Another excerpt from the FDA states:
A generic drug is the same as the brand-name drug in active ingredient, conditions of use, dosage form, strength, route of administration, and (with certain permissible differences) labeling. To obtain approval of a generic drug, a company must submit an Abbreviated New Drug Application (ANDA) to the FDA and prove that its product is the same as the brand-name drug in the ways described above, and that it is “bioequivalent,” meaning it gets to the part of the body where the drug works at the same time and in the same amount.
An authorized generic drug is the same as the brand-name drug but does not use the brand name on the label. Because an authorized generic drug is marketed under the brand name drug’s New Drug Application (NDA), it is not listed in FDA’s Approved Drug Products With Therapeutic Equivalence Evaluations (the Orange Book). An authorized generic is considered to be therapeutically equivalent to its brand-name drug because it is the same drug. This is true even if the brand-name drug is “single source,” meaning there are no ANDAs approved for that product, or coded as non-equivalent (e.g., BX) by FDA in the Orange Book
Q3: What DAW code do I need to submit when dispensing Ventolin®?
PAAS recommends that all prescriptions are transmitted with a default of DAW 0, unless the prescriber has indicated brand medically necessary (DAW 1) or the patient has requested the brand (DAW 2).
Q4: Can I substitute the Prasco albuterol HFA for Ventolin® when it has a “BX” therapeutic equivalence code?
Yes, as per Q2 above, authorized generics are “considered to be therapeutically equivalent to its brand-name drug because it is the same drug.” Since there are no ANDA generics available, the brand inhalers are still considered “single-source” and retain the BX codes.
Q5: What if the payer prefers the brand name inhaler?
PBMs may continue to prefer the brand name inhalers due to formulary/rebate agreements as the price drop for an authorized generic is often minimal. It is not until multiple ANDA generics enter the marketplace that this competition brings the price down to a point where it is cheaper to cover the generic. Payers may reject claims for “generic” (authorized or ANDA) at point-of-sale and provide messaging that they prefer brand. You may need to bill the brand NDC with DAW 0, DAW 9 or follow online claim messages. See March 2019 article What DAW Code Do I Bill on a Brand Product? for additional discussion.
Here are some details about recent authorized generic and ANDA generic launches.
Albuterol Inhalers
Since there are no ANDA generics available, the albuterol inhalers are still considered “single-source” and have BX ratings. Note that the authorized generic has the same FDA application number as the referenced brand product.
| Product |
NDC |
Labeler |
Package Size |
FDA Application Number |
TE Code |
| Ventolin® HFA |
00173-0682-20 |
Merck |
18 GM |
N020983 |
BX |
| Albuterol sulfate HFA |
66993-0019-68 |
Prasco |
18 GM |
N020983 |
BX |
| ProAir® HFA |
59310-0579-22 |
Teva |
8.5 GM |
N021457 |
BX |
| Albuterol sulfate HFA |
00093-3174-31 |
Teva/Mylan |
8.5 GM |
N021457 |
BX |
| ProVentil® HFA |
00085-1132-04 |
Merck |
6.7 GM |
N020503 |
BX |
Advair Diskus®
Additionally, there have been recent Authorized and ANDA generic launches of Advair Diskus® this year. Since there is an ANDA generic available, Advair is now considered “multi-source” and has an AB rating.
- ANDA generic WixelaTM InhubTM (made by Mylan) was approved on January 30, 2019
- Authorized generic (distributed by Prasco) was released February 8, 2019
See examples for the 100 mcg/50 mcg strength below:
| Product |
NDC |
Labeler |
FDA Application Number |
Source |
TE Code |
| Advair Diskus® |
00173-0695-00 |
GSK |
N021077 |
Brand |
AB |
| fluticasone-salmeterol |
66993-0584-97 |
Prasco |
N021077 |
Authorized Generic |
AB |
| WixelaTM InhubTM |
00378-0932-32 |
Mylan |
A208891 |
ANDA Generic |
AB |
OptumRx/SCIO Targeting Part B Drugs & Supplies
In the most recent round of OptumRx/SCIO desk audits, PAAS is seeing audits for test strips, insulin used in a pump, nebulizer solutions, immunosuppressants, chemotherapy medications, and vaccines. If the patient is Medicare-eligible and meets Medicare requirements, these claims should be billed to Medicare Part B. If the pharmacy is processing under a Medicare Advantage plan (Part C), they are required to cover everything that is covered by Part A, B and sometimes D. Some plans require that all drugs and supplies be billed to the prescription benefit and they will process them under either B or D as appropriate. Other plans may require that you bill Part B drugs and supplies to the medical benefit and only Part D to the prescription benefit.
Why do these potential Medicare B claims go through the Part D plan at the point of sale?
PAAS Tips:
Caremark Strictly Enforces Coupon Policy
Caremark Strictly Enforces Coupon Policy
CVS Caremark first updated their policy on the use of manufacturer coupons in May of 2017 and again in September of 2018. Pharmacies continue to suffer full recoupment of claims that were processed to coupons and copay cards in violation of Caremark’s policy. Caremark considers violations to be inappropriate waivers of patient pay amounts, and could result in additional sanctions, including termination.
As defined in the current Provider Manual: “Pharmaceutical Manufacturer Coupon” means any item or mechanism, including but not limited to, paper coupons, copay cards, e-vouchers, mail-in rebates, and electronic coupon codes funded by a manufacturer, repackager, or supplier of pharmaceutical, chemical, or compounding products, that reduces the portion of the Patient Pay Amount that an Eligible Person is required to pay for a Covered Item.
Caremark prohibits the use of any coupon for:
Note: First DataBank (FDB) recently updated their database to list dietary supplements differently than approved drug products.
With USP <795> and <797> on Hiatus, Time to Focus on USP <800>
On September 23rd, USP announced they were postponing the official dates of the revised General Chapters <795> and <797> (and <825> – radiopharmaceuticals). Stakeholders submitted appeals and have now requested further review by an appointed panel. In question are Beyond Use Dating requirements and Alternate Technology Provisions. According to the USP Bylaws, the panel will meet within 90 days. If the standard is upheld, the date for conformance will be reestablished with at least a six-month notice.
USP <800> is not subject to any pending appeals and will become official December 1st, 2019. Many facets of USP <800> are intertwined with compounding (<795>/<797>), so the General Chapter will be considered informational and not compendially applicable at this time.
With rare exception, all pharmacies will be responsible for meeting USP standards in General Chapter <800> Hazardous Drugs – Handling in the Healthcare Settings. If your pharmacy plans to prepare compounded prescriptions with Hazardous Drugs (HDs), then you must comply with all elements of the standard, including the extensive containment requirements. If your pharmacy does not plan to compound with HDs but has HDs in inventory (as all traditional pharmacies do), then your responsibilities are greatly reduced, but there are still aspects of USP <800> you must comply with.
USP developed General Chapter <800> to address a public health need to protect healthcare personnel from HDs. Both acute and chronic health issues can arise from improper handling or exposure to HDs. HD handling is not new. The National Institute of Occupational Safety and Health (NIOSH) first published a list of HDs in 2004 and the Occupational Safety and Health Administration (OSHA) first published guidelines for HD handling in 1986 (originally only cytotoxic [antineoplastic] drugs).
Various states have adopted USP <800> into law as they feel it’s the best practice to prevent employee, and public, harm. However, regardless of whether a state has specifically enacted USP <800>, all pharmacies should have robust policies and procedures to handle HDs. OSHA was established to ensure safe and healthful working conditions by setting and enforcing standards and by providing training, outreach, education and assistance.
The following statement was taken from OSHA’s website regarding HDs:
“Institutions should have formal written programs to manage hazards. Such programs should include training, exposure assessment, emergency procedures for spills, policies for managing staff with reproductive concerns, and most importantly, ways to ensure that the institution is adhering to critical national standards.
Although OSHA has no explicit standard, USP 800 focuses explicitly on protecting workers from exposures to hazardous drugs. It, and USP 797, represent professionally expected requirements in healthcare that incorporate national consensus standards on infrastructure maintenance (ASTM).”
OSHA also makes available guidance on Controlling Occupational Exposure to Hazardous Drugs. They have the authority, and resources, to enforce USP <800> for the welfare and safety of pharmacy employees.
PAAS Tips:
Disputing Humana’s Bogus $5 Administrative Fees
By now, most pharmacies are probably aware of Humana’s $5 administrative fees to correct, what other plans consider, educational discrepancies. We commonly see these fees assessed for incorrect prescriber (for legend drugs), invalid days’ supply, and incorrect origin code. State audit laws have been ineffective at protecting pharmacies from these clerical errors as Humana classifies these takebacks as “Administrative Fees”, not recoupments on the initial claim.
What should your pharmacy do when assessed a $5 fee?Join today!
First, check the claims to make sure Humana is valid in their assertion. PAAS has recently seen numerous audit results where the auditor made a mistake on days’ supply, which was subsequently overturned. Auditors are not immune to mistakes with origin codes or prescribers, either.
- Invalid Days’ Supply: Check the math to make sure the auditor did not make a mistake.
- Wrong Origin Code: Double check the origin code that you billed. Does Humana’s assessment make sense?
- Incorrect Doctor: Check the NPI billed. Is your system set up to correctly link the doctor’s name with their NPI?
- If you find a mistake, use the Humana Corrected Values Form (CVF) to appeal the fee. This CVF should have been included with the result materials.
Reviewing these fees are easy to do and should not be overlooked on appeal. These fees apply to the original fill and all refills, so a prescription with 12 fills can have $60 in fees. These fees are in addition to any discrepancy Humana may be assessing on a claim; which could lead to > 100% recoupment! PAAS recommends you dispute all recoupments, big or small.
PAAS Tips:
Remember to send your results to PAAS to have the best chance during appeal!
Split Billing Opioid Prescriptions
PAAS has received numerous questions related to split-billing opioid prescriptions to insurance and cash. The current state of the opioid crisis has made these claims targets for audit recovery and DEA scrutiny.
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against split billing or processing a claim as cash to circumvent a plan limit or prior authorization requirement. Most limits are based on appropriate clinical use. Bypassing these edits for opioids can lead to overdoses, diversion, and even death. Especially for controlled substances, pharmacists have a corresponding responsibility to ensure that prescriptions are for a legitimate medical purpose 21 CFR 1306.04(a).
- PBMs will monitor and flag claims that are rejected for plan limits and reprocessed with changed quantity and/or days’ supply
- Claims will be recovered in full if billed with the wrong days’ supply and exceed plan limits
- For example, Oxycontin 30 mg #90 1 po TID, plan limit 2/day: billing #60 as 30 days’ supply is incorrect for TID dosing and will likely be recovered in full
- PBMs may have access to state prescription drug monitoring programs (PDMPs) to look for cash claims
- Charging the patient cash can be considered non-compliance with the provider manual and could lead to remediation, including potential network termination
- If you have exhausted all plan options and the patient insists on paying cash for the full prescription, be sure that you document authorization from the patient that they are willing to pay the full cost and will not seek reimbursement from the insurance. This may protect you from accusations of non-compliance.
- Multiple transactions on the PDMP may raise red-flags for state and DEA agents as a possible diversion
- Always call for an override or prior authorization. Most edits can be overridden with appropriate clinical documentation
- Obtaining prior authorization can often resolve the problem for six months to a year
- Prescribers that are unwilling to obtain prior authorization or to change the prescription to a clinically appropriate dose may be a red-flag for diversion
- Don’t be afraid to enlist the patient’s help. Having them file a complaint with their insurance can help expediate the PA approval process.
PAAS Tips:
Prime Recovering Claims on Drug Substitutions
PAAS has seen Prime Therapeutics recover claims for the following reasons:
Inappropriate Billing Practices are discussed in the Prime Provider Manual, Section 2 and Unacceptable Billing Practices are found in Section 6. Here are a few examples:
PAAS Tips:
Pharmacist Sentenced to 10 Years in Prison for Fraud Scheme
Ademola Adebayo was convicted on January 11th, 2019 of conspiracy to commit health care fraud, wire fraud and money laundering. His sentence included 120 months (10 years) in prison followed by three years of supervised release and an order to pay $3.2 million in restitution and $1.4 million in forfeiture.
Adebayo was involved in a $121 million-dollar scheme that submitted false and fraudulent claims to Medicare, TRICARE, and private insurance companies. The claims involved compounded pain and scar creams, as well as other prescription medications that were either not medically necessary, never provided or both.
Adebayo was originally the pharmacist at A to Z Pharmacy in New Port Richey, FL. When the fraud was discovered in 2014 and plan contracts terminated with A to Z Pharmacy, Adebayo became a straw owner of Havana Pharmacy & Discount in Miami, which was used to continue the fraud scheme.
Eight other defendants have also been convicted. Others involved in the scheme admitted to paying kickbacks for prescriptions (and patient information) and physicians signing prescriptions for patients they never saw. All were sentenced to prison from one to fifteen years.
PAAS reminds pharmacies to have comprehensive Fraud, Waste, & Abuse Compliance policies and training. Contact PAAS today for more information on our customized Fraud, Waste, & Abuse and HIPAA Compliance Program at (608) 873-1342 or info@paasnational.com.
Test Claims are Prohibited and Put Pharmacies at Risk
Pharmacies may receive requests to determine if a specific medication is covered on formulary or what the copay will be in the absence of an actual prescription. While this may seem like a harmless request, “test claims” are generally prohibited by third-party payers. If your pharmacy submits a claim to insurance without a prescription, a PBM could cite this as a false claim or even fraud.
Payer concerns with test claims include:
PAAS Tips:
PBM audits for rejected or reversed claims are uncommon but may put your pharmacy at risk.
Authorized Generic vs. ANDA Generic
Since the recent launch of authorized generic albuterol inhalers, PAAS has received numerous requests for clarifications on substitution, therapeutic equivalence codes and DAW codes. PAAS Audit Assistance members can see our January 2019 article Generic Albuterol HFA Inhalers for additional background.
Q1: Is an Authorized Generic drug the same thing as a generic drug?
The FDA has a complete explanation on its website, here is an excerpt:
“No. The term “authorized generic” drug is most commonly used to describe an approved brand name drug that is marketed without the brand name on its label. Other than the fact that it does not have the brand name on its label, it is the exact same drug product as the branded product.”
Q2: How Is an Authorized Generic Drug Different from what Is Commonly Understood to Be a Generic Drug?
A generic drug is the same as the brand-name drug in active ingredient, conditions of use, dosage form, strength, route of administration, and (with certain permissible differences) labeling. To obtain approval of a generic drug, a company must submit an Abbreviated New Drug Application (ANDA) to the FDA and prove that its product is the same as the brand-name drug in the ways described above, and that it is “bioequivalent,” meaning it gets to the part of the body where the drug works at the same time and in the same amount.
An authorized generic drug is the same as the brand-name drug but does not use the brand name on the label. Because an authorized generic drug is marketed under the brand name drug’s New Drug Application (NDA), it is not listed in FDA’s Approved Drug Products With Therapeutic Equivalence Evaluations (the Orange Book). An authorized generic is considered to be therapeutically equivalent to its brand-name drug because it is the same drug. This is true even if the brand-name drug is “single source,” meaning there are no ANDAs approved for that product, or coded as non-equivalent (e.g., BX) by FDA in the Orange Book
Q3: What DAW code do I need to submit when dispensing Ventolin®?
PAAS recommends that all prescriptions are transmitted with a default of DAW 0, unless the prescriber has indicated brand medically necessary (DAW 1) or the patient has requested the brand (DAW 2).
Q4: Can I substitute the Prasco albuterol HFA for Ventolin® when it has a “BX” therapeutic equivalence code?
Yes, as per Q2 above, authorized generics are “considered to be therapeutically equivalent to its brand-name drug because it is the same drug.” Since there are no ANDA generics available, the brand inhalers are still considered “single-source” and retain the BX codes.
Q5: What if the payer prefers the brand name inhaler?
PBMs may continue to prefer the brand name inhalers due to formulary/rebate agreements as the price drop for an authorized generic is often minimal. It is not until multiple ANDA generics enter the marketplace that this competition brings the price down to a point where it is cheaper to cover the generic. Payers may reject claims for “generic” (authorized or ANDA) at point-of-sale and provide messaging that they prefer brand. You may need to bill the brand NDC with DAW 0, DAW 9 or follow online claim messages. See March 2019 article What DAW Code Do I Bill on a Brand Product? for additional discussion.
Here are some details about recent authorized generic and ANDA generic launches.
Albuterol Inhalers
Since there are no ANDA generics available, the albuterol inhalers are still considered “single-source” and have BX ratings. Note that the authorized generic has the same FDA application number as the referenced brand product.
Advair Diskus®
Additionally, there have been recent Authorized and ANDA generic launches of Advair Diskus® this year. Since there is an ANDA generic available, Advair is now considered “multi-source” and has an AB rating.
See examples for the 100 mcg/50 mcg strength below:
Patient Copay Collection, and Documentation, is a MUST
Copayments are used by insurers to sensitize patients to the cost of their medications and give patients financial incentives to reject medications that are not medically necessary or add little to no value to patients’ treatments.
Third Party contracts obligate pharmacies to collect patient copayments in full; however, merely collecting copayments upon dispensing is not nearly enough. You must also be able to show proof of copay collection. PAAS continues to see pharmacies struggle with copay collection documentation due to inferior Point of Sale systems, poor record keeping, and banking relationships.
In order to show proof of copay collection, PBMs may ask for: front and back copies of canceled checks, bank deposits, and even Credit Card Merchant Account Reporting, including evidence of settlement and payment through bank records.
Stop and think for a moment about how you would prove copay collection.
Patients paying with cash also create record keeping headaches. Being able to show the copay receivables for a given time period, and the corresponding bank deposits can be challenging. How often do you make deposits? Do you ever pull money out of the till to pay vendors where amounts wouldn’t reconcile?
House charge accounts add another layer of complexity for pharmacies. Developing a robust policy and procedure on billing, collection, record keeping, and management of accounts is an absolute necessity to prevent issues. When payments are received, are you using a tick and tie accounting practice, or applying payments to the oldest outstanding balance? How do you handle payments that only cover a partial copay? See our November 2018 Newsline article: Beware If You Offer Patient or House Charge Accounts for additional guidance.
Be wary of copay collection schemes and artifices. Some pharmacies have tried to ‘bury’ the copay in the reimbursement for compounded prescriptions (e.g. with pain and scar creams). They create house charge accounts with no intent to collect outstanding balances, thereby waiving the copay.
Pharmacies may claim that patients are indigent and unable to pay and in the case of Medicaid, this is an acceptable practice. However, for other insurers, you must have a formal, written policy to address a potential hardship waiver. This includes having patients apply for a waiver, tax return documentation collected by the pharmacy to show proof of need, and a host of other requirements.
As a reminder, manufacturer copay discount cards cannot be used with Medicare, Medicaid, and TRICARE patients. Many PBMs have additional restrictions on what manufacturer copay cards they will allow pharmacies to use.
Financial recoupment on claims where you cannot show proof of copay collection should be the least of your worries. Network termination may ensue, and the pharmacy risks a Fraud, Waste, and Abuse investigation and charges stemming from the False Claims Act. Copay collection is not worth putting your license, and pharmacy, at risk!