Four Tips for Navigating Pharmacy Compliance Audits in 2022

by Tracie Acosta, CPh, Published March 11, 2022 by Pharmacy Times

In recent years, the auditing process has evolved into a full-blown investigation, often requiring pharmacies to submit hundreds of pages of documentation

Compliance audits launched by pharmacy benefit managers (PBMs) have long been a cause of frustration for pharmacies, especially independent community pharmacies with limited manpower and resources compared to large chains. This challenge has only magnified since the onset of the COVID-19 pandemic in early 2020.

PBMs have adapted their practices by switching to virtual audits, leaving them with the ability to review more claims than ever before. As a result, pharmacies that are juggling the chaos of audit documentation, vaccine distribution, prescription refills, and a plethora of other responsibilities stand to lose. It’s no wonder that the average audit in 2020 cost pharmacies $23,978, which is 35% more than the annual average over the previous 5 years, according to the pharmacy audit assistance service, PAAS National.

Traditionally, a PBM would simply check that the pharmacy received a valid prescription, dispensed the proper amount according to the prescription, and submitted a claim for the correct amount dispensed. But in recent years, the auditing process has evolved into a full-blown investigation, often requiring pharmacies to submit hundreds of pages of documentation—and auditors can even use minor clerical errors as excuses to deny payments.

As pharmacy compliance audits grow in sophistication, it’s up to pharmacies to remain diligent in monitoring their operations, especially the following aspects of their operations in 2022. Here are some tips for getting ahead of and managing audits in the year ahead.

Continue to read the full article here.

Top 3 PAAS eNewsline Exclusive Articles

Your monthly printed Newsline is only a fraction of the content. PAAS Audit Assistance members can log in to the PAAS Portal each month to view the full Newsline edition with audit prevention tips and timely information on PBM audit tactics.

PAAS Audit Assistance member can explore additional eNewsline articles on the PAAS Member Portal.

PAAS Audit Assistance Admins can also add employees to the Portal so that their whole staff has access to the eNewsline.

Keep your employees informed to increase engagement and lower audit results!

Top 10 PAAS National Articles of 2021

PAAS Audit Assistance members receive a monthly newsletter with new audit tactics and prevention tips. The printed newsletter, PAAS National® Newsline is only a fraction of the content that we put out each month as members have access to additional content online in the Member Portal, in addition to an archive of articles.

The top 10 Newsline articles for 2021 include:

  1. Audit Risk: Ivermectin Used for Treating COVID-19
  2. COVID-19 Vaccine Billing Guidance
  3. Updated Dispense in Original Container Chart
  4. Are You Documenting DUR and Submission Clarification Codes?
  5. Dispensed Quantity is Different from the Prescription – Do I Need Documentation?
  6. HHS Advisory Opinion on Contract Pharmacies Under the 340B Program
  7. COVID-19 Vaccine Administration Audit Risk (Including a New PAAS Resource)
  8. Fraud, Waste, & Abuse and HIPAA Compliance Updates for 2021
  9. “Forwarding” Unfilled Electronic Prescriptions
  10. Victoza® – One Letter Can Cost You!

PAAS Audit Assistance Admins can also keep their employees informed to increase engagement and lower audit results by adding employees to the Portal so that their whole staff has access to the eNewsline.

Caremark® Turns Up the Heat on Proof of Copay Collection Requests

PAAS National® is seeing a rising number of Caremark® audits requesting proof of copay collection. This requested information may be included in a desk, virtual onsite, or invoice audit. The number of claims requested can range from just a few claims to all dates of fill for several prescriptions.

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Having a Point-of-Sale (POS) system may be sufficient for providing proof of copay collection; however, PAAS analysts have seen Caremark® requiring additional documentation to show evidence of payment collection. Providing bank deposits (cash transactions), front and back copies of cancelled checks, and credit card receipts may be necessary.

In addition to proof of copay collection, Caremark® has been known to ask pharmacies to include their policies regarding copay collection and financial hardship, including what documentation is required to determine patient’s financial hardship (i.e., tax returns or approved waiver application). PAAS Fraud, Waste and Abuse and HIPAA Compliance members can reference Section 4.1.5 of their Policy and Procedure Manual for their copay collection policy.

While pharmacies may not be required to collect copays for Medicaid prescriptions, attempts to collect must be made, documented and only waived on a case-by-case basis.

Pharmacies using house charge accounts face additional challenges. Providing itemized invoices showing payments made on the account will likely be required. Written policies and procedures should be in place if charge accounts are used and may be necessary to submit to the PBM.

Secondary payor information (and/or payment) may be necessary when coupons or discount cards are used. Caremark Provider Manual, Section 3.03.03 addresses the use of coupons and other programs. Remember that Medicare, Medicaid and TRICARE prohibit the use of manufacturer coupons and discount programs.

Pharmacies not able to provide sufficient evidence of copay collection not only face full recoupment of claims, but could face termination of contract and risk Fraud, Waste, and Abuse investigations and charges linked to the False Claims Act.

PAAS Tips:

  • See Caremark® 2022 Provider Manual for additional information regarding copay collection:
    • 3.03.03 (coupons)
    • 3.03.04 (proof of payment)
    • 3.03.08 (waivers)
    • 3.03.09 (financial hardship)

Contact PAAS National® at (608) 873-1342 or visit our website, paasnational.com/buy-now for more information on adding our FWA/HIPAA compliance program.

2022 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 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 2022 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.

Contact us TODAY at (608) 873-1342 or info@paasnational.com and add FWA/HIPAA 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

Humana Compliance Requirements – Training and Exclusion Checks Are Not Enough

PAAS National® analysts have received several questions regarding Humana’s 2022 Notice of Program Requirements. Humana’s Compliance Policy for Contracted Healthcare Providers explicitly states pharmacies must have a compliance program that meets the seven elements outline by CMS, including written policies, procedures and standards of conduct. Per the 2022 Pharmacy Compliance Education and Training Requirements FAQs: “Humana reserves the right to request documentation (e.g., policies and tracking records) confirming that your organization has an effective compliance program that meets the requirements outlined in the Compliance Policy and Standards of Conduct.”

PAAS’ Fraud, Waste & Abuse and HIPAA Compliance program keeps members compliant beyond training and exclusion checking. Since 2009, the program was designed to meet these CMS requirements, with the full support of our expert staff – pharmacists just like you, with years of experience helping community pharmacies with FWA and HIPAA compliance.

If you aren’t a member of FWA/HIPAA and are interested in saving $126 on your membership, please contact PAAS at (608) 873-1342 to become an Elite member.

PAAS Tips:

    1. Members can contact PAAS (608) 873-1342 if you have any questions
    2. See December 2021 Newsline article PBM Provider Manual Updates – What You Need to Know
    3. See August 2021 Newsline article Humana Audit Program Updates

Self-Audit Series #13: Diabetic Test Strips

The 2020 National Diabetes Statistics Report, analyzed data through 2018 and found that there are over 34 million Americans with diabetes (approximately 1 in 10 Americans). Additionally, there are 88 million Americans with prediabetes (approximately 1 in 4 Americans). Based off this data, there are more than 120 million people in the United States that are living with diabetes or prediabetes. Due to the high volume of claims for diabetic test strips, they continue to receive significant attention during third-party audits. Follow the tips below to be prepared if you get an audit.

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Purchasing Requirements

  • PBM contracts require that pharmacies purchase test strips from vendors that are licensed distributors in your state
  • OptumRx® requires purchases from suppliers that have received NABP’s Drug Distributor Accreditation (DDA) (formerly known as “VAWD® Accreditation”)
  • Caremark® and Express Scripts® also require test strips to be purchased directly from the manufacturer or from authorized distributors only.
  • Consider purchasing test strips from one approved wholesaler to make things easier
  • Major test strip manufacturer’s have lists of “authorized distributers” on their websites
  • Beware of secondary wholesalers which are subsidiaries of authorized distributors who may not show up on the authorized list (e.g., River City and Masters)

Billing

  • Make sure that prescriptions have calculable instructions – use as directed is not accepted upon an audit
  • Confirm that you are billing the correct NDC – many test strips have a “retail” version and a “Medicare/Medicaid only” version
  • Verify the NDC billed is for the correct package size – do not bill the #100 count NDC if you are dispensing the #50 count box
  • Dispense only one NDC per claim – you should not dispense 1 x #100 count and 1 x #50 count to equal #150 test strips
  • Dispense the package size that is closest to the total quantity – if the prescription is for #200, dispense 2 x #100 count, not 4 x #50 count; some plans prohibit dispensing smaller packages
  • Submit the accurate days’ supply based on the quantity and instructions
  • If you are billing DMEPOS for Medicare beneficiaries, make sure that you submit the correct modifier to indicate if the patient is using insulin (KX) or not using insulin (KS)
  • Some payers may require a diagnosis code at the time of billing to support the clinical need

Additional Newsline Article References for Self-Audit

Are You Prepared to Prove TIRF REMS Program Compliance?

The purpose of the Transmucosal Immediate-Release Fentanyl (TIRF) Risk Evaluation and Mitigation Strategy (REMS) Program is “to mitigate the misuse, abuse, addiction, overdose, and serious complications due to medication errors with the use of TIRF medicines.” If your pharmacy dispenses Actiq®, Fentora®, Subsys®, or other medications which fall under the TIRF program, now is a good time to evaluate your compliance with all TIRF REMS requirements. The program has strict standards for all stakeholders involved with TIRF products including program administrators, wholesalers, prescribers, pharmacies and patients. Annually, the program administrators must audit all certified outpatient pharmacies who ordered at least one shipment of a TIRF medication in the preceding 12 months, up to 400 pharmacies.

PAAS National® analysts have seen audits recently conducted by Compliance Architects®, a company which offers many services including FDA risk management and compliance consulting. The audits have consisted of a short online survey followed by a self-scheduled virtual meeting. During the audit process, pharmacies are expected to share copies of various program-related documents such as:

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A key factor to successfully completing the audit is being able to provide robust policies and procedures which meet all program requirements. Whether you’re reviewing your current policies and procedures, or find yourself without this key compliance element, reviewing the Pharmacy Education document found online under the Pharmacy page of the TIRF REMS Access Program website is a good starting point. Mirroring each section from the Pharmacy Education document in your own policy and procedure can help ensure all compliance elements are captured.

If your pharmacy is found to be non-compliant, the type and severity of the offense determines the reprimand (which may consist of a corrective and preventative action plan, continued monitoring for compliance or potentially deactivation from the TIRF REMS program). A copy of the TIRF REMS Non-Compliance Protocol can be found on the Access Program website.

PAAS Tips:

  • All pharmacies dispensing TIRF REMS medication must have an Authorized Representative who successfully completed the TIRF REMS Pharmacy Knowledge Assessment, submitted the Pharmacy Enrollment Form and attested to following all program requirements.
  • Ensure all staff involved in the ordering, inventory management and dispensing of TIRF REMS medications have been trained by the pharmacy’s Authorized Representative.
  • The pharmacy must re-enroll and successfully complete the enrollment requirements every two years. The PAAS Vault can be utilized to store your enrollment forms and proof of training to ensure they are readily accessible for an audit. For more information on the PAAS Vault call 608-873-1342.
  • Have robust written policies and procedures which outline how your pharmacy will meet all program requirements including, but not limited to:
    • Checking for changes in a patient’s medication use and opioid tolerance
    • Documenting the patient’s around-the-clock opioid medication and RDA
    • Verifying the prescriber and the patient are enrolled in the TIRF REMS Program
    • Providing the patient with the product-specific Medication Guide and counseling
    • Reporting adverse events
    • Prohibiting the distribution, transfer, loaning or selling of TIRF medicines to other providers
  • For access to the full FDA TIRF REMS program information, access the FDA REMS online database

COVID-19 Oral Therapeutics Antiviral Billing Guidance

Two oral products have received Emergency Use Authorization for the treatment of COVID-19 infection – PaxlovidTM (Pfizer) and Molnupiravir (Merck). Both products are a 5-day course and are only authorized for dispensing pursuant to a patient-specific prescription or delegated collaborative practice agreement. Unfortunately, the FDA did not authorize independent prescribing by pharmacists.

Like the COVID-19 vaccines, oral therapeutics are purchased by the federal/state government and distributed to pharmacies at no cost. However, oral therapeutics are in very limited supply and only available to pharmacies that are part of the Federal Retail Pharmacy Program or directly from state health departments. Also, similar to the COVID-19 vaccine, oral therapeutics must be dispensed with no cost to the patient.

Billing

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Here are some excerpts from NCPDP Emergency Preparedness Guidance on billing for free product:

  • Ingredient Cost Submitted (NCPDP field 409-D9) of “$0.00” (you may need to use “$0.01”)
  • Basis of Cost Determination (423-DN) of “15”
  • Dispensing Fee Submitted (412-DC), submit your typical fee that you otherwise would for any other claim (e.g., $12.00)
  • Professional Service Code (440-E5) of “PE” due to extra consultation needed with these products
  • Incentive Amount Submitted (438-E3), submit additional fee associated with professional service code
Drug NDC Quantity Common Dosing Common Day Supply
PaxlovidTM 300 mg-100 mg tablet 00069-1085-30 30

20*

 3 tablets BID x 5 days

2 tablets BID x 5 days (renal)*

 5
Molnupiravir 200 mg capsule 00006-5055-06 40

*Renal dose adjustment for eGFR <60 but ≥ 30 mL/min

Reimbursement

While Medicare has covered COVID-19 vaccines under the Part B (medical) benefit, the oral therapeutics are a Part D (pharmacy) covered benefit. Medicare has not required plan sponsors to pay a dispensing fee, but instead “encourages” a dispensing fee. Commercial payers and Medicaid programs are expected to cover oral therapeutics under the pharmacy benefit and dispensing fee reimbursement may vary. The government has not required payers to cover oral products at all pharmacies and normal in-network limitations may apply.

Thus far, it appears that Part D Plans/PBMs are NOT providing reasonable reimbursement to pharmacies as evidenced by NCPA’s letter to CMS on January 18, 2022.

PAAS Tips:

New OTC COVID-19 Resources for Community Pharmacies

On February 2, PAAS National® announced new COVID-19 resources for PAAS Audit Assistance members to aid in billing commercial third-parties for OTC COVID-19 tests.

Members can access these tools, day supply charts, on demand webinars and more by logging into the PAAS Member Portal.

Not a member but interested in accessing COVID-19 tools available to you, click here. For member only tools call (608) 873-1342 to join today!