First Step in Getting Help with an Audit

Oh no! You just received an audit, now what? Your first step is to get the audit notice to PAAS National® – the sooner that we are part of your team, the more benefit we can bring. Our all-inclusive membership means there are no hidden fees or limits to the audit assistance you can receive.

Make PAAS part of your audit process, every time. Review the 4 Steps to Using your PAAS Audit Assistance on the PAAS Member Portal for audit assistance members under Proactive Tips.

One of the best ways to get started is to create a workflow process when audits are received. Too many dollars are lost to PBMs due to missed deadlines or incomplete documentation – don’t let this happen to you. By putting a few simple steps in place, you can avoid costly mistakes in the future.

PAAS Tips:

Are Your Delivery/Signature Logs PBM Compliant for 2023?

A common component of a pharmacy audit request is the delivery/signature log. Delivery/signature logs are used to prove the patient received their medication and that they received it within the PBM return to stock timeframe. PAAS Audit Assistance members can refer to the PBM Return to Stock Chart on the PAAS National® Member Portal for a list of the major PBMs and their return to stock time frame allowances.

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PAAS often sees delivery/signature logs flagged for having a pre-printed delivery date. Several PBMs do not accept these logs because they may not represent the actual delivery date. Here is an example:

Recent Elixir results state, per the Elixir pharmacy manual, “Receipt submitted states “Delivery.” Unless the prescription delivery is through a common courier, an electronic or manual signature should be recorded at time of delivery by the member or designated member representative. For deliveries, the date delivered cannot be pre-printed by the pharmacy.”

Some software systems allow a pharmacy to “scan out” a prescription and flag it for delivery. The driver can take this date/time stamped point of sale receipt (that notates delivery) to the patient’s address and have them sign. PAAS also sees many LTC facility delivery manifests containing a pre-printed date on the document. An auditor is not going to accept/assume the delivery took place the same day as the pre-printed date and will likely flag these logs as invalid. The pharmacy needs to provide documentation of when the delivery took place by having the patient, or representative, date their signature upon delivery. Consider adding a blank line for a handwritten date next to the signature line that can be completed upon delivery.

PAAS Tips:

  • PBM Return to Stock requirements apply to retail and LTC pharmacies
  • A complete delivery/signature log should contain:
    • Patient name
    • Prescription number
    • Date filled or fill number
    • Date delivered – cannot be pre-printed
    • Delivery address – pharmacy, patient, or facility
    • Signature of patient, or the signature of representative who accepted the delivery, or indication of COVID-19 if appropriate
  • If Mailing:
    • The COVID-19 pandemic had many PBMs make concessions to allow mailing during the Public Health Emergency (PHE). Keep up to date on concession expirations by downloading our COVID-19 PBM/Payers Concessions Chart 
    • The current COVID-19 PHE will expire 5/11/2023. See our article in next month’s Newsline for further considerations/implications.
    • If you are mailing out of state, be sure to check that state’s Board of Pharmacy to see if there are licensing requirements
    • PBMs that allow mailing will require proof that the patient received the medication and what was in the package
      • A tracking number linked to the prescription record along with tracking detail from the carrier showing the medication was delivered is traditionally sufficient
    • Be familiar with automatic mailing requirements for Part D patients, review the September 2022 Newsline article,  Automatic Mailing for Part D Patients
    • Read the November 2022 Newsline article, Yes, LTC Delivery Manifests ARE Needed!
    • The PAAS Trifold Signature Log Mailer is available for use on the PAAS Member Portal
  • If Medicare B DMEPOS Proof of delivery:
    • For in store pick-ups, the delivery date (date received) must match the date of service
    • For items delivered via a shipping service or mail, the date of service can be either the shipping date or delivery date
    • Read the June 2021 Newsline article, DMEPOS Proof of Delivery and Refill Request Requirements
  • Pharmacies using manual signature logs may want to consider ordering the PAAS National® Signature Logbook
  • Consult with your software vendor on updating your delivery/signature logs to include a signature date

Process for Dealing with a Patient HIPAA Complaint

Anyone can file a complaint if they feel their rights under the HIPAA Privacy, Security, or Breach Rules have been violated. They can file a complaint with the covered entity or business associate involved, or with the U.S. Department of Health and Human Services (HHS) Office for Civil Rights (the OCR). The HHS.gov website has a full page dedicated to filing a complaint and is one of the first listings to appear if someone performs an internet search for “filing a HIPAA complaint”.

Appropriately handling the patient’s complaint by taking it seriously, investigating, and responding may help decrease the risk of the OCR launching an investigation into your pharmacy. Additionally, if an investigation does occur, following the steps listed below can help ensure that your pharmacy would have all the required information documented to prove you handled the situation pursuant to the HIPAA Rules.

Steps to follow if a patient believes their HIPAA rights have been violated:

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  1. Have the patient fill out a HIPAA Complaint Form
    • PAAS National® members with the Fraud, Waste, and Abuse (FWA) and HIPAA Compliance Program can use the HIPAA Patient Complaint form in Appendix B of their Policy & Procedure Manual (P&P Manual)
  2. The pharmacy’s HIPAA Privacy Officer should review the complaint form to determine if a violation or breach occurred
    • FWA/HIPAA Compliance members should review section 10.9 of their P&P Manual regarding complaints
  3. The Privacy Officer should document the relevant facts of their investigation as well as efforts to mitigate harm to the patient, sanctions that have been applied, or any policies or procedures that need to be revised or updated
    • Staff must be trained on all revised policies and procedures, and proof of training maintained
  4. If a breach occurred, notifications must be sent out to the patient via First class letter, the Secretary of HHS, and, possibly, the media
    • Section 10.14 of the FWA/HIPAA Compliance Program P&P Manual discusses breach notifications in further detail, including: required notifications, content, timeline, and other nuances of each notification; PAAS analysts are also available to discuss these notifications with FWA/HIPAA Members if further clarification or guidance is needed

If HIPAA Rule violations are found during an OCR investigation, the pharmacy can be forced to pay civil money penalties and can even be held accountable for an employee’s failure to adhere to company HIPAA policies and procedures. Additionally, individuals accessing or utilizing protected health information inappropriately can be charged civil money penalties or even face criminal charges (and jail time!) for violating the HIPAA Rules.

PAAS Tips:

  • The OCR takes HIPAA complaints seriously and can investigate your pharmacy to ensure you are compliant with all HIPAA Rules; be sure you have appropriately documented your response to all HIPAA complaints and maintain all documents related to HIPAA for a minimum of six years
  • Routine HIPAA Compliance Audits can also be carried out by the OCR without a prior patient complaint – make sure you have appropriate policies and procedures in place to be fully adherent to all HIPAA Rules
  • All staff with access to protected health information should be knowledgeable about HIPAA Rules, your pharmacy’s HIPAA policies and procedures, and sanctions for violating the Rules
  • HIPAA training tailored specifically to independent pharmacies, as well as personalized assistance from a member of the PAAS analyst team, is included as part of a PAAS FWA/HIPAA Compliance Program membership

Express Scripts Validating 340B Claim Eligibility

PAAS continues to see members receiving emails from Express Scripts (ESI) requesting pharmacies to “Please Review Your 340B Eligible Claims”.  ESI’s goal is to verify manufacturer rebate eligibility and states “your claims reimbursement, network participation, and network status are not affected by a claim’s status as 340B-eligible or whether you respond”.

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While seemingly haphazard in claim selection and frequency, Express Scripts is attempting to identify a subset of claim(s) that were initially processed as not 340B-eligible, but in actuality may have been dispensed/reimbursed as 340B. From communication with members, PAAS can see the algorithm ESI is using is far from perfect. Conjecture leads us to believe they are using the HRSA OPAIS website to look at providers and pharmacies, then targeting high dollar brand medications.

If the pharmacy agrees that the claims were 340B claims, no action is required and Express Scripts will reprocess the claim(s). If the pharmacy believes the claims were correctly adjudicated as non-340B eligible, the pharmacy should respond within 10 business days by emailing 340bclaims@express-scripts.com to refute Express Script’s conclusion.

PAAS Tips:

  • View PAAS’ webinar 340B Contract Pharmacy Considerations for 2021, which was based on ESI’s 340B Provider Manual changes
  • If your pharmacy is a 340B contracted pharmacy, follow up with your 340B administrator to ensure you have access to claims level detail
  • If the claim did not meet 340B criteria (e.g., ineligible provider, patient, or Medicaid eligibility) be sure to refute ESI’s findings with documentation

Update to PAAS’ Onsite Credentialing Guidelines

PAAS National® has created an Onsite Credentialing Guidelines, an extensive checklist to assist PAAS members with scheduled and/or unexpected visits from PBM auditors. Unannounced visits can catch pharmacy staff off guard when the Pharmacist-in-Charge (PIC) is not present. Be sure you are reviewing and advising your staff on the information included on this checklist so they are prepared.

There was an 11% increase in reported onsite audits over the past two years. PAAS takes pride in staying up to date on ever changing trends in pharmacy. Keeping our members informed on PBM inquiries during the credentialing process, or an onsite visit, is one of our priorities. We recently added the following updates to our Onsite Credentialing Guidelines:

  • Emergency Supply – Federal law requires Medicaid to provide at least a 72-hour supply of a covered drug to Medicaid patients in an emergency situation when prior authorization is pending as per 42 US Code 1396r-8(d)(5)(B). Pharmacists should use their professional judgement regarding whether there is an immediate need. See your state Medicaid agency for details on billing “emergency supply”.
  • Out of Stock Medication – Pharmacies must develop and follow procedures to ensure patients have timely access to prescribed medications. This may include ordering medication for next business day, transferring prescription to another pharmacy or contacting prescriber to obtain a prescription for an alternative therapy.
  • CMS 10147 – As of January 1, 2023, pharmacies must also include a Multi-Language Insert pursuant to CY 2023 Medicare Advantage and Part D Final Rule (CMS-4192-F) published May 9, 2022. There is no requirement for pharmacies to document the distribution of the notice. Auditors may confirm that pharmacies are distributing the current version of the CMS 10147 and multi-language insert to beneficiaries. PAAS Audit Assistance members can see this month’s Newsline article, Multi-Language Insert Must Be Provided to Medicare Beneficiaries as of January 1, 2023.

Interested in having a customized FWA/HIPAA Compliance program? Contact PAAS to get started today! info@paasnational.com or 608-873-1342.

Audit Risk: Pre-Printed Prescription Forms

At a time when the workday seems to be growing ever more hectic, prescribers and pharmacies may find pre-printed prescription forms convenient; especially for medications which are frequently utilized by a prescriber for treatment. Many PBMs prohibit pre-printed prescription form use for various reasons. Forms created by the pharmacy for the prescriber are concerning because it could appear the pharmacy is soliciting prescriptions or attempting to steer the patient to their pharmacy, particularly if the pharmacy’s name and branding (logo) are pre-printed on the form. Concerns that the forms are not specific enough for each individual patient need with the same quantity, refill number, and directions can also come up.

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PAAS National® has seen pre-printed prescription forms considered invalid when they have cascading or overly broad substitutions. For example, if a topical medication is not covered, the form states the prescriber allows the pharmacy to substitute the next topical medication on the form and so on until one is covered. These medications tend to be more expensive than an alternative the plan may prefer and are a red flag for audit when the pharmacy is seen transmitting claims, reversing them, and billing a different product in rapid succession. Many PBM provider manuals have now added language requiring pharmacies to have a verbal conversation with the prescriber before making any substitutions, which would need to be proven with a clinical note documented on the prescription.

PAAS Tips:

  • Check the provider manual of the PBMs that you are billing to see if they prohibit the use of pre-printed forms. Currently, Elixir, Prime Therapeutics, CVS/Caremark, and Express Scripts all contain language about pre-printed forms and/or inappropriate therapeutic substitutions.
  • Clinical notes should contain the date, name and title of who you spoke with, summary of what was discussed, and pharmacy employee initials.
  • Pre-printed prescription forms with high-cost medications and/or cascading substitution could be a red flag and require further scrutiny.
  • Prescriptions should be specific to an individual patient’s needs and not generalized.
  • Eliminate the use of pre-printed prescription forms
    • Placeholder prescriptions for pharmacy-initiated dispensings (e.g., vaccines, OTC COVID-19 tests) has not been a concern

Why Does Billing the Correct Origin Code Matter?

Pharmacies are required to enter an origin code on claims to indicate where the prescription came from or “originated.” By definition, an origin code cannot change and should remain billed as how the pharmacy originally received the prescription from the prescriber, even when clarifications of that prescription are done by telephone.

Why does billing the correct origin code matter?

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In general, origin code errors are educational with a few exceptions. Humana will charge a $5 penalty fee for an incorrect origin code being billed when discovered on audit. This will be for the original claim and each refill also billed incorrectly (e.g., original fill plus 11 refills = $60 recoupment). If a telephone order is sent in for audit when billed with a different origin code, some auditors will assume the pharmacy could not find the “original” prescription and simply wrote one up. Auditors will mark the claim discrepant until the pharmacy can produce the prescription with the correct origin code or obtain a prescriber statement. Additionally, with Medicare Part D now requiring electronic prescribing of controlled substances (EPCS), CMS will rely on the origin code (initiated by the pharmacy) in the Prescription Drug Event (PDE) data to determine if physicians are adhering to the requirements.

NCPDP defines origin code values as follows:

CODE DESCRIPTION
0 Not Known
1 Written – Prescription obtained via paper.
2 Telephone – Prescription obtained via oral instructions or interactive voice response using a phone.
3 Electronic – Prescription obtained via SCRIPT or HL7 Standard transactions, or electronically within closed systems.
4 Facsimile – Prescription obtained via transmission using a fax machine.
5 Pharmacy – This value is used to cover any situation where a new Rx number needs to be created from an existing valid prescription such as traditional transfers, intrachain transfers, file buys, software upgrades/migrations, and any reason necessary to “give it a new number.” This value is also the appropriate value for “Pharmacy dispensing” when applicable such as BTC (behind the counter), Plan B, established protocols, pharmacists authority to prescribe etc.

Here are questions PAAS National® has frequently answered:

Question 1: If a pharmacy calls a prescriber to clarify a written prescription, or a change is needed, does the origin code become a “2” for Telephone?

Answer: No, the NCPDP Telecommunication FAQ section 3.1.5.3 states, “Because the prescription was received via written form the Prescription Origin Code is 1 and will remain a 1 throughout the life of the prescription number.” The same would be true if received by any other origin.

Question 2: If a prescriber sends a prescription electronically, but the pharmacy is not electronically-prescribing enabled or if there is a transmission error, and the intermediary drops the prescription to a fax, what origin code is used?

Answer: Per NCPDP, “Because the prescription was received at the pharmacy via fax the Prescription Origin Code is 4 and will remain a 4 throughout the life of the prescription number.”

Question 3: What origin code is used for a standard written authorization or protocol for services and products like, vaccines or Narcan®?

Answer: The NCPDP definition for protocols is Prescription Origin Code of “5” since the prescription is created by the pharmacy in these cases.

PAAS Tips:

  • Always bill the correct origin code to avoid potential recoupment.
  • The origin code remains the same through the life of the prescription.
  • Too many incorrect origin code discrepancies can lead to more frequent audits.
  • See the NCPCP Telecommunication Version D and Above Questions, Answers and Editorial Updates document for more information and scenarios.

Medicare Caps Copay for Insulin at $35 per Month

As most of you (and your Medicare patients) have undoubtedly noticed, Medicare has applied a $35 per month cap on copays for insulin prescriptions ($105 for a 3-month supply) for years 2023-2025. For 2026 and beyond, copays will be capped at the lesser of $35 or 25% of the negotiated price.

Section 11406 of the Inflation Reduction Act of 2022 implemented this cap for Medicare Part D and Medicare Advantage patients effective January 1, 2023, while Section 11407 requires implementation for Medicare B covered insulin as of July 1, 2023.

Plan Sponsors have a 90-day grace period to implement these copay caps and any excess copays calculated at adjudication must be refunded by the plan.

PAAS Tips:

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  • The definition of “one month” varies by plans
  • Pharmacies should collect the full copay amount as per online adjudication and advise patients that the plan will refund patients for any amounts in excess of $35 per month
  • Pharmacies should be extra diligent when calculating days’ supply and make sure you have mathematical instructions that support the days’ supply adjudicated
  • See the Insulin Medication chart and Can You Bill It As 30 Days? tool on the PAAS Member Portal for additional guidance
  • The CMS has created the following resources for Medicare patients
    • 7 Things to Know about Medicare Insulin Costs
    • Frequently Asked Questions About Medicare Insulin Cost-Sharing Changes in the Prescription Drug Law

Multi-Language Insert Must Be Provided to Medicare Beneficiaries as of January 1, 2023

After reading this article you should understand what a multi-language insert is, why it must be provided, and when you are required to hand it out.

What is a multi-language insert (MLI)?

You have likely seen a MLI if you have received any written communication from your health plan. The document will offer free interpreter services along with a phone number to call to ask questions about your health or drug plan.

Specific details about what a MLI must contain can be found in 42 CFR § 423.2267(e)(33), “This is a standardized communications material which states, ‘We have free interpreter services to answer any questions you may have about our health or drug plan. To get an interpreter, just call us at [1-xxx-xxx-xxxx]. Someone who speaks [language] can help you. This is a free service.’ in the following languages: Spanish, Chinese, Tagalog, French, Vietnamese, German, Korean, Russian, Arabic, Italian, Portuguese, French Creole, Polish, Hindi, and Japanese.”

Why must a multi-language insert be provided?

Notification of this requirement was published on May 9, 2022 in the Federal Register, 87 FR 27704. According to the notice, 12.2 percent of persons aged 65 and older speak a language other than English in their home. The multi-language insert is meant to inform individuals that free interpreter services are available to them. This helps ensure that all patients are provided equal access to care across all patient populations. For more information about providing equal access, contact PAAS National® at (608) 873-1342 to learn more about our Cultural Competency and Linguistically Appropriate Services using the PAAS CARE Model.

When must a multi-language insert be handed out?

According to 87 FR 27704, the insert must be handed out “whenever a Medicare beneficiary is provided a CMS required material.” Lists of CMS-required materials can be found under 42 CFR§ 422.2267(e) and 42 CFR § 423.2267(e). Pharmacies would be directly impacted by 42 CFR § 423.2267(e)(21) – “Medicare Prescription Drug Coverage and Your Rights. This is a standardized communications material used to convey a beneficiary’s appeal rights when a drug cannot be filled at point-of-sale.” Since pharmacies are required to hand out the Medicare Prescription Drug Coverage and Your Rights form (CMS 10147), a CMS-required document, the MLI must be provided concurrently.

PAAS Tips:

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  • Auditors often confirm pharmacies are distributing the current version of CMS 10147 to Medicare beneficiaries, as required, and now they may look for the MLI as well (Elixir has explicitly stated that they will review this during onsite audits)
  • There is no requirement for pharmacies to document the distribution of the MLI
  • The phone number on each MLI is PBM-specific; if a MLI is not automatically generated by your software system with a populated phone number, we suggest utilizing the numbers below (TTY numbers are for people who have hearing loss or speech impairment which makes using a regular telephone difficult; conversations are typed instead of vocalized):
  • For additional details regarding MLI, refer to 42 CFR§ 422.2267(e) and 42 CFR § 423.2267(e)

Ozempic and Mounjaro Prescriptions – Between a Rock and a Hard Place

Many pharmacies continue to receive new prescriptions from patients eager to start on therapy for Ozempic® and MounjaroTM. Oftentimes, these patients are hopeful and excited to start on this long-term therapy to help manage their underlying indication and may quickly become upset and confrontational with your staff if they are told “we don’t have this in stock”, “this medication requires a prior authorization” or “I don’t think this is covered by your insurance unless you have type 2 diabetes”.

Glucagon-like peptide-1 (GLP-1) receptor agonists like Ozempic® and MounjaroTM  have recently gone viral on social media and are the hottest craze in Hollywood for a very desirable side effect – weight loss. As a result, many prescribers have prescribed them “off-label” for indications such as weight loss, pre-diabetes and metabolic syndrome, despite having been only FDA approved for type 2 diabetes. While off-label prescribing is common and perfectly acceptable in medical practice, pharmacies become stuck not knowing whether a patient’s insurance company pays for these medications in the absence of a type 2 diabetes diagnosis. Pharmacies report that many patients are presenting these prescriptions after having previously received prescriptions for Saxenda® or Wegovy® (that were not covered by insurance) or having been turned away by other pharmacies.

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Some Payors have implemented Utilization Management tools such as Prior Authorization or Diagnosis Restriction to confirm why the patient is using the medication before paying (or denying) the claims – in these situations the pharmacy should be much less concerned.

  • There is not a known list of “acceptable” diagnosis codes for PBMs or Plans
  • If the PBM has not designated the particular NDC as diagnosis restricted, then any diagnosis codes (ICD-10) submitted by the pharmacy are likely not reviewed, and pharmacies should not assume the PBM used the code as part of adjudication logic to determine payment of claim

When claims for GLP-1 medications pay at point-of-sale without any utilization management, PBMs may still expect pharmacies to “police” these medications and be able to accurately tell patients that the drug is covered or not covered (PAAS Audit Assistance members can see Mounjaro Off-Label Use for Weight Loss Spells T-R-O-U-B-L-E from November 2022). Inevitably, this puts pharmacy staff between a rock and a hard place when patients are using medications off-label.

  • For patients with type 2 diabetes (ICD-10 diagnosis code “E11”), pharmacies can bill insurance and follow corresponding claim adjudication logic without additional concerns.
  • However, for any other diagnosis the pharmacy should consider stating: “I don’t know if your insurance covers for indication X”.

Understandably, pharmacies have a difficult time determining if an individual patient’s insurance company will approve coverage for a GLP-1 medication for conditions other than type 2 diabetes. Researching plan benefits is often an exercise in futility, and PBM help desks are unlikely to have the clinical expertise.

The risk of a future PBM audit looms and it would be easy for a crooked PBM to pay the claim now, audit the pharmacy later and argue that “you (the pharmacy) should have known that we (the PBM) only cover this drug for type 2 diabetes”. Is this fair? Absolutely not, but when was the last time PBM audits were fair?

Consider these audit discrepancies from MedImpact:

  • The diagnosis code of the corresponding medical claim does not support the billing of this medication
  • There is no corresponding medical claim to support the billing of this medication

While these claims were not related to Ozempic® or MounjaroTM, they easily could have been. With vertical integration amongst PBMs and Health Insurers, it’s easy to see how data could flow amongst them to identify off-label drug utilization; and with an annual treatment cost of nearly $12K per year, payors are going to look to reduce its utilization.

Dispensing these medications, when you can even get them in stock, is very complicated based on the large sticker price, the risk of audit and the immediate backlash you may face from patients and local prescribers if you say “no” or even “let’s try to figure this out”.

PAAS wants to help you and your patients get access to prescribed therapies and we recognize that refusing to fill prescriptions is not good for business or customer satisfaction. While there is not a one-size-fits-all approach, here are some best practice suggestions to keep your pharmacy safe from audit and create the fewest waves with parties involved.

PAAS Tips:

  1. All prescriptions for GLP-1s should be verified for indication of use
    1. Check patient profile for previous use of type 2 diabetes medications as a proxy
    2. Check the prescription to see if it came with a diagnosis code
    3. Contact the prescriber to confirm indication and document a clinical note
  2. If patient has E11 type 2 diabetes mellitus, then you should have limited concerns
    1. Your pharmacy will need to determine which other diagnoses you are comfortable billing to insurance without questioning further
  3. If claim requires prior authorization or is diagnosis code restriction (regardless of patient diagnosis), follow standard processing procedures
  4. All other claims pose audit risk and the pharmacy should consider giving the patient options to proceed
    1. Explain to the patient that insurance may not cover without type 2 diabetes diagnosis
    2. If indication is for weight loss, pursue prescription for Saxenda® or Wegovy® first, as these two medications are FDA approved for weight loss
      1. Medicare Part D currently excludes coverage of weight loss agents as per CMS Prescription Drug Benefit Manual Chapter 6, section 20.1
      2. The “Treat and Reduce Obesity Act of 2021” (HR 1577) was introduced in 2021 to allow coverage of prescription drugs for treatment of obesity or weight loss, however this bill is not a law
    3. Explain that the pharmacy wants to help them get their medication, but due to the high cost (>$1,000 per month) it is important to confirm coverage, which can take time
      1. If the patient is willing to wait a few days to start therapy, pursue 4b above (if this hasn’t been explored) and encourage the patient to contact their insurance to confirm coverage for their condition. Note that the PBM help desk is unlikely to have clinical knowledge and patient (or pharmacy) would need to speak with clinical staff such as prior authorization department
  5. If you bill insurance and claims are subsequently audited, PBMs may try to recoup payment of claims if patients do not have type 2 diabetes
    1. Should this occur, PAAS is here to support you throughout the audit process with strategies and resources to fight the recoupments