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 Practices Become an audit assistance member today to continue reading this article. As a member, you’ll have access to hundreds of articles and receive our monthly proactive newsletter!
- 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.
DAW Code Audit Pitfalls to Avoid
- 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.
PAAS Tips:
- 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
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.
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:
Bill It Right – Diazepam Gel
Diazepam rectal gel continues to confuse prescribers and pharmacies alike when it comes to how a prescription is written and then ultimately filled and billed. According to FDA labeling, this medication “is intended for the acute treatment of intermittent, stereotypic episodes of frequent seizure activity (i.e., seizure clusters, acute repetitive seizures) that are distinct from a patient’s usual seizure pattern in patients with epilepsy 2 years of age and older.”
Diazepam gel comes in three strengths: 2.5 mg, 10 mg (5-7.5-10 mg), and 20 mg (12.5-15-17.5-20 mg). Each box contains two doses and is billed as “1 each.” The standard dosing for diazepam gel is one dose for appropriate seizure activity and repeat 4 to 12 hours later if prescribed. The FDA recommends that diazepam rectal gel be used to treat no more than five episodes per month and no more than one episode every five days, therefore one package should be considered a 5-day supply at minimum.
PAAS Tips:Join today!
- If a quantity is unclear, verify it with the prescriber and make a clinical note
- If a prescriber writes for a quantity of “2,” do they mean 2 doses (1 box) or 2 boxes (4 doses)?
- Most PBM audit enforcement of this medication revolves around quantity errors
- One box is 2 doses but billed as “1 each”
- Suggested days’ supply for one box is 5 based on FDA dosing recommendations
- Use caution and clinical common sense when filling refills
- Do not place this medication, or any emergency/rescue medication, on auto-refill
- Auditors track refill history which may open you up to audits if filling emergency/rescue medications at a higher rate than other pharmacies
- See September 2020 Newsline article, Suggested Days’ Supply for Emergency Medications for other frequent audit targets
2022 DEA Pharmacist’s Manual Updates – What’s Changed?
With the DEA and wholesalers cracking down on the dispensing of controlled substances and dangerous drug cocktails (see our July 2020 Newsline article Beware: DEA and Wholesalers are Cracking Down on Controlled Substance Dispensing for additional details), pharmacies might consider revising their controlled substance handling policy. In addition to resources provided by your State Board of Pharmacy or state pharmacy association, another valuable reference is the DEA Pharmacist’s Manual which was recently updated in 2020, and revised in 2022.
For those who have read the 2020 manual and are wondering what has changed, here is a summary of several major updates:
Being familiar with the guidance provided in the current version of the DEA Pharmacist’s Manual is recommend for any pharmacy that dispenses controlled substances and the manual would be a great resource to utilize if you are revising or developing policies and procedures for the handling of controlled substances.
Breaking Insulin Pen Boxes: Where Are We Now?
This month marks two years since the U.S. Food and Drug Administration (FDA) clarified their intentions behind revising insulin pen labeling, yet insulin pen boxes continue to present issues to pharmacies trying to establish best practices surrounding its dispensing and billing. Let’s review the historical context and recent NCPDP guidance that PAAS is starting to see Payors/PBMs implement.
For historical context, Walgreens settled with the Department of Justice (DOJ) in January 2019 for $209.2 million due to their pharmacies improperly billing insulin pen boxes. Patients’ insulin pen prescriptions were placed on automatic refill with inaccurate days’ supply, resulting in millions of dollars of waste. Six months later, the FDA contacted insulin pen manufacturers requesting the labeling found on insulin pen boxes and package inserts be updated. As a result, the new labeling “dispense in the original sealed carton” was approved and subsequently printed on insulin pen boxes. In February of 2020, the new label had made its way through the supply chain and PAAS had issued a member alert to stop breaking boxes due to PBM audit enforcement. However, eight months later, in October 2020, the FDA released “clarification” on their guidance of breaking insulin pen boxes, stating they acknowledge scenarios where breaking insulin pen boxes may be appropriate. In November 2020, PAAS wrote a Newsline article, reiterating our guidance that “while the FDA may understand and permit dispensing of individual pens on an exception basis, payors and PBMs may not” and therefore best practice would be to refrain from breaking insulin pen boxes.
As these updates were occurring, PAAS was an active participant in NCPDP Task Force Group meetings. In May 2021, NCPDP added an example scenario in Section 6.19 of their Telecommunication Version D and Above Questions. When a pharmacy is submitting a full insulin pen package and the calculated days’ supply exceeds the plan’s days’ supply limit, NCPDP’s guidance clearly states, “days’ supply restrictions should not hinder the pharmacy’s ability to dispense a full package” and subsequently states if “[the payer system requires some type of override action by the pharmacy], the recommendation is to use a Submission Clarification Code value 10 = Meets Plan Limitations. The pharmacy certifies that the transaction is in compliance with the program’s policies and rules that are specific to the particular product being billed.”
Recently, pharmacies have begun receiving adjudication rejects requesting the pharmacy to consider the use of SCC 10 when the days’ supply exceeds the plan limit. This presents potential audit risk and should be used as an opportunity to remind pharmacy employees of the importance of adjudication messaging. Billing the accurate, and larger, days’ supply (with an SCC=10 override), could put the pharmacy into an “extended days’ supply” (EDS) network. As such, it is possible that lower reimbursement and/or multiple member copays will occur. Pharmacies that ignore the messaging and reduced the days’ supply to the plan limit could face audits where PBMs argue pharmacies forewent using SCC 10 to avoid decreased reimbursement and failure to collect the appropriate copay amounts, causing the Payor’s costs to increase.
So, what is PAAS’ guidance given this new wrinkle? While audit risk related to breaking insulin pen boxes remains largely theoretical, pharmacies know PBMs cannot be trusted. PBMs enforce many other unbreakable packages (e.g., see PAAS Newsline article HIV Medications Cause Large Recoupments) and PAAS is aware of only one Payor who has formally stated it was “okay” to break insulin pen boxes. PBMs love the deregulated, opaque world they operate in, and failure to provide further guidance to pharmacies allows them to be judge, jury and executioner should they decide to enforce the FDA labeling restrictions. The SCC adjudication guidance adds another challenge for pharmacies trying to bill claims accurately.
PAAS Tips:Join today!
- Continue to bill for full boxes of insulin pens with an accurate days’ supply
- Review our updated Can You Bill It As 30 Days? document located in the PAAS Member Portal under ‘Tools & Aids’
- Obtain prescriber authorization when a larger quantity than what was originally prescribed is warranted, along with a corresponding clinical note
- Follow claim adjudication logic to lower audit risk – watch for SCC=10 guidance
- Review past Newsline articles related to insulin pens, including:
- March 2020 Stop Breaking Insulin Pen Boxes
- April 2020 Stop Breaking Insulin Pen Boxes – Your Questions Answered
- November 2020 FDA Guidance on Insulin Pens Puzzling
- Review our Dispense in Original Container chart, located in the PAAS Member Portal, for additional unbreakable packages
- Listen to PAAS’ On-Demand Webinar entitled “Thriving Against PBM Audits-Audit Trends and Tactics” to hear President Trent Thiede walk through the history of dispensing insulin pen boxes and examples of proper billing practices
Flu Shot Season Is Here – What Is Needed for Audit?
COVID-19 has forced a significant increase in the number of vaccinations pharmacies do daily. With this increase also comes additional audits. PAAS National® frequently sees PBMs audit for all vaccinations, including influenza. Now is the time to check that you have all documentation in place for this year’s flu shot season.
What you will need for an audit:Join today!
- Order
- A signed order from an authorized prescriber or
- A signed protocol that is up to date and includes specific vaccination(s) to be administered
- When using a protocol, create a placeholder prescription with all prescription elements
- Vaccination Information Statement (VIS)
- Required to be given to patient prior to each administration
- Be sure you have the most current VIS forms
- Vaccination Administration Record (VAR)
- Name of vaccine administered
- Lot and Expiration Date of vaccine given
- Site of administration (i.e. right arm)
- Signature or initials and title of person administering
- What VIS form was given
- Form can be used as proof of receipt on audit
- Check dates and vaccines on your protocols to ensure they are up-to-date
- Have current VIS forms printed for each vaccine you administer
- Have VAR forms printed and educate all staff on how to complete the forms
- All vaccines should be submitted using days’ supply of “1”
- All vaccines administered with protocol should be submitted with origin code of “5” (pharmacy created)
- Be sure correct quantity is billed, typically 0.5 mL, may need to consult with software vendor for guidance
- Keep vaccine documents stored in a system that makes access easy in case of an audit
VAR and VIS forms, and information regarding what the CDC requires for health care providers to record, can be found on the CDC website.
PAAS Tips: