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:
- Confirm and document diagnosis/indication for all MounjaroTM prescriptions
- Do not use a discount program to work around manufacturer savings card Terms and Conditions
- Consider reviewing previous Newsline articles for additional background information
“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:
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.Join today!
- DAW 1 (prescriber prefers brand),
- DAW 2 (patient prefers brand), or
- DAW 9 (plan prefers brand).
- 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:
- Be Proactive on DAW 8 Claims and Prevent Recoupments (January 2022)
- Self-Audit Series #4: DAW Codes (May 2021)
- Print out and post the updated Oral Inhaler Chart for pharmacy billing staff to reference
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:
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:
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:
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:
PAAS Tips:
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.
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).
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:
Pharmaceutical Manufacturer Coupons
Pharmacies (and patients) must also be aware of manufacturer savings card “Terms and Conditions” that also limit coverage.
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.
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.Join today!
- 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
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:
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:
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:
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:
Are You Utilizing DAW Codes Correctly? Updated Tool Available!
In the September Newsline article, NCPDP Updates DAW Code Definitions to Encompass Interchangeable Biosimilars, you can find updated guidance for the utilization of Dispense As Written (DAW) codes with biologic drug products based on the August 2022 version of NCPDP Telecommunications Version D and Above Questions, Answers and Editorial Updates, set to go into effect October 15, 2023. Though the definitions were revised to include biologic drug products, the guidance holds true for all legend drugs. Now is the time to refamiliarize yourself with the best-practices for using DAW codes and to review DAW code audit pitfalls most seen by PAAS National® analysts. Additionally, the DAW Codes Explained tool has undergone a major overhaul to now include helpful tables, expanded DAW code definitions, PAAS tips, billing examples, and additional resources all in one place.
DAW Code Best PracticesJoin today!
- Single-source drug products (a brand or reference product with no available equivalent in the marketplace) should always be billed with DAW 0.
- Prescriptions written for a brand or reference product (which has a generic, authorized generic, interchangeable biosimilar, or “unbranded biologic” available in the marketplace) with Dispense as Written or Brand Necessary indicated in a manner compliant with state regulation should be billed with DAW 1.
- According to NCPDP guidance, when the prescriber allows for generic substitution, but the brand or reference product is billed for a multi-source drug, DAW 0 would be inappropriate. Most payers have historically accepted DAW 0, but it may have affected reimbursement rates. Instead, the brand or reference product would be more accurately billed utilizing DAW 2 through 9:
- DAW 2 if the patient prefers the brand or reference product.
- DAW 3 if the pharmacist believes the brand or reference product should be dispensed (this is rarely used).
- DAW 4 if the generic or interchangeable biosimilar is not stocked in the pharmacy.
- DAW 5 if the pharmacist is utilizing the brand or reference product as the generic or interchangeable biosimilar entity (e.g., using a brand name such as Amoxil® as your generic amoxicillin).
- DAW 6 if indicated by plan adjudication logic.
- DAW 7 if state law or regulation prohibits substitution of a brand or reference product despite an equivalent being available in the marketplace.
- DAW 8 when the generic or interchangeable biosimilar is not available in the marketplace.
- DAW 9 when the plan prefers the brand or reference product.
- Be sure substitutions are made between appropriate drug products. If you are unsure if two products are equivalent, utilize the FDA Orange Book (non-biologic drug products) or FDA Purple Book (biologic drug products) to verify.
- Check your state regulations or with your state Board of Pharmacy if you are unsure of the proper DAW 1 documentation requirements. Auditors will utilize state regulations to recoup when possible and law violations are difficult to appeal.
- Watch for electronic prescriptions submitted with erroneous DAW 1 codes. Billing a single-source product with a DAW other than zero is a red flag. It is best to avoid this pitfall because it could be just what the PBM needs to open an audit at your location. For more details, refer to the August 2022 Newsline, Erroneous DAW-1 Electronic Prescriptions.
- Prescriptions billed with a DAW 2 require documentation that the patient requested brand name. These notes should include the date of the request to meet certain PBM requirements.
- Be sure to keep documentation when DAW 6 is required per the plan.
- When billing DAW 8, keep proof that the generic, “unbranded biologic”, or interchangeable biosimilar was unavailable in the marketplace. This could be an invoice or a screen print of your wholesaler’s website. Additional guidance is in the January 2022 Newsline article, Be Proactive on DAW 8 Claims and Prevent Recoupments.
- Review the newly updated DAW Codes Explained tool found on the PAAS Member Portal
- Regularly perform a self-audit of any DAW code other than zero to check for appropriate documentation as per the guidance in the May 2021 Newsline article, Self-Audit Series #4: DAW Codes
- DAW codes 3, 4, 7, and 8 should be monitored specifically to watch for below cost reimbursement
- Consider transitioning claims for multisource drug products from DAW 0 to DAW 9 when the plan prefers brand name
DAW Code Audit Pitfalls to Avoid
PAAS Tips:
If you are billing the brand name or reference drug product when equivalent products are available in the marketplace, think about why you are doing so, utilize the correct DAW code, and ensure appropriate documentation exists to support the code utilized.
DMEPOS Mini-Series #6 – Therapeutic Shoes for Diabetes
According to the CDC, there are more than 130 million adults with diabetes or pre-diabetes in the United States. Every 17 seconds someone is diagnosed. Noridian, Jurisdiction D, has been conducting Targeted Probe and Educate reviews of HCPCS code A5500, which is for therapeutic shoes. The quarterly results based on dollars from April through June 2022 show an improper payment rate of 52%! Every other claim for therapeutic shoes is denied due to lack of medical necessity and/or technical reasons. CGS also shows a pre-pay review Quarterly Status report for the same date range with an error rate of 62%! Please review the guidance below for the required documentation to bill and dispense therapeutic shoes, and what the top denial reasons are for recoupment.Join today!
- Diabetic Condition
- Qualifying Foot Conditions – see link to Documentation Checklist under PAAS Tips
- Statement of Certifying Physician
- Supplier Evaluation
- Supplier Assessment of Fit
- Standard Written Order (SWO) – See our April 2021 Newsline for details
- Statement of Certifying Physician – Must be signed and dated by the MD or DO managing the beneficiary’s diabetes. (Exceptions to MD/DO as the certifying physician are listed in the Local Coverage Determination (LCD))
- Medical Records
- Patient must have an in-person visit within 6 months prior to delivery that documents the management of diabetes and at least one of the qualifying foot conditions
- The certifying statement by itself does NOT meet this requirement for the documentation in the medical record
- Supplier Evaluation
- Examination of the beneficiary’s feet describing any abnormalities that need to be accommodated by the shoes/inserts
- Measurements of the feet
- Impressions, casts, or images of the feet for custom molded shoes and inserts
- Supplier Assessment of Fit
- Must occur at the time of in-person delivery
- Supplier must conduct an objective assessment of the fit of the shoes and inserts while the beneficiary is wearing them and document the results
- For Example: no slippage of heals when walking, ample toe room, feet are supported by heel counter, inserts make contact with patient’s feet and fit inside the shoe properly
- A beneficiary’s subjective statement regarding the fit does not meet this criterion as they may have neuropathy which prevents them from feeling if there is any rubbing or pinching
- Proof of Delivery – Must include the address of the pharmacy, detailed description of item, quantity delivered, signature of beneficiary or representative and delivery date – billed date and delivery date must be the same
- See the LCD, checklists and other helpful forms under your DME MAC
- Jurisdiction B and C, CGS: LCD, Checklist
- Jurisdiction A and D, Noridian: LCD, Checklist
- CGS also has an activity timeline table that is helpful
- May use forms provided on the Comfort website to help meet Medicare requirements
Coverage Criteria (1 through 5) must be met, or claim will be denied.
Documentation needed upon an audit:
PAAS Tips: