Last month, PAAS National® wrote about the record-setting $6.8 billion in False Claims Act recoveries in fiscal year 2025. With a continued and expanding focus on fraud enforcement, and strong recoveries in the health care and life sciences, expect an increase in cases the Department of Justice is investigating. In a recent case, two individuals from Queens, NY, were charged with defrauding Medicare and Medicaid by paying illegal kickbacks and bribes, and submitting claims for services that were never provided.
From 2016 to 2026, the two defendants used a pharmacy and two social adult day care centers, meant to help senior citizens, to fraudulently bill Medicare and Medicaid $120 million. The fraud started by luring Medicare patients with illegal cash payments and supermarket gift cards to induce them to fill prescriptions at the defendants’ pharmacy. The same type of illegal cash kickbacks were paid to Medicaid patients to enroll in the social adult day cares owned by the same men. The claims submitted to Medicaid for the day care services often exceeded the permitted capacity of the facilities.
Some of the healthcare fraud cases PAAS summarizes in our Newsline articles are brazen, extreme cases, but they can also serve as a good reminder to review how you are conducting business. For example, most pharmacies are not giving cash and gift cards to patients for filling prescriptions at their pharmacy, but routinely waiving copays can be another form of an illegal inducement under Anti-Kickback Statutes (and Civil Monetary Penalties Law) and implicate FCA violations.
PAAS Tips:
- Review past Newsline articles for more information on the increase in healthcare fraud enforcement:
- PAAS FWA/HIPAA Compliance Program meets CMS’ definition (and PBM requirements) of an effective compliance program. Contact PAAS at info@paasnational.com or (608) 873-1342 to get started today!
Having an NDC Does Not Mean FDA Approved
The first step in getting a new manufacturer/product on the market starts with a manufacturer, repackager, or distributor registering with the FDA to obtain a labeler code (the first set of numbers in the NDC). Once the labeler code is obtained, the company then assigns the product code (middle set of numbers in the NDC) and the package code (the last set of numbers in the NDC). The company then submits the final NDC to the FDA to have their product added to the FDA’s NDC SPL Data Elements File (NSDE). In other words, the FDA does not assign the NDC number.
A misconception some pharmacies have is a product with an NDC means that…
Did you know there is much more to your audit assistance membership than just help with audits? The PAAS Member Portal contains a wealth of information and resources to assist you with audits and member service questions. Below is a list of 6 pages found on the Audit Assistance section of the PAAS Member Portal to assist you and your pharmacy staff to be proactive when it comes to audits.
PAAS Tips:
How to Stay Prepared for an Invoice Audit
PAAS National® has seen invoice audits double in the last five years, a trend that has sparked widespread discussion from community pharmacy owners. Invoice audits are frequently categorized as “investigational” and used to identify pharmacies not purchasing from appropriate sources and/or potentially false (or phantom) claims. Auditors will act like an accountant by reviewing the claims submitted by a pharmacy over a certain timeframe and compare that to the purchases made during the same (or similar) timeframe, confirming that the pharmacy bought enough inventory to cover the claims that were submitted.
Invoice audits typically lead to the largest discrepancies…
Did you know there is much more to your audit assistance membership than just help with audits? The PAAS Member Portal contains a wealth of information and resources to assist you with audits and member service questions. Below is a list of 6 pages found on the Audit Assistance section of the PAAS Member Portal to assist you and your pharmacy staff to be proactive when it comes to audits.
PAAS Tips:
CGM Claims Under the Microscope
Audits from CMS through the Supplemental Medical Review Contractor (SMRC) are rolling in at high volume for continuous glucose monitors (CGMs), HCPCS E2103. The goal of SMRC is to help lower improper payment rates by conducting nationwide medical reviews of Medicaid, Medicare Part A/B, and DMEPOS claim to determine whether claims follow coverage, coding, payment, and billing requirements. Noridian is the current SMRC, therefore, the audit notices are co-branded with CMS and Noridian logos. The CGM claims currently under review are for the readers billed between November 12, 2023 and September 22, 2025. The pharmacy has until the printed deadline to reply to the audit request, which is typically 45 days from the date of the audit letter.
Audit requests for DMEPOS claims are often lengthy and overly wordy, leaving pharmacies to wonder “What do I need to send?!”
Did you know there is much more to your audit assistance membership than just help with audits? The PAAS Member Portal contains a wealth of information and resources to assist you with audits and member service questions. Below is a list of 6 pages found on the Audit Assistance section of the PAAS Member Portal to assist you and your pharmacy staff to be proactive when it comes to audits.
PAAS Tips:
Will Your DAW 1 Documentation PAAS an Audit?
PAAS National® audit analysts have the privilege of assisting pharmacies in all 50 states, DC, Puerto Rico and the Virgin Islands. With the DOJ expanding Health Care Fraud units, pharmacies should expect increased monitoring on Medicare and Medicaid programs targeting FWA, state law violations and program compliance.
If you haven’t…
Did you know there is much more to your audit assistance membership than just help with audits? The PAAS Member Portal contains a wealth of information and resources to assist you with audits and member service questions. Below is a list of 6 pages found on the Audit Assistance section of the PAAS Member Portal to assist you and your pharmacy staff to be proactive when it comes to audits.
PAAS Tips:
Ensuring Audit Success: Proof of Delivery for Mailed Prescriptions
PBM contracts require pharmacies to obtain evidence that demonstrates prescriptions were received by patients, ensuring claims are not falsely submitted for reimbursement. In community pharmacies, a patient typically signs a log when picking up their medication at the pharmacy (or upon delivery).
What happens if the prescription is mailed to the patient?
Did you know there is much more to your audit assistance membership than just help with audits? The PAAS Member Portal contains a wealth of information and resources to assist you with audits and member service questions. Below is a list of 6 pages found on the Audit Assistance section of the PAAS Member Portal to assist you and your pharmacy staff to be proactive when it comes to audits.
PAAS Tips:
Two Men Accused of $120M Medicare and Medicaid Fraud Using Vulnerable Adults
Last month, PAAS National® wrote about the record-setting $6.8 billion in False Claims Act recoveries in fiscal year 2025. With a continued and expanding focus on fraud enforcement, and strong recoveries in the health care and life sciences, expect an increase in cases the Department of Justice is investigating. In a recent case, two individuals from Queens, NY, were charged with defrauding Medicare and Medicaid by paying illegal kickbacks and bribes, and submitting claims for services that were never provided.
From 2016 to 2026, the two defendants used a pharmacy and two social adult day care centers, meant to help senior citizens, to fraudulently bill Medicare and Medicaid $120 million. The fraud started by luring Medicare patients with illegal cash payments and supermarket gift cards to induce them to fill prescriptions at the defendants’ pharmacy. The same type of illegal cash kickbacks were paid to Medicaid patients to enroll in the social adult day cares owned by the same men. The claims submitted to Medicaid for the day care services often exceeded the permitted capacity of the facilities.
Some of the healthcare fraud cases PAAS summarizes in our Newsline articles are brazen, extreme cases, but they can also serve as a good reminder to review how you are conducting business. For example, most pharmacies are not giving cash and gift cards to patients for filling prescriptions at their pharmacy, but routinely waiving copays can be another form of an illegal inducement under Anti-Kickback Statutes (and Civil Monetary Penalties Law) and implicate FCA violations.
PAAS Tips:
Prior Authorization Support: Strategies to Mitigate Audit Risks
Prior authorization (PA) requirements imposed by PBMs have become a major administrative barrier to medication access. To help reduce delays and improve patient outcomes, some pharmacies are assisting prescribers by submitting prior authorizations on their behalf. While these services can benefit patients and strengthen relationships between pharmacies and prescribers, they also introduce important compliance and insurance audit risks that pharmacies must consider.
When pharmacies participate in the PA process, they become directly involved in the documentation used to obtain insurance coverage approval and PBMs may question the integrity of materials due to potential conflicts of interests and rare instances of fraud.
It is important that dispensing pharmacies…
Did you know there is much more to your audit assistance membership than just help with audits? The PAAS Member Portal contains a wealth of information and resources to assist you with audits and member service questions. Below is a list of 6 pages found on the Audit Assistance section of the PAAS Member Portal to assist you and your pharmacy staff to be proactive when it comes to audits.
PAAS Tips:
DMEPOS Series #3: Nebulizer Solution Claims
Billing Medicare B is not easy. The Local Coverage Determinations (LCD) and associated Policy Articles (PA) for each DMEPOS category, along with the Standard Documentation Requirements for All Claims Submitted to DME MACs, are filled with billing and documentation guidelines which suppliers must fully comprehend and follow to avoid claim chargeback. The PAAS National® 2026 DMEPOS Newsline Series is a great starting point for pharmacies looking to enhance their comprehension of these unique requirements.
Pharmacies need to be prepared to show the following if audited on Nebulizer claims:
Did you know there is much more to your audit assistance membership than just help with audits? The PAAS Member Portal contains a wealth of information and resources to assist you with audits and member service questions. Below is a list of 6 pages found on the Audit Assistance section of the PAAS Member Portal to assist you and your pharmacy staff to be proactive when it comes to audits.
PAAS Tips:
Are You Meeting CMS Standards for LTC Pharmacy at Home?
Retail pharmacies exploring the option to provide long-term care pharmacy services at home must be aware of additional requirements that apply. In 2005, CMS provided guidance to Part D plans on requirements for performance and service criteria regarding pharmacies servicing LTC facilities. More recently, this guidance has been applicable to pharmacies servicing LTC Pharmacy at Home patients. The expectation from payors (particularly those that recognize/reimburse for it) is that these criteria are also applicable to pharmacies servicing qualified patients residing in their home, helping to ensure they receive the same level of care, medication management and safety oversight as those in long-term care facilities.
Expanding your pharmacy services is a great option to provide additional care for your current patients and potentially attract new ones. GPO and LTC contracts can result in enhanced dispensing fees and potential margin expansion compared to retail agreements. The enhanced dispensing fees, in part, are in recognition of the additional costs associated not only with providing special packaging and home delivery, but also ensuring the pharmacy is meeting these CMS defined performance and service criteria.
During audits, PAAS National® has seen OptumRx and Humana require pharmacies to…
Did you know there is much more to your audit assistance membership than just help with audits? The PAAS Member Portal contains a wealth of information and resources to assist you with audits and member service questions. Below is a list of 6 pages found on the Audit Assistance section of the PAAS Member Portal to assist you and your pharmacy staff to be proactive when it comes to audits.
PAAS Tips:
New DUR Codes Clarify Medicare Part B or D for Tetanus, Hepatitis A/B and Rabies Vaccines
Tetanus, Hepatitis A/B and Rabies vaccines may be covered by either Medicare Part B or Part D. Coverage typically depends on the vaccine’s purpose:
Did you know there is much more to your audit assistance membership than just help with audits? The PAAS Member Portal contains a wealth of information and resources to assist you with audits and member service questions. Below is a list of 6 pages found on the Audit Assistance section of the PAAS Member Portal to assist you and your pharmacy staff to be proactive when it comes to audits.
PAAS Tips: