Last month, PAAS National® wrote about the record-setting $6.8 billion in False Claims Act recoveries in fiscal year 2025. With a continued and expanding focus on fraud enforcement, and strong recoveries in the health care and life sciences, expect an increase in cases the Department of Justice is investigating. In a recent case, two individuals from Queens, NY, were charged with defrauding Medicare and Medicaid by paying illegal kickbacks and bribes, and submitting claims for services that were never provided.
From 2016 to 2026, the two defendants used a pharmacy and two social adult day care centers, meant to help senior citizens, to fraudulently bill Medicare and Medicaid $120 million. The fraud started by luring Medicare patients with illegal cash payments and supermarket gift cards to induce them to fill prescriptions at the defendants’ pharmacy. The same type of illegal cash kickbacks were paid to Medicaid patients to enroll in the social adult day cares owned by the same men. The claims submitted to Medicaid for the day care services often exceeded the permitted capacity of the facilities.
Some of the healthcare fraud cases PAAS summarizes in our Newsline articles are brazen, extreme cases, but they can also serve as a good reminder to review how you are conducting business. For example, most pharmacies are not giving cash and gift cards to patients for filling prescriptions at their pharmacy, but routinely waiving copays can be another form of an illegal inducement under Anti-Kickback Statutes (and Civil Monetary Penalties Law) and implicate FCA violations.
PAAS Tips:
- Review past Newsline articles for more information on the increase in healthcare fraud enforcement:
- PAAS FWA/HIPAA Compliance Program meets CMS’ definition (and PBM requirements) of an effective compliance program. Contact PAAS at info@paasnational.com or (608) 873-1342 to get started today!
Advance Beneficiary Notice of Noncoverage – What You Need to Know
The Advance Beneficiary Notice of Noncoverage (ABN) is a written notice that DME suppliers may give to a Medicare beneficiary before providing an item or service when the supplier has reason to believe that Medicare will deny paying for the item (or service). The ABN allows the beneficiary to make an informed decision as to whether they want to receive the item for which he or she may risk having to pay for out of pocket. Proper use of the ABN helps the beneficiary understand their potential financial liability and allows the supplier to bill the patient when Medicare denies the claim (recognizing that this is often not a practical/pragmatic strategy for independent pharmacies).
On March 13, 2026, the Centers for Medicare & Medicaid Services (CMS) announced that the Office of Management and Budget (OMB) approved the updated ABN (and new expiration date) for CMS-R-131 Form. The updated ABN template is effective immediately and valid through March 31, 2029 (the prior ABN expired January 31, 2026). DME suppliers should replace the expired version no later than May 12, 2026, review their internal processes regarding the ABN, and educate staff to be compliant with this Medicare requirement.
PAAS Tips:
Did you know there is much more to your audit assistance membership than just help with audits? The PAAS Member Portal contains a wealth of information and resources to assist you with audits and member service questions. Below is a list of 6 pages found on the Audit Assistance section of the PAAS Member Portal to assist you and your pharmacy staff to be proactive when it comes to audits.
PAAS Tips:
Two NDCs, One Fill: Best Practices for Pharmacies
Pharmacies frequently find themselves piecing together a prescription using leftover inventory from an old NDC and a new [equivalent] NDC to finish the fill—often due to wholesaler preferred status changes, drug availability, discontinued products, or changing purchasing preferences. Using two NDCs on a single prescription introduces significant dispensing and billing risks, and if not handled correctly, can result in audit findings, recoupments and costly consequences.
Did you know there is much more to your audit assistance membership than just help with audits? The PAAS Member Portal contains a wealth of information and resources to assist you with audits and member service questions. Below is a list of 6 pages found on the Audit Assistance section of the PAAS Member Portal to assist you and your pharmacy staff to be proactive when it comes to audits.
PAAS Tips:
Ozempic Prescriptions Continue to Wreak Havoc on Audit Results
Pharmacies know Ozempic® prescriptions have been on PBM radars since they were first released. Not only are these high dollar claims, but they are an easy target for incorrect billing. Making a simple days’ supply error on an Ozempic® claim can result in thousands of dollars being recouped.
Did you know there is much more to your audit assistance membership than just help with audits? The PAAS Member Portal contains a wealth of information and resources to assist you with audits and member service questions. Below is a list of 6 pages found on the Audit Assistance section of the PAAS Member Portal to assist you and your pharmacy staff to be proactive when it comes to audits.
PAAS Tips:
PBM Audit Risk When Purchasing Inventory from a Closing Pharmacy
When a pharmacy purchases remaining prescription drug inventory from a closing pharmacy, what may seem like a straightforward transaction can introduce complex documentation gaps and challenges—ultimately increasing exposures to downstream PBM audit risk. While such transfers are often permissible under state law and the Drug Supply Chain Security Act (DSCSA), PBM auditors frequently scrutinize non-wholesaler purchases when reviewing invoices.
Did you know there is much more to your audit assistance membership than just help with audits? The PAAS Member Portal contains a wealth of information and resources to assist you with audits and member service questions. Below is a list of 6 pages found on the Audit Assistance section of the PAAS Member Portal to assist you and your pharmacy staff to be proactive when it comes to audits.
PAAS Tips:
Having an NDC Does Not Mean FDA Approved
The first step in getting a new manufacturer/product on the market starts with a manufacturer, repackager, or distributor registering with the FDA to obtain a labeler code (the first set of numbers in the NDC). Once the labeler code is obtained, the company then assigns the product code (middle set of numbers in the NDC) and the package code (the last set of numbers in the NDC). The company then submits the final NDC to the FDA to have their product added to the FDA’s NDC SPL Data Elements File (NSDE). In other words, the FDA does not assign the NDC number.
A misconception some pharmacies have is a product with an NDC means that…
Did you know there is much more to your audit assistance membership than just help with audits? The PAAS Member Portal contains a wealth of information and resources to assist you with audits and member service questions. Below is a list of 6 pages found on the Audit Assistance section of the PAAS Member Portal to assist you and your pharmacy staff to be proactive when it comes to audits.
PAAS Tips:
How to Stay Prepared for an Invoice Audit
PAAS National® has seen invoice audits double in the last five years, a trend that has sparked widespread discussion from community pharmacy owners. Invoice audits are frequently categorized as “investigational” and used to identify pharmacies not purchasing from appropriate sources and/or potentially false (or phantom) claims. Auditors will act like an accountant by reviewing the claims submitted by a pharmacy over a certain timeframe and compare that to the purchases made during the same (or similar) timeframe, confirming that the pharmacy bought enough inventory to cover the claims that were submitted.
Invoice audits typically lead to the largest discrepancies…
Did you know there is much more to your audit assistance membership than just help with audits? The PAAS Member Portal contains a wealth of information and resources to assist you with audits and member service questions. Below is a list of 6 pages found on the Audit Assistance section of the PAAS Member Portal to assist you and your pharmacy staff to be proactive when it comes to audits.
PAAS Tips:
CGM Claims Under the Microscope
Audits from CMS through the Supplemental Medical Review Contractor (SMRC) are rolling in at high volume for continuous glucose monitors (CGMs), HCPCS E2103. The goal of SMRC is to help lower improper payment rates by conducting nationwide medical reviews of Medicaid, Medicare Part A/B, and DMEPOS claim to determine whether claims follow coverage, coding, payment, and billing requirements. Noridian is the current SMRC, therefore, the audit notices are co-branded with CMS and Noridian logos. The CGM claims currently under review are for the readers billed between November 12, 2023 and September 22, 2025. The pharmacy has until the printed deadline to reply to the audit request, which is typically 45 days from the date of the audit letter.
Audit requests for DMEPOS claims are often lengthy and overly wordy, leaving pharmacies to wonder “What do I need to send?!”
Did you know there is much more to your audit assistance membership than just help with audits? The PAAS Member Portal contains a wealth of information and resources to assist you with audits and member service questions. Below is a list of 6 pages found on the Audit Assistance section of the PAAS Member Portal to assist you and your pharmacy staff to be proactive when it comes to audits.
PAAS Tips:
Will Your DAW 1 Documentation PAAS an Audit?
PAAS National® audit analysts have the privilege of assisting pharmacies in all 50 states, DC, Puerto Rico and the Virgin Islands. With the DOJ expanding Health Care Fraud units, pharmacies should expect increased monitoring on Medicare and Medicaid programs targeting FWA, state law violations and program compliance.
If you haven’t…
Did you know there is much more to your audit assistance membership than just help with audits? The PAAS Member Portal contains a wealth of information and resources to assist you with audits and member service questions. Below is a list of 6 pages found on the Audit Assistance section of the PAAS Member Portal to assist you and your pharmacy staff to be proactive when it comes to audits.
PAAS Tips:
Ensuring Audit Success: Proof of Delivery for Mailed Prescriptions
PBM contracts require pharmacies to obtain evidence that demonstrates prescriptions were received by patients, ensuring claims are not falsely submitted for reimbursement. In community pharmacies, a patient typically signs a log when picking up their medication at the pharmacy (or upon delivery).
What happens if the prescription is mailed to the patient?
Did you know there is much more to your audit assistance membership than just help with audits? The PAAS Member Portal contains a wealth of information and resources to assist you with audits and member service questions. Below is a list of 6 pages found on the Audit Assistance section of the PAAS Member Portal to assist you and your pharmacy staff to be proactive when it comes to audits.
PAAS Tips:
Two Men Accused of $120M Medicare and Medicaid Fraud Using Vulnerable Adults
Last month, PAAS National® wrote about the record-setting $6.8 billion in False Claims Act recoveries in fiscal year 2025. With a continued and expanding focus on fraud enforcement, and strong recoveries in the health care and life sciences, expect an increase in cases the Department of Justice is investigating. In a recent case, two individuals from Queens, NY, were charged with defrauding Medicare and Medicaid by paying illegal kickbacks and bribes, and submitting claims for services that were never provided.
From 2016 to 2026, the two defendants used a pharmacy and two social adult day care centers, meant to help senior citizens, to fraudulently bill Medicare and Medicaid $120 million. The fraud started by luring Medicare patients with illegal cash payments and supermarket gift cards to induce them to fill prescriptions at the defendants’ pharmacy. The same type of illegal cash kickbacks were paid to Medicaid patients to enroll in the social adult day cares owned by the same men. The claims submitted to Medicaid for the day care services often exceeded the permitted capacity of the facilities.
Some of the healthcare fraud cases PAAS summarizes in our Newsline articles are brazen, extreme cases, but they can also serve as a good reminder to review how you are conducting business. For example, most pharmacies are not giving cash and gift cards to patients for filling prescriptions at their pharmacy, but routinely waiving copays can be another form of an illegal inducement under Anti-Kickback Statutes (and Civil Monetary Penalties Law) and implicate FCA violations.
PAAS Tips: