Step 1 Identify and investigate each possible unique problem to find the root cause(s)
- All possible errors should be considered until you can rule them out by process of elimination
- Obtain an external point of view (e.g., PAAS) to eliminate confirmation bias
Step 2 Develop and implement a corrective action plan for each unique root cause identified in step 1
- May include new/revised policy and procedure, new technology implementation or re-training on existing procedures
- System solutions that remove the potential for human error, and prevent mistakes from recurring, are ideal
- Designate a staff member to be the lead and develop a timeline for implementation
- There may be one or more solutions for a given root cause – identify what works for your pharmacy based on available resources
Step 3 Train staff and implement corrective action plan
- May include a staff memo, email, or meeting
- May need formal training if new technology is implemented
- All training should be documented and include when it occurred, who was involved and what was covered
Step 4 Perform internal scheduled audits to ensure that corrective actions are working
- Document these audits both for your records and to prove to a PBM (if required) that you are following through on any promises made
In many audit situations, pharmacies go through these steps on a small scale without realizing it; however, when an audit is significant, it is worth your time to go through a formal/documented process.
The most common audit scenario that demands a CAP is an invoice shortage as PBMs often presume/assert fraud unless the pharmacy can prove otherwise. While each audit may uncover unique issues, here is a summarized CAP example.
Example audit situation: PBM invoice audit results show pharmacy has purchase shortages on 10 drugs over a 12-month period that total $150,000.
Summary example of 4-step Corrective Action Plan:
Step 1 – Pharmacy identifies the following issues
- Root Cause #1 Purchased diabetic test strips from vendor that is not an authorized distributor
- Root Cause #2 Wrong NDC billed
- Root Cause #3 Purchases from another pharmacy without documentation
- Root Cause #4 Missing wholesaler invoices
- Root Cause #5 Bulk quantity on-hand prior to audit date range
Here is an example of Steps 2-4 for Root Cause #1 only, there would be similar details for all unique problems identified in each audit.
Root Cause #1: Purchased diabetic test strips from vendor that is not an authorized distributor
| Step 2 |
Corrective Action |
Revise inventory purchase policy to verify that diabetic test strips are only purchased from supplier on manufacturer’s authorized distributor lists as explained in July 2021 and February 2022 PAAS Newsline articles. |
| Lead Staff Member |
Pharmacist-in-Charge |
| Timeline |
Immediate |
| Step 3 |
Training/Implementation |
Email sent to all staff on 12/20/2022 with copy of revised inventory purchase policy |
| Step 4 |
Follow-up |
Spot check purchase history for test strips in 30, 60, and 90 days.
- If no problems, then stop monthly review
- If continued problems with inventory source, revisit policy and provide additional training with purchasing staff and continue monthly review x 3
|
PAAS understands that developing a written CAP can feel daunting and may not always be necessary; however, should you need to implement a CAP, consider the steps discussed in this article and contact PAAS for support should the need arise.
PAAS Tips:
- Internal CAPs may prove useful to reduce the likelihood of continued errors, lower future audit liabilities and potential stave off termination
- A quality CAP that is well thought out, and documented, can benefit the pharmacy and address issues more effectively
- CAPs that are poorly written, incoherent, or don’t effectively address the issues and resolution are often a waste of time and can do more harm than good
- Do not just “check the boxes” if asked to produce a CAP
- The Arkansas Office of the Medicaid Inspector General has a good discussion of Corrective Action Plans here
2023 Fraud, Waste & Abuse and HIPAA Compliance Program Updates
PAAS National® continuously monitors legislative and regulatory changes that may impact your Fraud, Waste & Abuse and HIPAA Compliance Program. We keep a close eye on enforcement from the Department of Justice, Office of Inspector General, State Attorney Generals, and Office for Civil Rights to help ensure the program meets interpretative standards. Furthermore, PAAS works to keep pace with Pharmacy Benefit Managers as they continue to add credentialing requirements that can be extremely difficult, and a significant nuisance, to independent pharmacies.
The PAAS National® FWA/HIPAA Compliance Program has implemented changes to ensure pharmacies continue to have a robust program in place. PAAS FWA/HIPAA compliance members can login to the member portal to view the 2023 FWAC and HIPAA Updates.
Administrators should review all Compliance tasks (located in the left-hand navigation on the PAAS Member Portal) at least annually to keep the program up-to-date and in compliance. Section 2.6 Updates of Policies and Procedures of your manual contains information on maintaining open lines of communication and the distribution of changes.
If you’re not a member of PAAS’ FWA/HIPAA compliance program, contact us today at (608) 873-1342 or info@paasnational.com to add the program for a discounted rate.
“We have been with PAAS for many years and added the FWAC/HIPAA material to our membership and as a compliance officer, I’ve never been more pleased with the program. If you have already made the best choice to have PAAS in your corner, then continue with the best for your FWAC/HIPAA needs.” – Member since 2010 from North Carolina
“PAAS National® Fraud, Waste, Abuse and Compliance educational sessions are unsurpassed. The PAAS National® Policy and Procedure manual that you create for your pharmacy is a must for all pharmacies to have for their staff. All of this keeps your pharmacy up to date with current pharmacy procedures and operations and ensure proper pharmacy practices going forward.” – Member since 2021 from New York
“A pharmacy without the compliance program does not have their bases covered and required work finished. I can sleep at night knowing this program keeps me protected and on task.” – Member since 2009 from Iowa
Natesto® Nasal Gel Pump – Bill It Right!
Pharmacies have begun to see more prescriptions for Natesto® (testosterone) nasal gel. Natesto® is indicated for primary hypogonadism and hypogonadotropic hypogonadism, whether those conditions were congenital or acquired. At this time, it is not approved for age-related hypogonadism or for male patient populations less than 18 years old.
Package Size
in Package
The recommended dose is 11 mg of testosterone (5.5 mg testosterone per nostril actuation) three times daily, preferably at the same time daily. Therefore, each package should be billed as a 10 days’ supply and a quantity of three packages would be dispensed for a 30 days’ supply, if prescribed as such. Despite needing to prime prior to initial use, no priming is necessary for the remainder of use and priming does not need to be factored in when computing the billed days’ supply.
PAAS Tips:
The Ballad of Snowbirds and Audits
The winter months have many pharmacies mailing prescriptions to their snowbird patients who leave their northern nests for more hospitable climates. Pharmacies want to keep these patients happy and coming back when the weather is nicer and may look to mailing maintenance medications to them when they have migrated out of state. Although these pharmacies may think they are doing the right thing for patient care, and their business, they may also be setting themselves up for audit failure.
Unfortunately, this does not just apply to northern states with snowbird patients. Many states now have laws that require nonresident pharmacies to obtain a license to ship, mail, deliver, or dispense prescription medications into their states. Auditors take advantage of these laws to recoup money from well-meaning pharmacies who may not even know that mailing a prescription out of state is a problem! For pharmacies situated close to the state border, delivering into a neighboring state carries the same risks. PAAS National® has seen these claims cited as law violations with limited appeal options.
PAAS Tips:
Start of New Year = Opioid Plan Rejects
PAAS National® analysts receive numerous calls at the start of the new year looking for guidance on opioid plan rejects. With the new year, many patients may be on a new Medicare Part D plan. Opioid prescriptions processed previously with no issues, may now reject at point-of-sale on the new plan.
With the opioid crisis on the rise, CMS acted in 2018 to closely monitor opioid use and safety of patients. Medicare Part D plans were required to implement opioid policies and work together with patients, prescribers, and pharmacies with this monitoring. These policies included real-time safety alerts at the pharmacy’s point-of-sale.
Here are the four Medicare Part D opioid safety alerts:
In August of 2022, CMS through the Medical Learning Network (MLN) published A Prescriber’s Guide to Medicare Prescription Drug (Part D) Opioid Policies. This guide offers guidance to both prescribers and pharmacies for patients using opioid medications. Pharmacies should note, alerts that cannot be resolved at point-of-sale may require providing patients with a copy of the CMS-10147 Medicare Prescription Drug Coverage and Your Rights form. This form provides instructions for patient to work with their prescriber and their Medicare plan to expedite coverage for their medication.
Pharmacies have an obligation to
PAAS Tips:
Update: Medicare Part D Mandatory E-Prescribing Requirements for Controlled Substances – Final Rule
In our December 2021 Newsline article, PAAS National® alerted pharmacies to the delay in enforcement of Electronic Prescribing for Controlled Substances (EPCS) for Medicare Part D until January 1, 2023. CMS has finalized policies in the Calendar Year (CY) 2021 Physician Fee Schedule (PFS) and CY 2022 PFS Final Rule for requirements on EPCS shown in section 2003 of the SUPPORT Act. Notably, in the CY 2022 PFS final rule, CMS finalized four proposals related to EPCS:
1. Compliance Action (Enforcement) Extension
2. Electronic Prescribing Controlled Substance Percentage
3. Finalized Proposals to the Classes of Exceptions (as outlined by section 2003 of the SUPPORT Act)
Note: there were no exemptions approved for prescribers issuing prescriptions to nursing facility patients (despite the delayed enforcement) nor hospice patients.
4. Limit compliance actions to sending a notice of non-compliance
The CY 2023 PFS Final Rule expands about this notice of non-compliance by clarifying two components. That CY 2023 compliance with EPCS requirements will be based on CY 2023 PDE data, that will not be evaluated until late CY 2024. Consequently, the non-compliance notice enforcement action has been extended through CY 2024. With CY 2025, CMS is planning more burdensome penalties that would apply to non-compliant prescribers.
PAAS Tips:
FDA’s Guidance on Compounding Commercially Available Products in Short Supply
For various reasons, including ingredient shortages or manufacturer back orders, a pharmacist may be required to compound a commercially available product. This is currently the case for Amoxicillin Oral Powder for Suspension, as evident from the FDA’s Drug Shortage List. As a result of this shortage, the FDA released Compounding Certain Beta-Lactam Products in Shortage Under Section 503A of the Federal Food, Drug, and Cosmetic (FD&C) Act which was put into effect immediately due to the urgency of the situation, stipulating their guidance as nonbinding recommendations (not legally enforceable), except in cases where there are regulatory requirements that pharmacies must meet.
Products compounded by pharmacies are not FDA-approved and must follow Section 503A of the FD&C Act. Under Section 503A, leeway is given to pharmacies in that they do not need to meet specific requirements stated in the FD&C Act, namely new drug approval or current good manufacturing practice requirements. However, pharmacies are only allowed to compound a commercially available product if
Although the FDA memo references beta-lactams only, being mindful of this guidance is helpful with any commercially available compounded product that a pharmacy makes, including oseltamivir (Tamiflu) suspension. Tamiflu suspension is not currently listed on the FDA’s Drug Shortage List, but pharmacies nationwide have been struggling to get the product from their wholesalers. So, what are pharmacies to do in order to be best protected in case of an audit?
PAAS has received numerous prescription validation requests, specifically from Caremark, for compounded Tamiflu prescriptions, looking for proper compounding and billing practices. For good measure, consider attaching a screenshot of your wholesaler(s)’ website showing proof the commercially available product was not available on or around the date of compounding, or a copy of your purchase order reflecting a product was unavailable to be shipped. Ensure the date, NDC, drug name, and inventory outage is visible. The longer you can prove that an ongoing shortage of a product exists, the better your situation becomes in the event an audit questions the continuous need to compound. We do not believe this is necessary for products listed on the FDA’s Drug Shortage List, but documentation to that effect on the prescription would be prudent regardless.
In addition, consider the following PAAS National® Tips when in the situation where compounding a commercially available product is necessary.
PAAS Tips:
New Tool on PAAS Portal – DMEPOS Article Series 2022
PAAS National® wrote a DMEPOS article series in 2022, which includes 8 articles to be proactive in preventing audits. We recently combined these articles into one tool that PAAS Audit Assistance members can easily reference, read and review with their staff. The 2022 DMEPOS Article Series includes:
PAAS is continuously updating and creating new tools to help our members. Check out the Proactive Tips section of the members-only website to for a multitude of resources.
All employees can be granted access to the Member Portal to view these tools, along with the electronic Newsline. This also allows employees to send filling and billing questions to PAAS without having to call.
If you have questions about permissions and website access visit the ‘Member Portal User Guide’ located under ‘Help’ in the left-hand navigation (portal.paasnational.com/Paas/Help), or simply call PAAS at (608) 873-1342 for assistance.
PAAS Tips:
Prescriber Statement Requirements Needed for Prescription Discrepancies
Appealing audit discrepancies can be confusing and time consuming. PAAS National® analysts have over 50 years of dedicated audit assistance experience, and review nearly 10,000 audits a year. When PAAS is involved from the beginning of your audit, the average reduction is 89%! We are dedicated to helping our members survive predatory audits, compliance issues, or whatever new trick PBMs are springing on you. To ensure the best possible outcome, engage PAAS right away! Whether pre-audit and/or post-audit, PAAS will help members navigate the entire audit process and provide customized guidance to help keep your hard-earned money in your pocket! For an appeal, one of the most common tools is a Prescriber Statement. PBMs request validation or authorization from prescribers to support prescription discrepancies found by auditors. The requirements for these Prescriber Statements vary from PBM to PBM and missing any of these requirements can lead to denial of the appeal.
Humana has implemented a Prescriber Statement template that is provided with audit results. Unfortunately, template forms are frequently missing elements required by other PBMs and are often not accepted as they do not appear to be authenticated by the prescriber. Additionally, a template form may not address the specific discrepancy flagged which the prescriber must clarify to overturn the recoupment.
Having experience with the different PBMs, your PAAS analyst can assist you with the exact requirements needed and will review the Prescriber Statements to ensure they are complete.
The most common requirements for a Prescriber Statement are:
Follow these steps to get help with your audit and/or appeal.
2022 CVS Caremark Provider Manual Supplement for 2023
Caremark has released the 2022 CVS Caremark Provider Manual Supplement which is effective January 1, 2023. Pharmacies should have received a 23-page paper copy by mail and can also access it electronically on the CVS Caremark Pharmacy Portal at https://rxservices.cvscaremark.com/ (login required).
Unlike many PBMs that publish their Provider Manuals electronically on public websites, Caremark places theirs behind a password wall and chooses to mail 100-page plus paper manuals every even year (e.g., 2022) and shorter supplements during odd years (e.g., 2023).
The Provider Manual is an extension of the Provider Agreement (aka Contract) and pharmacies are “responsible for monitoring and complying” with these unilateral updates.
A few important 2023 CVS Caremark Provider Manual changes are as follows:
Section 2.06 Change in Ownership
Section 3.03.03 Coupons and Other Programs
Section 5.06 Prior Authorization
Section 8.05 Supply of Covered Items; Purchases Invoices (previously distributed May 2022)
Appendix C – Appeals Process Documentation Guidelines
PAAS Tips:
Essential Elements of Corrective Action Plans
PAAS National® analysts have recently seen an increased number of PBM audits with “significant” results, including a large number of unique issues, large dollar amounts (>$100,000) or both. Audits of this magnitude may trigger further consequences such as additional audits, payment suspension and/or threat of network termination. In these instances, pharmacies may need to perform a documented “deep dive” and uncover the root causes and implement corrective actions to convince the PBM that there is no Fraud, Waste or Abuse and that it is safe to retain the pharmacy as a network provider. This deep dive is often referred to as a Root Cause Analysis or Corrective Action Plan (CAP). These CAPs are intended to improve operations moving forward and generally do not resolve the audit discrepancies or reduce the recoupment amounts.
While there is no mandatory format for CAPs, there are a few essential elements that should be considered.
Step 1 Identify and investigate each possible unique problem to find the root cause(s)
Step 2 Develop and implement a corrective action plan for each unique root cause identified in step 1
Step 3 Train staff and implement corrective action plan
Step 4 Perform internal scheduled audits to ensure that corrective actions are working
In many audit situations, pharmacies go through these steps on a small scale without realizing it; however, when an audit is significant, it is worth your time to go through a formal/documented process.
The most common audit scenario that demands a CAP is an invoice shortage as PBMs often presume/assert fraud unless the pharmacy can prove otherwise. While each audit may uncover unique issues, here is a summarized CAP example.
Example audit situation: PBM invoice audit results show pharmacy has purchase shortages on 10 drugs over a 12-month period that total $150,000.
Summary example of 4-step Corrective Action Plan:
Step 1 – Pharmacy identifies the following issues
Here is an example of Steps 2-4 for Root Cause #1 only, there would be similar details for all unique problems identified in each audit.
Root Cause #1: Purchased diabetic test strips from vendor that is not an authorized distributor
PAAS understands that developing a written CAP can feel daunting and may not always be necessary; however, should you need to implement a CAP, consider the steps discussed in this article and contact PAAS for support should the need arise.
PAAS Tips: