PAAS National® analysts have repeatedly seen auditors targeting claims with potentially undocumented substitution issues. They hope to find inappropriate substitutions which may result in recoupment of the claim. To decrease the risk of these recoupments, and better understand where the issue stems, let’s start with a bit of background information.
Since 1938, when a company seeks authorization for a new (non-biologic) drug, they must compile enough evidence for the U.S. Food and Drug Administration (FDA) to determine if the product will be approved for sale in the United States—this packet of information is referred to as the New Drug Application (NDA). Generally, the drug with the NDA becomes the reference listed drug (RLD, or brand-name) product. The RLD is what other companies’ reference when seeking approval for their equivalent product (or generic) through the Abbreviated New Drug Application (ANDA). The ANDA must provide the FDA with evidence that the product is equivalent to the FDA-identified RLD and must show in vivo bioequivalence to the reference standard (RS) drug product. The FDA usually selects one RS and generally it is the RLD, but in some cases they are different. If the FDA has enough evidence to establish equivalency, when the ANDA generic is approved, it will be given an “AB” rating. Each ANDA must list a single RLD to which it is being compared and if the FDA did not set the RLD, an ANDA applicant must ask the Office of Generic Drugs to designate one. When different RLDs are utilized for the same drug product of the same strength by different companies on their ANDA, it creates the need for a three-character Therapeutic Equivalency (TE) code (e.g., AB1, AB2, AB3, etc.). Only drug products with the same three-character TE code which are listed under the same active ingredient heading can be freely substituted for each other, plus the authorized generic, unless prohibited by state regulation. Be aware that authorized generics do not appear in the Orange Book and are not evaluated by the FDA for an equivalency rating because they are the same products as their RLD, or brand-name drug, however, they do not use the brand name.
If, at this time, the FDA considers a product to not be therapeutically equivalent, it will assign it a “B” rating. Claims at risk for recoupment include those where the prescription was issued for a specific RLD (brand-name) but filled with a non-matching TE code product or those filled with a B-rated product. The FDA Orange Book can be accessed online and may be utilized to confirm equivalency for non-biologic drug products to prevent these recoupments.
Anyone unfamiliar with the Orange Book can read the Preface which contains very detailed explanations of how to use the book as well as the meaning of each code. Included is an example of the three-character TE code system using nifedipine. Adalat® CC and Procardia XL® extended-release tablets are both listed under the same active ingredient (nifedipine) heading. Adalat® CC is designated AB1 and Procardia XL® AB2. ANDA generics approved with Adalat® CC listed as the RLD would receive an AB1 rating, and those approved with the RLD Procardia XL®, AB2. To substitute an AB1-coded generic nifedipine extended-release tablet for Procardia XL® without contacting the prescriber would be inappropriate and the claim could face recoupment if audited.
Based on the observations of PAAS analysts, the following table contains the most common products incorrectly substituted with non-AB rated products, and subsequently flagged upon audit:
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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.
- Access Services
- Audit Documentation Submission Guidance
- An online form to submit safe filling and billing questions
- Your PAAS Membership Manual
- Newsline
- Monthly newsletter articles, written by our expert PAAS analyst team, provide safe filling and billing tips and relays relevant/current PBM trends to be help prevent audits
- Search the Newsline Archive to get PAAS tips at the click of a button
- Special Edition Newslines including: Top 10 articles of the prior year, DMEPOS Article Series and a Self-Audit Article Series
- Ability to print monthly issues or individual articles
- Proactive Tips
- Audit flags – list of various claim attributes the PBMs use to select claims for audit
- Billing insulin vials – flowchart to assist whether you should bill Medicare Part B vs Part D
- DAW Codes Explained – use to understand when to effectively use DAW codes, their definitions and why claims may be flagged for audit if a DAW code is used incorrectly
- Basic DMEPOS documentation guidance
- Onsite Credentialing Checklist and expanded definitions of policies and procedures
- Proof of refill request and affirmative response form for DMEPOS items
- Steps on how to prepare for an onsite audit
- And more!
- Days’ Supply Charts
- Utilize the days’ supply charts for inhalers, insulins, nasal sprays, eye drops and topicals to aid you in calculating the correct days’ supply
- Guidance on overbilled quantities and incorrect days’ supply account for a sizable portion of audit chargebacks
- Additional miscellaneous charts, which include: Dispense in Original Container and Return to Stock
- Forms
- Signature Logbook for print
- Signature Trifold Mailer
- Fax and Email Coversheet
- Patient Attestation for over-the-counter COVID-19 test kits
- On-Demand Webinars
- Short webinars on hot topics in the PBM industry. Here are a few examples:
- USP 800 Compliance
- Cultural Competency Training
- Dispensing Prescriptions Off-Label
- Biologic Medications and Interchangeability
- Continuous Glucose Monitor Requirements for Medicare Part B
PAAS Tips:
- MORE AUDITS, MORE INSIGHT – PAAS National® is the industry-leading defender of community pharmacy dealings with Prescription Benefit Programs, including Caremark, Express Scripts, Humana, Medicaid, OptumRx, Prime Therapeutics., and more. PAAS assists on all third-party audits, including: desktop audits, onsite audits, invoice audits, OIG/Medicaid audits, Medicare B audits. The PAAS team is dedicated to helping you! We have five pharmacists and a complement of technician analysts with over 50 years of dedicated audit assistance experience. PAAS continuously updates their database with every audit received — in fact, we even keep a scorecard on individual auditors.
- Get answers to your questions on days’ supply calculations, drug substitutions, billing practices, required documentation, prior authorization requirements, record retention, and internal audit procedures – just to name a few. As a trusted partner, we will provide tailored guidance to help you proactively prevent audits. Remember, the prescription claims you submit today are the audits of the future.
- Keep your employees engaged and help lower audit risk by adding all employees to the portal and giving them permission to access these tools, resources and eNewsline. For more information review September 2019 Newsline article, What Are You Waiting For? Make Sure ALL of Your Employees are Added to the PAAS Portal!
- Contact PAAS at (608) 873-1342, if you would like a tour of your PAAS Member Portal, so you can reap all the benefits of your PAAS Audit Assistance. We appreciate you being a member.
Transfer Prescriptions Continue to Be Targeted
Transferred prescriptions remain a common audit target, and pharmacies are facing recoupments due to missing information. Without having all required elements set in place by your state’s Board of Pharmacy, these claims are at risk of full recoupment by PBMs. Transferred prescriptions are easily identified and audited by the PBM due to the origin code.
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:
Self-Audit Series #12: Invoice Audits
PBMs have dramatically increased the number of invoice audits conducted and some pharmacies continue to be at risk for significant financial recoupments and contract terminations. It is not uncommon for invoice audit results to exceed six figures. To reduce the risk of your pharmacy having problems during a PBM invoice audit, consider performing a mock audit on your practice. The PBM is simply comparing the “ins” and “outs” of your pharmacy inventory for a specific period. If your “ins” are less than your “outs” for the PBM auditing, they conclude you have a shortage and will initiate recoupment. The “ins” are your acquisitions, or purchases, from wholesalers, manufacturers, trade shows or other pharmacies (note: there is no accounting for inventory on-hand). The “outs” are the claims that you billed to the PBM conducting the audit as well as any returns. The PBM already has the billed claims for the defined window, so when they initiate the invoice audit, they’re typically just in need of your purchasing history. Several PBMs, including OptumRx®, Elixir®, and Express Scripts® may even require the pharmacy to submit a full dispensing history for further reconciliation. Follow the tips below to reduce the risk of your pharmacy having problems during a PBM invoice audit.
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:
Common Claim Denials for Medicare Part B
In the PAAS National® August 2019 Newsline article, Medicare Part B/DMEPOS Audits – Who are All These Contractors?, we explained that Medicare and Medicaid use a number of audit contractors to perform medical review audits on pharmacies. The three main contractors PAAS sees carrying out these audits are: DME Medicare Administrative Contractors (MACs), Recovery Audit Contractors (RACs) and Supplemental Medical Review Contractors (SMRCs).
Many of the denied claims are due to not meeting medical necessity, frequency limitations, lacking supporting medical records and even basic coding mistakes. See PAAS Tips for links on billing specific DMEPOS items and required documentation for Medicare Part B 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:
Manipulating Quantity or Days’ Supply to Bypass Plan Limits Will Cost You
Plan limit rejections are intended to help control costs, provide clinical edits, and assist pharmacies in ensuring patient safety. When an initial claim adjudication is rejected for exceeding plan limits (e.g., Max Quantity Limit or Quantity vs Time Limit), pharmacies need to proceed with caution. An order entry technician that subsequently rebills for a different quantity [and same days’ supply] or the same quantity [and different days’ supply] than originally submitted, is asking for that prescription to be audited. PBM analytics assume the original adjudication was submitted and rejected [accurately] and when a subsequent claim [typically within seconds] has an altered quantity or days’ supply, it’s suspected that the manipulation was done [inappropriately] to get a paid claim. How should pharmacies proceed?
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:
Bill It Right: V-Go® Insulin Delivery Device and Rapid Acting Insulin Vials
The Valeritas V-Go® Insulin Delivery Device (V-Go®), a disposable insulin delivery device, can be challenging to bill properly. Filling an order for V-Go® requires two separate prescriptions – the V-Go® delivery device and the rapid-acting insulin to be used within the V-Go® system.
Each box of V-Go® contains 30 single-use devices, each to be used over a 24-hour period and subsequently disposed of. Therefore, a single box should be billed as “30 each” for a 30-day supply. Due to the device being single-use only, it does not meet the Medicare Part B DME requirement of ability for repeated use and therefore should be billed as part of a patient’s Medicare Part D plan. V-Go® is a basal-bolus insulin delivery device, meaning it is able to deliver both a continuous basal level of insulin over a 24-hour period in addition to bolus dosing for meals. It comes in three dosing selections based off the basal level of insulin the patient requires – 20 units/24 hours (V-Go® 20), 30 units/24 hours (V-Go® 30), and 40 units/24 hours (V-Go® 40) – plus a maximum of an additional 36 units to be used for bolus dosing, dosed in 2-unit increments. In addition, the manufacturer requires each V-Go® be filled to capacity and after 24 hours what insulin is left in the device must be disposed of. Due to the maximum amount of units each device can hold and the inability to salvage any leftover insulin in the V-Go® delivery system after 24 hours, it calls for the prescriber to meticulously determine which V-Go® device is most appropriate for 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:
Top Medications Flagged for Unauthorized Substitutions
PAAS National® analysts have repeatedly seen auditors targeting claims with potentially undocumented substitution issues. They hope to find inappropriate substitutions which may result in recoupment of the claim. To decrease the risk of these recoupments, and better understand where the issue stems, let’s start with a bit of background information.
Since 1938, when a company seeks authorization for a new (non-biologic) drug, they must compile enough evidence for the U.S. Food and Drug Administration (FDA) to determine if the product will be approved for sale in the United States—this packet of information is referred to as the New Drug Application (NDA). Generally, the drug with the NDA becomes the reference listed drug (RLD, or brand-name) product. The RLD is what other companies’ reference when seeking approval for their equivalent product (or generic) through the Abbreviated New Drug Application (ANDA). The ANDA must provide the FDA with evidence that the product is equivalent to the FDA-identified RLD and must show in vivo bioequivalence to the reference standard (RS) drug product. The FDA usually selects one RS and generally it is the RLD, but in some cases they are different. If the FDA has enough evidence to establish equivalency, when the ANDA generic is approved, it will be given an “AB” rating. Each ANDA must list a single RLD to which it is being compared and if the FDA did not set the RLD, an ANDA applicant must ask the Office of Generic Drugs to designate one. When different RLDs are utilized for the same drug product of the same strength by different companies on their ANDA, it creates the need for a three-character Therapeutic Equivalency (TE) code (e.g., AB1, AB2, AB3, etc.). Only drug products with the same three-character TE code which are listed under the same active ingredient heading can be freely substituted for each other, plus the authorized generic, unless prohibited by state regulation. Be aware that authorized generics do not appear in the Orange Book and are not evaluated by the FDA for an equivalency rating because they are the same products as their RLD, or brand-name drug, however, they do not use the brand name.
If, at this time, the FDA considers a product to not be therapeutically equivalent, it will assign it a “B” rating. Claims at risk for recoupment include those where the prescription was issued for a specific RLD (brand-name) but filled with a non-matching TE code product or those filled with a B-rated product. The FDA Orange Book can be accessed online and may be utilized to confirm equivalency for non-biologic drug products to prevent these recoupments.
Anyone unfamiliar with the Orange Book can read the Preface which contains very detailed explanations of how to use the book as well as the meaning of each code. Included is an example of the three-character TE code system using nifedipine. Adalat® CC and Procardia XL® extended-release tablets are both listed under the same active ingredient (nifedipine) heading. Adalat® CC is designated AB1 and Procardia XL® AB2. ANDA generics approved with Adalat® CC listed as the RLD would receive an AB1 rating, and those approved with the RLD Procardia XL®, AB2. To substitute an AB1-coded generic nifedipine extended-release tablet for Procardia XL® without contacting the prescriber would be inappropriate and the claim could face recoupment if audited.
Based on the observations of PAAS analysts, the following table contains the most common products incorrectly substituted with non-AB rated products, and subsequently flagged upon audit:
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:
Would Your Spravato® Documentation PAAS an Audit?
Spravato® is a Schedule III controlled substance intranasal spray used in conjunction with an oral antidepressant for treatment-resistant depression in adults. It is part of the Risk Evaluation and Mitigation Strategy (REMS) Program and can only be dispensed and administered to patients in a REMS certified healthcare setting due to the risks of sedation, misuse, and abuse. PAAS National® alerted members in a February 2021 Newsline article How to Avoid Spravato® Audit Recoupments that we have seen attempted audit recoupments for Spravato® due to the pharmacy being unable to provide record of shipment received and dispensing information (including patient name, dose, number of devices, and date dispensed) per REMS guidelines. PBMs currently auditing Spravato® prescriptions include Elixir, MedImpact, Humana and Pharmacy Data Management, Inc. (PDMI.)
PAAS Tips:Join today!
- Access Services
- Audit Documentation Submission Guidance
- An online form to submit safe filling and billing questions
- Your PAAS Membership Manual
- Newsline
- Monthly newsletter articles, written by our expert PAAS analyst team, provide safe filling and billing tips and relays relevant/current PBM trends to be help prevent audits
- Search the Newsline Archive to get PAAS tips at the click of a button
- Special Edition Newslines including: Top 10 articles of the prior year, DMEPOS Article Series and a Self-Audit Article Series
- Ability to print monthly issues or individual articles
- Proactive Tips
- Audit flags – list of various claim attributes the PBMs use to select claims for audit
- Billing insulin vials – flowchart to assist whether you should bill Medicare Part B vs Part D
- DAW Codes Explained – use to understand when to effectively use DAW codes, their definitions and why claims may be flagged for audit if a DAW code is used incorrectly
- Basic DMEPOS documentation guidance
- Onsite Credentialing Checklist and expanded definitions of policies and procedures
- Proof of refill request and affirmative response form for DMEPOS items
- Steps on how to prepare for an onsite audit
- And more!
- Days’ Supply Charts
- Utilize the days’ supply charts for inhalers, insulins, nasal sprays, eye drops and topicals to aid you in calculating the correct days’ supply
- Guidance on overbilled quantities and incorrect days’ supply account for a sizable portion of audit chargebacks
- Additional miscellaneous charts, which include: Dispense in Original Container and Return to Stock
- Forms
- Signature Logbook for print
- Signature Trifold Mailer
- Fax and Email Coversheet
- Patient Attestation for over-the-counter COVID-19 test kits
- On-Demand Webinars
- Short webinars on hot topics in the PBM industry. Here are a few examples:
- USP 800 Compliance
- Cultural Competency Training
- Dispensing Prescriptions Off-Label
- Biologic Medications and Interchangeability
- Continuous Glucose Monitor Requirements for Medicare Part B
- MORE AUDITS, MORE INSIGHT – PAAS National® is the industry-leading defender of community pharmacy dealings with Prescription Benefit Programs, including Caremark, Express Scripts, Humana, Medicaid, OptumRx, Prime Therapeutics., and more. PAAS assists on all third-party audits, including: desktop audits, onsite audits, invoice audits, OIG/Medicaid audits, Medicare B audits. The PAAS team is dedicated to helping you! We have five pharmacists and a complement of technician analysts with over 50 years of dedicated audit assistance experience. PAAS continuously updates their database with every audit received — in fact, we even keep a scorecard on individual auditors.
- Get answers to your questions on days’ supply calculations, drug substitutions, billing practices, required documentation, prior authorization requirements, record retention, and internal audit procedures – just to name a few. As a trusted partner, we will provide tailored guidance to help you proactively prevent audits. Remember, the prescription claims you submit today are the audits of the future.
- Keep your employees engaged and help lower audit risk by adding all employees to the portal and giving them permission to access these tools, resources and eNewsline. For more information review September 2019 Newsline article, What Are You Waiting For? Make Sure ALL of Your Employees are Added to the PAAS Portal!
- Contact PAAS at (608) 873-1342, if you would like a tour of your PAAS Member Portal, so you can reap all the benefits of your PAAS Audit Assistance. We appreciate you being a member.
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:
Webinar: PBM FWA Trends and COVID-19 Vaccine Audit Risks
On November 18, 2021 PAAS National® hosted PBM FWA Trends and COVID-19 Vaccine Audit Risks webinar. PAAS Audit Assistance members have access to the recorded webinar, in addition to many other tools and resources on the PAAS Portal.
This webinar reviews:
Don’t Jump the Gun: Refill Too Soon Recoupments
Pharmacies know the importance of billing accurate days’ supply on prescriptions; however, there may be circumstances that can make this challenging. Medications that only come in one size or an unbreakable package may exceed what the patient will use during the plan limit timeframe. Claims dispensed for a plan limit, but the true day’s supply is greater, are an easy target for refilling too soon.
Pharmacies must be diligent in monitoring refills for claims submitted for a plan limit but will last the patient longer. The PBM only sees the days’ supply submitted on the claim. Once a prescription is audited, the directions for use will reveal the true days’ supply.
These claims are an easy target for audit as the PBM already received the initial/rejected claim days’ supply (suspected as the true days’ supply) and a subsequent claim with a shortened days’ supply (to meet plan limits). Based on this information, the PBM will audit subsequent refill too soon occurrences with a high margin of success.
Examples of prescriptions that pharmacies may need to dispense over the plan limit
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:
Beware: Same Ingredients, Different FDA Indications
Ozempic® is an injectable diabetic medicine used to improve glycemic control in adults for type 2 diabetes management. Please see our May 2021 Newsline New Package Size Available for Ozempic® for reference on how to bill for Ozempic®. On June 4, 2021, the FDA approved a new drug treatment for chronic weight management called Wegovy™ which has the exact same ingredient – semaglutide.
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: