the advice below to decrease your risk of recoupment.

Become an audit assistance member today to continue reading this article. As a member, you’ll have access to hundreds of articles and receive our monthly proactive newsletter!

Join today!

Do LTC pharmacies have to maintain proof of delivery?

Yes! If audited, LTC pharmacies must have proof that the medications billed were indeed dispensed, and if you are dispensing a 28-day cycle in 7-day increments, you should have four manifests for each cycle. Proof of dispensing should be readily retrievable for the same length of time as your prescription records. The longest record retention requirement is usually for Medicare and is 10 years plus the current contract year.

Do the PBM return-to-stock (RTS) time frames apply to LTC medications?

Yes! LTC pharmacies must abide by RTS time frames. Though LTC pharmacies generally require additional time from when a claim is billed to when it is delivered to appropriately package and verify medications for facilities, the medications must still be dispensed within the RTS limit. Upon audit, claims found to be dispensed outside the RTS limit will be subject to full recoupment with a difficult appeal pathway. Refer to the PAAS Return to Stock tool found under the ‘Days Supply Charts’ in the left navigation on the PAAS Member Portal for the RTS limit of over a dozen PBMs. Also, medications delivered before they are billed are at risk for full recoupment so be sure the delivery date is on/after the date of service billed. If your pharmacy routinely sets claims for future adjudication, be cognizant of the delivery date to avoid this pitfall.

What elements should be on a LTC delivery manifest?

Humana publishes the most comprehensive guidelines for LTC audit documentation requirements and their guidelines are conservative enough to satisfy most, if not all, PBMs. According to Humana, a signature log for LTC requires:

a. Patient name

b. Date of service

c. Prescription number(s)

d. Facility name

e. Date of delivery to facility

f. Signature of individual who accepted delivery at the facility

The auditor did not accept my delivery manifest because the delivery date was missing, but the manifest date was printed on our papers – why was it not accepted?

Auditors require handwritten delivery dates on LTC signature logs to show the true dispensing date. A pre-printed date on the manifest is a function of when the manifest was created. Without the handwritten date, there is no way to prove that medication was dispensed on the same date the manifest was printed, therefore, pre-printed dates are generally not accepted by auditors.

Are there any waivers in place due to the COVID-19 public health emergency?

The COVID-19 Public Health Emergency (PHE) was renewed again by the Secretary of Health and Human Services on October 13th which extended the “end date” an additional 90 days. Most PBMs have their signature waivers tied to the PHE and will accept other forms of documentation in lieu of an actual signature. While these waivers are in place, it is important to note that proof of dispensing is still mandatory! The best practice is to document “COVID-19 delivery” with the date and time along with the name or initials of the delivery person, plus the name of the person receiving the medication. It should be noted, however, that a few state Medicaid programs have reinstated the signature requirement. Refer to the PAAS COVID-19 PBM Concessions document for additional details.

“Unauthorized Refills” Audit Discrepancies; How Does This Happen?

Audit results flagging “unauthorized refills” or “overbilled quantity,” can lead to big recoupments. These discrepancies can take significant time and effort for pharmacies to appeal. PAAS National® wants to help educate pharmacies on why this might be happening on your claims, and how to prevent recoupments.

Many states allow pharmacists to increase the dispensed quantity on a prescription without contacting the prescriber for authorization (check with your state’s allowances to ensure you are complying appropriately). Having documentation to support the reason the dispensed quantity changed from the written quantity is recommended to avoid audit issues. See last month’s Newsline article, Quantity Changes Require Documentation.

Consider the FDA guidance for dispensing insulin pens in the unopened (sealed) carton. Pharmacies can fall into the trap of over dispensing what the prescriber has approved. While this is the appropriate way to dispense insulin pens, pharmacies must be aware how over dispensing can happen. PBM auditors are looking at the total quantity prescribed on the prescription. When a prescription is written for a quantity less than the package size, any increased amount must be authorized by the prescriber or be taken out of the total refill quantity (in states that allow accelerated/consolidated refills).

Here is an example:

Become an audit assistance member today to continue reading this article. As a member, you’ll have access to hundreds of articles and receive our monthly proactive newsletter!

Join today!
Lantus Solostar® written for 9 mL with 3 refills

  1. Pharmacy dispenses a full box (15 mL) to follow FDA guidelines
  2. Prescription is refilled 3 additional times
  3. Total amount prescribed is 9 mL x 4 = 36 mL
  4. Total amount dispensed is 15 mL x 4 = 60 mL
  5. Without a clinical note authorizing the increase in quantity prescribed, the pharmacy over dispensed by 24 mL

Insulin pens are not the only prescriptions to watch, other medications that are dispensed according to package size can also be at risk. Software systems should track this information for you, but only if the data has been entered correctly.

PAAS Tips:

Three Common Pitfalls to Avoid When Billing Oral Inhalers

Oral inhalers remain a high audit risk for all PBMs and being able to identify billing pitfalls may mean the difference between a claim safe from recoupment and one lost due to an improper DAW code, early refill, or overbilled quantity.

Become an audit assistance member today to continue reading this article. As a member, you’ll have access to hundreds of articles and receive our monthly proactive newsletter!

Join today!

DAW Codes

Pharmacies are likely used to seeing generic equivalents of Symbicort®, Ventolin®/ProAir®/Proventil® HFA, and Advair Diskus® inhalers by now, but may still be adjusting to the newly released authorized generics of Breo Ellipta® and Flovent® HFA. If a multi-source brand name is being billed with a DAW other than zero, be sure there is supporting documentation such as:

  • DAW 1 (prescriber prefers brand),
  • DAW 2 (patient prefers brand), or
  • DAW 9 (plan prefers brand).

Atypical Directions

Symbicort®, Flovent® HFA and QVAR RediHaler® are examples of retail packages containing 120 puffs, likely based on standard directions of two puffs twice daily, conveniently equating to a 30 days’ supply. However, auditors realize they are commonly prescribed as one puff twice daily. While this change to the directions might seem minor, it doubles the days’ supply for one inhaler – from 30 to 60 days.

Consider the implications: If the script reads one puff twice daily and the pharmacy accidently bills the claim for 30 days instead of 60 days, the prescription could easily be refilled early [mistakenly] and the pharmacy that continues to fill the inhaler every 30 days would end up with every other month recouped upon audit for being filled too soon.

This can also happen when the plan limit is set up as a maximum of 30 days and the pharmacy is forced to bill the claim for a 30 days’ supply. Remember, claim adjudication logic (and subsequent rejections) for refill too soon are only effective if the inputted/transmitted days’ supply is accurate.

Alternatively, if the claim is inappropriately billed as three devices as a 90-day supply but it truly would last 180 days based on directions of one puff twice daily, each claim could be flagged for partial recoupment due to billing a supply larger than the plan limit.

Prescribed Quantity

Watch the quantity and unit of measure fields closely on electronic prescriptions for oral inhalers. Prescribers may inadvertently prescribe a quantity of “1 gm” when they truly meant to send over a prescription for “1 inhaler” – these errors should be clarified with a member of the prescriber’s team and documented with a full clinical note prior to dispensing.

PAAS Tips:

  • Calculate and bill the true days’ supply based off the directions on the hard copy. If the true days’ supply rejects, follow the Can You Bill It as 30 Days? guidance located on the PAAS Member Portal
  • A clinical note should include
    • Date
    • Name and title of who you spoke with at the prescriber’s office
    • The clarification
    • The name or initials of the pharmacy staff member documenting the change
  • Refer to the following Newsline articles regarding DAW codes:
  • Print out and post the updated Oral Inhaler Chart for pharmacy billing staff to reference

Are You Prepared for an OTC COVID-19 Test Audit?

Billing and dispensing OTC COVID-19 tests is widespread throughout community pharmacies. PAAS National® wants to make sure pharmacies are prepared to provide the correct documentation in case of an audit. To date, PAAS has seen:

  • Desk/invoice audits from Caremark, MedImpact and Prime Therapeutics,
  • Regular desk audits from Humana

While the dollar amount of these claims does not seem audit worthy, PBMs are checking for Fraud, Waste and Abuse and contract violations. The PBMs have been known to reach out to the member to verify quantity, manufacturer, and proof of receiving the test kits from the pharmacy.

PAAS has created a COVID-19 Resources section for our members on the PAAS Member Portal. Here you can find the Medicare and Commercially-Insured Patient Request and Attestation for OTC COVID-19 Test Billing and Frequently Asked Questions . These documents have been created for our members to help answer questions and ease the documentation burden so pharmacies can save time and be audit ready.

What documentation to have in case of an audit:

Become an audit assistance member today to continue reading this article. As a member, you’ll have access to hundreds of articles and receive our monthly proactive newsletter!

Join today!

  1. Prescription – While a prescription to bill an OTC COVID-19 Test Kit is not required per the PREP Act, one of the following should be provided as a “placeholder prescription”:
    • A backtag (which preferably has patent demographics, manufacturer of test, quantity, SIG, date, and dispensing pharmacist) with documentation “per PREP Act”
    • A copy of a protocol with a backtag attached
    • A copy of our patient request and attestation (pharmacy claim info on bottom of form may serve as a “placeholder prescription” with a backtag attached)
  2. Proof of Patient/Caregiver Request
    • Medicare and Commercially Insured Patient Request Attestation for OTC COVID-19 Test Billing is available on the PAAS Member Portal. Medicare states, “pharmacies must keep good documentation of the patient’s request for the tests and failure to provide such documentation could result in claim reversal and additional administrative actions”. PAAS recommends obtaining this request for all PBMs.
    • By signing the attestation, the patient is attesting
      • The tests are for personal use for indicated patient(s) on the form,
      • The tests are not for employer or travel purposes
      • The tests are not for children < 2 years old
      • The patient will not resell the tests provided under their benefit
      • The cost of the tests is not being covered by any other source
      • The patient has not requested OTC COVID-19 tests from any other provider in the current calendar month
  1. Proof of Dispensing
    • Provide a valid signature/delivery log showing the patient received the tests

PAAS Tips:

  • Only tests that have been authorized by the FDA should be billed and dispensed. You can find a list of authorized tests here
  • See the CMS website for further guidance on billing Medicare for OTC COVID-19 tests
  • Be sure you are ordering OTC COVID-19 tests from a reputable wholesaler, see our January 2022 Newsline article, Self-Audit Series #12:Invoice Audits
  • The claim submitted to the PBM must match the NDC/UPC of the product dispensed
  • Package size must be divisible by the quantity being dispensed

MounjaroTM Off-Label Use for Weight Loss Spells T-R-O-U-B-L-E

PAAS National® analysts have received many phone calls regarding prescriptions for MounjaroTM – in most cases the medication is suspected of being used “off-label” for weight loss. While off-label use by prescribers is commonplace, what’s different for MounjaroTM is the frequency and expense; making it an attractive audit target. This poses significant risk of payment recovery, regardless of the payor.

Become an audit assistance member today to continue reading this article. As a member, you’ll have access to hundreds of articles and receive our monthly proactive newsletter!

Join today!

We strongly advise pharmacies to confirm (and document) whether patients have a diagnosis of type 2 diabetes as that is the only FDA-approved indication as of October 2022 (although Lilly has received a fast track designation from the FDA in review for obesity).

  • If you have a diabetes diagnosis, or antidiabetic medications on the patient’s profile, you have less to worry about and should not need to do any extra leg work.
  • If the patient profile is void of any diabetes medications, a due diligence phone call to the prescriber’s office to confirm diagnosis is the safest approach.
    • Keep in mind pre-diabetes is not an approved diagnosis code for MounjaroTM.

The risk of audit recoupment varies by payor type as described below.

Medicaid and Medicare Part D

Medicaid and Medicare only pay for products when used for medically accepted indications. Claims for off-label use are not covered as per coverage limitations outlined in the Social Security Act. See the March 2022 article Off-Label Use Not Covered under Medicare Part D for additional discussion.

Commercial

Commercial payors have more flexibility to cover off-label uses, if they choose, as coverage criteria is not limited by federal law. However, many private insurers do not cover “lifestyle drugs” for sexual dysfunction, wrinkles or weight loss. Pharmacies should not assume that a claim paid at adjudication (without any type of utilization management tools such as prior authorization or diagnosis code restriction) will remain paid.

Payors assume prescriptions are for the medically accepted indication and respond with paid claims, often without special coverage hurdles to jump through. This results in a pay and chase audit method and PBMs could come back in an audit 1-2 years later stating that the pharmacy “should have known” the drug wasn’t truly covered. Would you be surprised if the PBMs were setting a trap for you?

Let’s look at what OptumRx®, Express Scripts®, Caremark® and have to say about off-label use:

  • OptumRx® defines a “Clean Claim as follows:
    • Prescription claims with active ingredients [active ingredients not defined] which are not being used for a documentable medically accepted indication or for which the Prescriber is unable to provide adequate documentation for the basis of use may not be considered a Clean Claim. For example, a claim that utilizes atypical directions for drug products which conflict with typical drug information available in pharmacy systems for patient education without medical necessity and of limited clinical value.
  • Express Scripts – Section 10 of the Provider Manual discusses Plan Sponsor Specific Requirements, and 10.5 address Prime Therapeutics. Under General Claims Submission Policies, Prime addresses “Appropriate Dispensing Practices” and puts the onus on Providers to determine if “claims are submitted for a valid use of a medication”. Auditors may request documentation to support appropriate dispensing of medications.
  • Caremark – does not directly address off-label use within the Provider Manual but states the Provider must comply with the Terms and Conditions of any Pharmaceutical Manufacturer Coupon Program being used.

Pharmaceutical Manufacturer Coupons

Pharmacies (and patients) must also be aware of manufacturer savings card “Terms and Conditions” that also limit coverage.

  • First, to obtain a savings card from the manufacturer website, patients must confirm their eligibility by checking a box stating, ‘I confirm that I have a Mounjaro prescription for Type 2 Diabetes.’
  • Second, the printed savings card has Terms and Conditions that spell out that patients must have a prescription “consistent with FDA-approved product labeling”.
  • Third, the savings card is only for patients with commercial insurance, and we have heard some pharmacies trying to use an in-house discount program as “primary” so they can then bill a “secondary” claim to the savings card. While the claims processor for the savings card cannot readily identify the primary payer, this workaround to gain coverage for the uninsured patient could result in an accusation that the pharmacy committed fraud – something PAAS has seen with other coupon card Sponsors.

As MounjaroTM has recently entered the market, we have not seen any PBM or manufacturer recoupments due to off-label use; however, if pharmacies overlook the fine print in PBM Provider Manuals and manufacturer Terms and Conditions, it could spell T-R-O-U-B-L-E.

PAAS Tips:

How Can I Avoid Humana Audits for Deceased Patients?

Humana has recently sent out audits to pharmacies with a subject line stating Review of claim(s) billed after member’s deceased date. This review is taking place, sometimes more than a year after the date of service, because some Medicare Part D claims were paid after a beneficiary passed away. Why would Humana wait so long to review these claims, and why did they not stop them at point of sale? Unfortunately, there is usually significant lag time from when a patient passes away to when this information is reported to the Social Security Administration, and then to CMS and Plan Sponsors.

Become an audit assistance member today to continue reading this article. As a member, you’ll have access to hundreds of articles and receive our monthly proactive newsletter!

Join today!
To combat these recoupments, pharmacies are allowed to submit documentation to demonstrate the claim was billed appropriately. If the date of service is within 14 days from the deceased date for retail claims, or within 32 days from the deceased date for long-term care claims, a pharmacy can send signed proof of delivery or a signature log showing someone received the medication on the patient’s behalf. If the deceased date is incorrect on Humana’s records, an obituary showing the correct date of death can be sent.

There are some things you can do to help avoid these situations to begin with.

PAAS Tips:

Caremark Cease and Desist Letters – Trudhesa®

PAAS National® analysts have recently assisted a few pharmacies that received “Cease and Desist” Letters from Caremark related to dispensing Trudhesa® nasal spray for migraines. The strongly worded letters alleged that pharmacies were in violation of the Provider Agreement and various sections of the Provider Manual.

Become an audit assistance member today to continue reading this article. As a member, you’ll have access to hundreds of articles and receive our monthly proactive newsletter!

Join today!

Caremark alleged that pharmacies had allowed a “pharmaceutical hub” to use the pharmacy’s identity or billing information to submit claims and outsourced the collection of patient copays. Additionally, Caremark demanded that pharmacies immediately cease these violating actions and reverse all offending prescription claims.

Purportedly, all prescriptions for Trudhesa® were received as transfers from a hub pharmacy such as Phil, Carepoint Pharmacy, or ASPN pharmacies which appear to be “digital pharmacies” and the only way that Trudhesa® is available per the manufacturer website.

Pharmacies that are not responsive to Caremark’s demands may face network termination.

PAAS Tips:

  • Be very cautious when receiving transfer prescriptions from hub pharmacies
  • Review Caremark Provider Manual section 4.12 to learn about acceptable practices related to pharmaceutical hubs

LIVE WEBINAR NOVEMBER 9th – Sign Up Today!

Join President of PAAS National®, Trenton Thiede, PharmD, MBA for a LIVE webinar “Don’t give PBMs a reason to audit (or terminate): Off-label drug use and compliance requirements” on November 9, 2022 from 2:00-3:00 pm CT as he answers:

  • What are the audit risks for dispensing prescriptions off-label?
  • Can Ozempic® and MounjaroTM be used off-label for weight loss?
  • What do PBMs require for Fraud, Waste & Abuse Compliance?
  • Does my pharmacy need to complete cultural competency training?

We will allow for some Q&A at the end of the webinar. If you would like to submit questions prior to the webinar, please click here.

SIGN UP TODAY!

PAAS Audit Assistance members will have access to a recording on the PAAS Member Portal if they are unable to attend the live event.

Does My Pharmacy Really Need Cultural Competency Training?

As a reminder, pharmacies are now required, as part of their NCPDP profile, to address if the pharmacy maintains evidence of cultural competency training. With the current staffing environment, all pharmacies want to know: do I really need to complete cultural competency training? Beyond NCPDP credentialing, here’s some additional consideration:

  • There are numerous federal laws and regulations related to discrimination and cultural competence – pharmacies must take reasonable steps to provide equal access to care across all patient populations.
    • Pharmacy staff cannot be expected to provide equivalent services if they don’t know the legal requirements or your pharmacy’s expectations. This alone makes staff training an absolute must.
  • Prior to NCPDP requesting Cultural Competency training status, PBMs were requiring pharmacies to attest directly. Now they’re pulling data from NCPDP without having you attest – make sure your NCPDP profile is up to date!
    • Humana still requires a direct attestation and additional training in states where they administer Medicaid Managed Care.

PAAS National® understands community pharmacies are short on time and resources. We’ve condensed more than 3 hours’ worth of training down to under an hour. The training is practical, and pragmatic – written by community pharmacists for the independent practice setting. PAAS’ Cultural Competency Training helps provide pharmacies a means to meet federal requirements, plus a certificate of completion, easily retrievable via the PAAS Member Portal.

As nondiscrimination in healthcare programs become increasingly important (and litigious), pharmacies need to position themselves to be culturally competent healthcare providers. This is further evidenced by the Department of Health & Human Services Office for Civil Rights (OCR) looking to revise the implementation guidelines of Section 1557 in addition to sanctions for pharmacies not capable to serve patients based on individual needs.

PAAS Tips: