If you receive a prescription for a medication that you do not have in stock, you can purchase this medication from another pharmacy and are not required to obtain the tracing information.
However, if it’s not for a specific patient need, or for an amount that exceeds the prescription in question, it is likely not exempt from tracing requirements. With gross margin compression, it’s understandable that pharmacies may use marketplaces like MatchRx, Rxeed, EzriRx or others to find deals, but you must consider DSCSA requirements (i.e., not for anticipatory needs unless you’re obtaining tracing information). These marketplaces claim DSCSA compliance pursuant to a specific patient need (see Rxeed, MatchRx, and EzriRx).
Interestingly, both MatchRx and EzriRx use an identical “industry interpretation”:
Industry interpretation for Specific Patient Need includes situations in which a dispenser has a prescription in hand for an identified patient, a recurring prescription for an identified patient, or written/electronic notice from a provider that a prescription for an identified patient is forthcoming.
What’s not a specific patient need? Any time you are increasing or replenishing stock instead of dispensing the product when you receive it. On an invoice audit, PBMs expect a product to be dispensed in short order if the pharmacy is claiming exemption from tracing requirements pursuant to a specific patient need.
Here is an excerpt directly from the OptumRx Provider Manual:
‘Any inter-pharmacy transfers or purchases made through intermediary third parties or marketplaces for the purpose of increasing or replenishing stock, and not made to fulfill a specific patient need for an identified patient, are subject to the requirement to obtain transaction history, transaction information, and a transaction statement for the product.’
The industry interpretation language for “a recurring prescription for an identified patient” has no direct reference and is not likely to hold weight with PBMs as they interpret laws as they see fit. Absent state/federal regulations to the contrary, pharmacies will have a hard time convincing PBMs that a specific purchase transaction is exempt from tracing requirements for a recurring prescription dispensed several weeks, if not months, later.
Another exemption that these marketplaces reference is purchases under a declared public health emergency (PHE). While pharmacies have become accustomed to the term since COVID, there are a multitude of currently declared PHEs ongoing simultaneously, including the Opioid Crisis (since 2017) and now Monkey Pox (2022). However, the exemption only applies when the drug shortage is a result of the PHE. Under DSCSA 581(24)(B)(iii) it states:
‘the distribution of a product for emergency medical reasons including a public health emergency declaration pursuant to section 319 of the Public Health Service Act, except that a drug shortage not caused by a public health emergency shall not constitute an emergency medical reason;’
If you are purchasing a medication that is not for a specific patient need, and readily available from your primary wholesaler, it would be difficult for a pharmacy to demonstrate that they were exempt from tracing requirements in a pharmacy-to-pharmacy transaction as a result of a drug shortage related to the PHE.
Regardless, when purchasing non-controlled inventory from another pharmacy, documentation should include:
- Pharmacy name, address, and NCPDP number transferring from
- Drug name, quantity, lot number, expiration date, and NDC number should all be included on the transfer invoice
- Date of transfer and date of receipt of drug
- Reason for transfer (e.g., complete Rx #1234)
- Method or proof of payment (check # or credit card receipt)
Invoice shortages or invalid purchases put claims at risk of recoupment and may lead to the pharmacy having to implement a corrective action plan. In some cases, shortages can even lead to contract termination. Be sure you consider all the risks when making purchases to supplement your primary wholesaler. Would you be able to show DSCSA compliance (or exemption) and provide all required documentation necessary in case of an audit?
PAAS Tips:
- Anticipatory purchasing from another pharmacy to restock supply requires DSCSA tracing information
- DSCSA exemptions for PHEs apply only when the drug being purchased is in short supply due to the PHE
- When purchasing for a Specific Patient Need, make sure to document accordingly and only procure the necessary amount for the prescription
- Be sure to retain all supporting documentation related to the purchase and have accessible in the event of an invoice audit
DMEPOS Mini-Series #8 – The Six Medicare Auditing Entities and Their Purpose
The six Medicare auditing entities are responsible for auditing records, claims and payments. While they may use different methods to conduct audits, they all aim to detect, correct, and prevent improper payments to curb fraud, waste, and abuse and protect the Medicare Trust Fund. The Medicare Program Integrity Manual contains the policies and responsibilities for the entities tasked with medical and payment review.
What is the rationale for having these auditing entities? Taxpayers and future Medicare beneficiaries benefit when Medicare payments are returned to the Medicare Trust Fund. Subsequently, these audits lower the Medicare payment error rates. On occasion, pharmacies can benefit if there are any underpayments identified during an audit, in which case those dollars will be repaid to the pharmacy.
Listed below are six Medicare contractors that conduct audits and their main objectives:
PAAS Tips:
Navigating PBM Audits
Working collaboratively can be key to either avoiding a PBM audit altogether or making the process as painless as possible.
Be on the Lookout for OptumRx Unannounced Onsite Audits
Receiving a PBM onsite audit notice can be intimidating but the pharmacy typically has some time to prepare before the auditor arrives. However, are you aware that pharmacies can receive unannounced onsite visits from PBMs, FDA inspectors, DEA agents or Board of Pharmacy inspectors? Being prepared for an unannounced audit is crucial and PAAS National® wants to make sure you have the tools to be successful. PAAS has become aware that OptumRx is again performing their unannounced onsite audits, see the tips below to help you be prepared should you get an unexpected visit.
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- Utilize our Onsite Credentialing Guidelines resource
- Provides a list of frequently asked questions from the PBM auditors
- Includes references to the PAAS National® Policy and Procedure Manual for our Fraud, Waste & Abuse and HIPAA Compliance members
- These audits typically focus on credentialing requirements and not prescription review
- Auditors may check licenses, on-hand stock of certain medications and may ask permission to take a few photos – If you are a PAAS Vault member and have uploaded licenses to the portal, those licenses are available at your fingertips
- Two auditors may be present, and the visit is usually about 30 minutes
- See the OptumRx Provider Manual for more information regarding an onsite audit.
- “Administrator or its designee shall have the right, with or without notice, at reasonable times, to access, inspect, and review on-site the facilities, licenses and credentialing documents/records of Network Pharmacy Providers and pharmacy locations applying to participate in any of Administrator’s Benefit Plans, as well as make copies of the licenses credentialing documents/records etc. maintained by pharmacy. Pharmacy agrees to cooperate with Administrator or its designee with the on-site visit and acknowledges non-cooperation with an on-site visit may result in denial or termination of network participation.”
- See the July 2022 Newsline, Is Your Pharmacy Ready for an Unannounced Audit?
Fraud, Waste, and Abuse Compliance Programs Are Not Optional
PAAS National® analysts continue to see audits requesting documentation of compliance policies and procedures. FWA Training and OIG/GSA exclusion checks are not enough to be compliant as they do not constitute a compliance program. Since 2009, PAAS’ Fraud, Waste & Abuse and HIPAA Compliance program has been designed to meet CMS’ seven core elements required to adopt and implement an effective compliance program, which include:
PBM Provider Agreements require pharmacies to have a compliance program that meets CMS standards, and they reserve the right to request documentation of your compliance policies and procedures.
Consider the following:
Ensure you have all your compliance bases met so you can provide proof when requested for credentialing or audit. Don’t have an FWA/HIPAA Compliance Program? Contact PAAS, info@paasnational.com or (608) 873-1342 and get started today!
Caremark Bulk Purchase Requirements
As 2022 comes to a close, we know that many pharmacies will make “bulk purchases” ahead of the new year in anticipation of price increases or to obtain wholesaler rebates. Remember that Caremark requires pharmacies to provide notice of any bulk purchases that may impact future invoice audits, in accordance with Section 8.05 of the Caremark Provider Manual.
If your pharmacy plans to make any large purchases, be sure to
Pharmacies should submit notifications to the addresses provided below.
Email: PharmacyAudit@CVSHealth.com
Mail:
CVS Caremark
Attn: Bulk Purchase Notification, MC 020
9501 E. Shea Blvd. Scottsdale, AZ 85260
PAAS National® analysts have seen a few Caremark response letters that state the following, “review of the recent purchases made show they are routine in nature and would not be considered a bulk purchase”. It is unclear what criteria are used to make this determination; however, PAAS believes it is in your best interest to submit such notifications when the purchases are larger than what is “normal” for your pharmacy. We suggest that pharmacies retain this response from Caremark such that you could use it in the event of a future audit to demand that these purchases are included.
Lastly, some pharmacies have been confused by automatic email replies from Caremark with subject of Automatic Reply: Pharmacy Audit and the body of the email stating that the email address is a general mailbox for potential pharmacy audit issues and provides further instructions on how to submit “internal requests” and “external requests”. PAAS has confirmed that these are simply automatically generated replies and that pharmacies will receive a response specific to the bulk purchase notification within a few days.
PAAS Tips:
On-Demand Webinar: Don’t Give PBMs a Reason to Audit (Or Terminate): Off-Label Drug Use and Compliance Requirements
On November 9, 2022 PAAS National® hosted “Don’t give PBMs a reason to audit (or terminate): Off-label drug use and compliance requirements” webinar. PAAS Audit Assistance members have access to the recorded webinar, in addition to many other tools and resources on the PAAS Member Portal.
For easy viewing, we’ve split the webinar into three separate recordings.
Pharmacy to Pharmacy Inventory Transfers – Buyer Beware!
Drug shortages are pervasive to pharmacy practice – NCPA just reported an astonishing 98% of community pharmacies are experiencing drug shortages. As entrepreneurs, community pharmacy owners have always found creative ways to take care of patients. Pharmacy to pharmacy transfers are commonplace in the industry, but much has changed since Lipitor® and Prevacid® were used as currency in a legal drug exchange.
The Drug Quality and Security Act was enacted by Congress November 27, 2013. Title II of this Act was the Drug Supply Chain Security Act (DSCSA), which “outlines steps to achieve interoperable, electronic tracing of products at the package level to identify and trace certain prescription drugs as they are distributed in the United States”. The goal of the DSCSA is to secure the US drug supply chain and protect consumers from exposure to drugs that may be counterfeit, stolen, contaminated, or otherwise harmful. The FDA expects that the vast majority of prescription drug products, that are ultimately dispensed to US consumers, have flowed through the “tracked” and “traced” supply chain. The law provides for very limited exceptions where prescription medications can be sourced outside of the tracked and traced system.
In an FAQ published by the FDA, the issue of pharmacy to pharmacy transfers is addressed:
When a pharmacy sells a product to another pharmacy, do the DSCSA product tracing requirements related to transaction history, transaction information and transaction statements apply?
Yes, except for sales by a dispenser to another dispenser to fulfill a specific patient need. The law defines a “specific patient need” as the transfer of a product from one pharmacy to another to fill a prescription for an identified patient and does not include the transfer of a product from one pharmacy to another for the purpose of increasing or replenishing stock in anticipation of a potential need. You can find more information in sections 581(19) and 582(d)(1)(A)(ii) of the FD&C Act.
So, what does this mean for your pharmacy?
However, if it’s not for a specific patient need, or for an amount that exceeds the prescription in question, it is likely not exempt from tracing requirements. With gross margin compression, it’s understandable that pharmacies may use marketplaces like MatchRx, Rxeed, EzriRx or others to find deals, but you must consider DSCSA requirements (i.e., not for anticipatory needs unless you’re obtaining tracing information). These marketplaces claim DSCSA compliance pursuant to a specific patient need (see Rxeed, MatchRx, and EzriRx).
Interestingly, both MatchRx and EzriRx use an identical “industry interpretation”:
Industry interpretation for Specific Patient Need includes situations in which a dispenser has a prescription in hand for an identified patient, a recurring prescription for an identified patient, or written/electronic notice from a provider that a prescription for an identified patient is forthcoming.
What’s not a specific patient need? Any time you are increasing or replenishing stock instead of dispensing the product when you receive it. On an invoice audit, PBMs expect a product to be dispensed in short order if the pharmacy is claiming exemption from tracing requirements pursuant to a specific patient need.
Here is an excerpt directly from the OptumRx Provider Manual:
‘Any inter-pharmacy transfers or purchases made through intermediary third parties or marketplaces for the purpose of increasing or replenishing stock, and not made to fulfill a specific patient need for an identified patient, are subject to the requirement to obtain transaction history, transaction information, and a transaction statement for the product.’
The industry interpretation language for “a recurring prescription for an identified patient” has no direct reference and is not likely to hold weight with PBMs as they interpret laws as they see fit. Absent state/federal regulations to the contrary, pharmacies will have a hard time convincing PBMs that a specific purchase transaction is exempt from tracing requirements for a recurring prescription dispensed several weeks, if not months, later.
Another exemption that these marketplaces reference is purchases under a declared public health emergency (PHE). While pharmacies have become accustomed to the term since COVID, there are a multitude of currently declared PHEs ongoing simultaneously, including the Opioid Crisis (since 2017) and now Monkey Pox (2022). However, the exemption only applies when the drug shortage is a result of the PHE. Under DSCSA 581(24)(B)(iii) it states:
‘the distribution of a product for emergency medical reasons including a public health emergency declaration pursuant to section 319 of the Public Health Service Act, except that a drug shortage not caused by a public health emergency shall not constitute an emergency medical reason;’
If you are purchasing a medication that is not for a specific patient need, and readily available from your primary wholesaler, it would be difficult for a pharmacy to demonstrate that they were exempt from tracing requirements in a pharmacy-to-pharmacy transaction as a result of a drug shortage related to the PHE.
Regardless, when purchasing non-controlled inventory from another pharmacy, documentation should include:
Invoice shortages or invalid purchases put claims at risk of recoupment and may lead to the pharmacy having to implement a corrective action plan. In some cases, shortages can even lead to contract termination. Be sure you consider all the risks when making purchases to supplement your primary wholesaler. Would you be able to show DSCSA compliance (or exemption) and provide all required documentation necessary in case of an audit?
PAAS Tips:
Authorized Distributors of OTC Diabetic Test Devices
Most pharmacies are familiar with the basic requirements of the Drug Supply Chain Security Act (DSCSA), including the requirement to purchase prescription products from authorized suppliers. However, one important caveat of the DSCSA is that it does not apply to OTC products (such as diabetic test strips). Because of this, OTC wholesalers and distributors do not have to maintain or provide track and trace information (pedigree) to confirm the authenticity of these products. This makes it difficult for pharmacies to determine if they are purchasing from an appropriate source and if the low prices offered are for legitimate product.
During a PBM invoice audit, purchases made from suppliers that are not identified as “authorized” may not be accepted and you may be found to have a shortage leading to significant financial recoupments and possible network termination.
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- Both Express Scripts and Caremark have required pharmacies to purchase test strips from “authorized distributors” of the manufacturer since 2016
- See California’s public listing for a comprehensive list
- OptumRx requires pharmacies purchase from suppliers that are licensed wholesalers and have NABP Drug Distributor Accreditation (DDA) formerly known as VAWD
- Note that VAWD/DDA is not synonymous with “authorized distributor” status
- For example, Masters Pharmaceutical has NABP DDA status but is NOT an authorized distributor of diabetic test strips
- Some pharmacies have made the mistake of seeing “McKesson” on authorized distributor list and assumed that a subsidiary such as “Masters” is also authorized, even though not explicitly listed as such – if not explicitly listed, then confirm before purchasing
- See August 2021 article Invoice Audit Pitfalls – Are Your Wholesalers Legitimate? for additional invoice audit considerations
Product Substitution Best Practices
Consider a scenario where your pharmacy has been dispensing a product for years and you find that the product is being discontinued, requiring a product substitution. What steps should be taken to ensure your pharmacy is protected in case of an audit?
Most recently, this has been the case for pharmacies dispensing ProAir® HFA. Since it now has been discontinued and supplanted with ProAir RespiClick®, can the product be substituted without needing to contact the prescriber?
Before automatically substituting, it would be wise to review a product’s therapeutic equivalence. Drugs approved under a New Drug Application (NDA), or Abbreviated New Drug Application (ANDA), will be found in the FDA Orange book and use Therapeutic Equivalency (TE) Codes to establish equivalency ratings. Biologics, on the other hand, are approved under a Biologic License Application (BLA) and will be found in the FDA Purple Book. The Purple Book does not use TE codes, but rather matching color cards and category headers to indicate biosimilars and interchangeable biosimilars.
Beyond the TE Codes (primarily used to identify generic equivalents), compare the original product’s NDA to the NDA of the product you are looking to substitute. To continue with the ProAir® example, consider the NDA of both ProAir® HFA and ProAir RespiClick®:
Since the NDA numbers do not match, it would be appropriate to obtain prescriber approval and document authorization to substitute the ProAir RespiClick® for the ProAir® HFA. When requesting the change, consider obtaining a new order to help mitigate audit risk. Substituting the RespiClick on the same Rx Number has a higher likelihood to flag for potential audit.
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NCPDP Modified Section 11.15 of the Emergency Preparedness Guidance Document – COVID-19 Oral Antivirals Billing
NCPDP Emergency Preparedness Guidance document version 1.15 was published in August 2022. PAAS would like to point out some of the updates and additions to section 11.15 of the document Billing of a Self-Administered Free COVID-19 Oral Antiviral During an Emergency.
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- Like the COVID-19 vaccines, oral therapeutics are currently purchased by the federal/state government and must be dispensed with no cost to the patient
- Before a pharmacist prescribes an oral antiviral to treat COVID-19 under the EUA, they must make an assessment and determine if the patient meets the criteria
- When billing a claim for a no-cost product, the claim request uses standard fields with applicable pricing and professional service identifiers
- Section 11.15.1 is now titled Free Product Dispensing with Unique Dispensing Requirements, (e.g., patient education/counseling for the Dispensed Medication)
- Added diagnosis code and prescriber ID bullets
- Professional service code – removed “AS” and modified the “PE” description – (Patient Education (PE) should be submitted on the claim to identify the unique dispensing requirements)
- Modified the incentive amount submitted descriptions
- Updated the example table
- Added insurance segment, origin code segment, and prescriber segment
- Changed the DUR/PPS segment professional service code value to PE – patient education
- Added an entire claim response to the example
- To help standardize how these claims are processed, NCPDP recommends billing separate claims for the following:
- Product dispensing (B1 claim) See section 11.15.1 for correct claims processing
- Patient assessment (S1 or B1 with the 11-digit EUA patient assessment product/service ID)
- Once an assessment is complete, it could be determined the patient does not meet the criteria – pharmacy should bill a patient assessment only claim – see link to section 11.16 below
- If a completed assessment results in the product being prescribed, the pharmacy may need to submit the claim for the patient assessment to one payer and the claim for the product to another payer
- Inserted new section 11.16, Billing of Patient Assessment, Professional Services Associated to EUA COVID-19 Oral Antiviral Pharmacist Prescriptive Authority
Review February 2022 Newsline, COVID-19 Oral Therapeutics Antiviral Billing Guidance for more information on billing guidance from NCPDP