The first step is to make note of any reject messages received when processing for the correct days’ supply. For example, if the insurance limits the quantity to a 30 days’ supply, write “ILQ 30” on the prescription. Then reduce the quantity, if possible, and rebill the claim with the adjusted [accurate] days’ supply based on the revised quantity. Reduce the quantity further if the claim still rejects, until you reach the smallest unbreakable package size.
If the smallest unbreakable package size still does not go through with an accurate day’s supply:
- PBMs may provide claim reject messaging to prompt submission of “SCC 10” to allow the true day supply for accurate refill intervals, reimbursement and copays. Document use of this on the prescription.
- Call the PBM helpdesk and request an override – document on the prescription if approved or denied.
- If no smaller package size exists and PBM can’t (or won’t) issue an override, most PBMs will allow the smallest package to be billed for the maximum days’ supply identified in the original reject message.
If the above process is used, and you processed the claim with an adjusted [inaccurate] days’ supply, you are at risk for early refills because the PBM adjudication logic will allow you to submit a refill claim when the utilization threshold is met based on the previous days’ supply adjudicated, not the actual days’ supply. PBMs still require the pharmacy to monitor utilization and only refill when appropriate based off the accurate [calculated] days’ supply and not the adjudicated days’ supply. Remember, the claim rejection for “refill too soon” will not be appropriately triggered when the pharmacy is forced to bill a smaller days’ supply than the true calculated day’s supply. To help avoid this, PAAS National® suggests documenting the actual days’ supply in the directions for use (e.g., “actual days’ supply=37”) so that it prints on the label to alert staff and patients of the appropriate refill intervals.
Another situation pharmacies run into is when the accurate days’ supply is rejected due to exceeding the plan limit for a maximum daily dose.
For example, a prescription written for OxyContin® 30 mg, quantity 90, with directions to “take one tablet 3x daily” may receive a rejection for “Maximum two tablets per day.”
In this situation, pharmacies should not reduce the quantity to 60 tablets for a 30-day supply (this would be considered bypassing the plan limit). Instead, pharmacies should pay close attention to any messages given on how to resolve the rejection, including calling the PBM help desk for an override or getting a prior authorization started with the prescriber. Alternatively, the prescriber could decide to change the dose or prescribe an alternative medication.
What if the prescriber refuses to obtain a prior authorization or change the prescription to a clinically appropriate dose? Can the claim be split-billed? PAAS National® highly recommends against split billing or processing a claim as cash to circumvent a plan limit or prior authorization requirement. A doctor who refuses to obtain a prior authorization or change the medication/dose could be a red flag for diversion with controlled substances. Most plan limits are put in place based on appropriate clinical use and bypassing them can lead to easy recoupments for PBMs. Pharmacists have a corresponding responsibility to ensure that prescriptions are for legitimate medical purposes, especially for controlled substances.
PAAS Tips:
- Always bill an accurate days’ supply based on the directions first; many PBMS have overrides in place for the smallest package sizes
- Only follow the ILQ process above if you are dispensing the smallest unbreakable package size
- Billing a 30-day supply on two boxes of insulin that should last 50 days is not appropriate. Instead, you must resubmit one box for 25 days if the plan limit is 30 days
- Include a notation on the patient label to help notify patients and pharmacy staff of the true days’ supply
- Check with your software vendor to see if additional days’ supply fields are available for internal tracking
- Avoid med sync or cycle fill programs for products whose correct days’ supply cannot be submitted for the smallest single package size
- Educate all pharmacy staff to identify rejection messages and how to properly resolve them
- Any DUR verifications, especially if using “M0” (prescriber consulted) to override the DUR, should have supporting documentation on the prescription or within retrievable electronic records
- Do not split bill rejected claims
- Charging the patient cash often leads to complaints [from the patient to an employer or PBM] and can be considered non-compliance with the provider manual and lead to remediation, including potential network termination
- If you have exhausted all plan options (including pursuing PAs and/or alternative therapies) and the patient insists on paying cash for the full prescription, be sure that you document authorization from the patient that they desire to pay the full cost and will not seek reimbursement from the insurance.
- Review our Can You Bill It As 30 Days? document under Proactive Tips on the Member Portal
Walgreens $107 Million Settlement for False Claims Act Violations
A recent Department of Justice press release outlined a settlement with Walgreens for nearly $107 million for False Claims Act violations related to claims billed to government programs that were never dispensed. The government alleges that from 2009-2020, Walgreens restocked thousands of prescriptions billed to Medicare and Medicaid and resold the same medication, effectively collecting payment twice on the same medications.
The underlying cause of the systematic overbilling was related to a feature in Walgreens’ pharmacy management software (Intercom Plus, IC+) where prescriptions which were billed but not sold were removed from the local IC+ servers after 29 days (to save space) and moved into an “Unaccounted-For Status” on the central IC+ server. Pharmacists in the stores could no longer see these prescriptions in the local IC+ work queue and there was no back-end process to reverse the paid claims that were moved into the Unaccounted-For Status. Essentially thousands of billed prescriptions “got lost” and Walgreens received payment for items never dispensed.
In January 2020, Walgreens self-disclosed the systematic error, began to implement corrective actions to resolve the problem, and fully cooperated with the government to settle the overpayments.
Two separate qui tam relators brought this systemic problem to the government’s attention and will receive $14.9 and $1.6 million dollars, respectively.
PAAS Tips:
Download PAAS’ Return to Stock Chart for detail on PBM specific requirements
FDA Proposed Guidance for Biosimilar Updates
Over the last 10 years, biologics have transformed the treatment of many illnesses like chronic bowel disease, kidney disease, arthritis and cancer and they are the fastest growing class of medications in the United States. The FDA has gained valuable scientific information in reviewing both biosimilar and interchangeable biosimilar medications. They both meet the same high FDA standards and are as safe and effective as the reference product. When the FDA designates a biosimilar product as “interchangeable,” a pharmacist may substitute that product for a biologic without contacting the physician (predicated on state law). This pharmacy-level substitution provides increased access to treatments and cost savings for patients.
However, many pharmacies struggle to understand which biosimilar products can be substituted for the reference product. Consider the following definitions from the FDA:
Newly proposed FDA guidance may alleviate this confusion of biosimilar interchangeability.
On June 20, 2024, the FDA issued a draft guidance for industry Considerations for Demonstrating Interchangeability With a Reference Product: Update. The recommendations in the draft guidance would provide clarity and transparency regarding the FDA’s review and approval process for biosimilars.
The draft guidance eliminates the requirement that biosimilars produce clinical data to show they are interchangeable with their reference product. These clinical trials (switching studies) add time and expense to the development of a biosimilar and delay them from reaching patients.
This update would allow manufacturers who are interested in obtaining a Biologic License Application (BLA) for a biosimilar with a review for interchangeability status to either:
Companies with pending BLAs can also submit an amendment to their application including the above information.
While biologic substitution is regulated at the state level, the FDA could broadly increase the number of biologics categorized as interchangeable biosimilars with this draft guidance, making pharmacist driven substitutions more commonplace. PAAS will keep you informed as we await Final Guidance from the FDA.
Self-Audit Series #8: Compound Prescriptions
Compound prescriptions may not be a frequent occurrence for some pharmacies; however, those that do bill compounds must be aware of the audit risks. In addition to a valid prescription, the pharmacy must also have sufficient compound worksheets/logs, and ensure they are billing the claim accurately.
Here is a review what you will need for audit purposes for compound prescriptions:
- Do not bypass plan rejects by omitting non-covered ingredientUtilize Submission Clarification Code 08 (Process Compound for Approved Ingredients) when appropriateDo not reduce quantity to bypass any plan rejects due to cost or prior authorization requirementsConfirm pharmacy software is billing accurate quantities for “QS”(quantity sufficient), if needed
Compounds should only be billed and compounded using USP-NF (United States Pharmacopeia-National Formulary) pharmaceutical grade ingredientsRefer to each PBM Provider Manual for correct Level of Effort (LOE) billing codesPAAS Tips:
Audit Risks: Medication Home Delivery
Many independent pharmacies offer unique services to their patients, such as house charge accounts and medication delivery, to provide a better customer experience. While these are convenient services to offer patients, they do bring audit risks if they are implemented without appropriate safeguards.
PAAS National® analyst have seen numerous PBM audit recoupments for insufficient deliveries and discrepancies linked to insufficient evidence of refill request, copay collection, or delivery. Additionally, we have seen audits where the prescriptions were billed for deceased patients.
Review the tips below to ensure that your pharmacy doesn’t incur unnecessary audit risks.
PAAS Tips:
California Pharmacy Charged in $300 Million Medicaid Fraud Scheme
The US Attorney’s Office for the Central District of California recently issued a press release outlining charges against a pharmacist for the submission of more than $300 million in fraudulent claims to the state Medicaid Program (Medi-Cal) for medications that were not medically necessary, where drugs were not dispensed to patients, and where prescriptions were obtained through illegal kickbacks.
Reportedly, the pharmacy exploited a loophole in Medi-Cal’s claim adjudication process starting in 2022 when Medi-Cal suspended Prior Authorization requirements during a transition to a new payment system. When the pharmacy found this loophole, they began billing for “tens of millions of dollars per month for dispensing high-reimbursement, non-contracted, generic drugs” through the pharmacy claim system. The pharmacy obtained prescriptions through illegal kickbacks and frequently did not even order or dispense the medications involved.
Consequently, it seems Medi-Cal has followed up on this fraudulent activity with more pharmacies receiving extensive invoice audit letters in late July 2024 requesting over three years of invoice records, in addition to dispensing history and financial records (e.g., income statements and balance sheets).
Fraudulent activity from one provider gives payors and PBMs justification to perform additional audits looking for other criminals. Invoice audits often uncover honest billing and documentation errors that can cost you big money – see the tips section below to protect yourself from losses in an invoice audit.
PAAS Tips:
Is It Time to Purge? Understanding Record Retention Requirements
The majority of prescriptions filled by pharmacies are based off of an electronically-sent prescription, or “e-script” – 94% according to a 2021 Surescripts National Progress Report to be exact. However, physical hardcopies may still exist in the form of telephone orders, transfers, faxes and written hardcopies. In an effort to free up physical space, amongst other reasons, a common question PAAS National® analysts receive is in regard to how long pharmacies are obligated to retain physical hardcopies of prescriptions, in addition to other physical records. In essence, “PAAS, can I get rid of this yet?”.
Unfortunately, there is not a straightforward answer. The pharmacy needs to consider a number of things in order to ensure they are in compliance.
Many regulations exist which impact how long records are maintained; inconveniently, they all differ. With that said, the pharmacy must maintain the records to accommodate the longest time period, relieving the pharmacy from memorizing specific regulations. According to 42 CFR §422.504(d) and 42 CFR §423.505(d), two federal regulations governing the CMS Medicare Part D Program, records must be retained for a period of ten (10) years in addition to the current contract year, which includes, but is not limited to, hardcopy prescriptions, signature logs, copay collection and invoices. Since Medicare Part D has the longest record retention requirement, it is PAAS’ recommendation to retain records for 11 years.
Pharmacies need to also consider in which format the records may be stored. As addressed above, electronic transmission is the primary origin of prescriptions. However, there still exists a fraction of prescriptions that pharmacies may have in a physical hardcopy form. It is common for states to have a requirement for hardcopies to be retained in their original form for a period of time before converting to an electronic format.
In the same vein as state-level original format requirements, the DEA has record retention requirements, including but not limited to controlled substance prescriptions, invoices, inventory counts. Controlled Substances must be kept in their original form for two (2) years from the written date. If a pharmacy opts to convert a physical hardcopy to an electronic copy thereafter, it needs to be an exact copy of the front and back of the prescription even if the back of the prescription is blank.
In conclusion, PAAS urges members to be mindful of how they retain records, whether it is in electronic or physical format. In the case of software changes/crashes/etcetera, ensure there is a backup method to be able to access prescriptions (and other important documentation) in a “readily retrievable” manner. Regardless of the reason, pharmacies are still obligated to respond to audit requests.
PAAS Tips:
How to Submit Your Audit Documents for an Effective Review
PAAS National® analysts continue to see an increasing amount of PBM audits demanding large audit volumes of documents for reviews. Our goal is to help pharmacies respond accurately and efficiently as you submit documentation.
PAAS analysts review your documents as if we are performing remote pharmacist verification, so it is helpful if we can see both the prescription AND the billing information at the same time.
Upon receiving an audit notice, send it to PAAS. This allows for the analyst on your case to provide guidance from the very beginning of the audit process, which can result in you saving time gathering less paperwork. Additionally, it allows the analyst to provide guidance on what to look for as documents are pulled, such as any electronic clinical notes that need to be added to the hardcopy. This can result in a more efficient, and seamless, pre-audit consult after documents have been reviewed by your analyst, ensuring an effective review for your audit.
General
Prescription Hardcopies
hardcopy
Signature Log
Copay Collection
PAAS Tips:
OptumRx® Provider Manual Updates May Shift Audits – Especially LTC
OptumRx® updates their Provider Manual several times throughout the year and publishes the full version on its publicly available webpage. Since a PBM’s Provider Manual is an extension of their contract, the terms and conditions within the Provider Manual are expected to be followed and non-adherence can cause problems for pharmacies. Such problems may consist of audit chargebacks, fraud, waste and abuse investigations, and even contract termination.
The latest OptumRx® Provider Manual publication is the 2024 Fourth Edition Version 4.1. PAAS National® analysts want you to be aware of the following changes and potential implications it will have on the documents you maintain and provide for an audit as well as changes you may see in your audit results report.
The ever-changing OptumRx® Provider Manual is just another whirlwind which pharmacies are caught in and must learn to navigate. Remember, PAAS is here to help, and our dedicated team is just a phone call, email, or web inquiry away!
PAAS Tips:
Insulin Pens: Understanding Dosing Increments and Audit Risks
PAAS National® continues to see auditors flag insulin pen prescriptions for containing a dosage that does not align with the product. Most insulin pen products can be dosed in 1-unit increments; however, there are some insulin pens that range from 0.5-unit increments to 5-unit increments.
If prescriptions are written with directions that conflict with the dosing of the medication, pharmacies should clarify the directions with the prescriber and make a clinical note on the prescription. For example…
a prescription written for Toujeo® Max Solostar® with directions indicating 89 units daily must be clarified because the pen can only be dialed in 2-unit increments (i.e., the directions should either be 88 units daily of 90 units daily).
The following table outlines which insulin pens you should pay close attention to when dispensing:
PAAS Tips:
What to Do (and Not Do) When Your Days’ Supply is Rejected
Insurance companies require pharmacies to bill an accurate days’ supply based on mathematical calculations from the directions. Pharmacies should not guesstimate the days’ supply or process every claim as 30 days for simplicity. Not all claims will adjudicate when processing the correct days’ supply, usually due to plan limitations. What should be done in these situations?
The first step is to make note of any reject messages received when processing for the correct days’ supply. For example, if the insurance limits the quantity to a 30 days’ supply, write “ILQ 30” on the prescription. Then reduce the quantity, if possible, and rebill the claim with the adjusted [accurate] days’ supply based on the revised quantity. Reduce the quantity further if the claim still rejects, until you reach the smallest unbreakable package size.
If the smallest unbreakable package size still does not go through with an accurate day’s supply:
If the above process is used, and you processed the claim with an adjusted [inaccurate] days’ supply, you are at risk for early refills because the PBM adjudication logic will allow you to submit a refill claim when the utilization threshold is met based on the previous days’ supply adjudicated, not the actual days’ supply. PBMs still require the pharmacy to monitor utilization and only refill when appropriate based off the accurate [calculated] days’ supply and not the adjudicated days’ supply. Remember, the claim rejection for “refill too soon” will not be appropriately triggered when the pharmacy is forced to bill a smaller days’ supply than the true calculated day’s supply. To help avoid this, PAAS National® suggests documenting the actual days’ supply in the directions for use (e.g., “actual days’ supply=37”) so that it prints on the label to alert staff and patients of the appropriate refill intervals.
Another situation pharmacies run into is when the accurate days’ supply is rejected due to exceeding the plan limit for a maximum daily dose.
For example, a prescription written for OxyContin® 30 mg, quantity 90, with directions to “take one tablet 3x daily” may receive a rejection for “Maximum two tablets per day.”
In this situation, pharmacies should not reduce the quantity to 60 tablets for a 30-day supply (this would be considered bypassing the plan limit). Instead, pharmacies should pay close attention to any messages given on how to resolve the rejection, including calling the PBM help desk for an override or getting a prior authorization started with the prescriber. Alternatively, the prescriber could decide to change the dose or prescribe an alternative medication.
What if the prescriber refuses to obtain a prior authorization or change the prescription to a clinically appropriate dose? Can the claim be split-billed? PAAS National® highly recommends against split billing or processing a claim as cash to circumvent a plan limit or prior authorization requirement. A doctor who refuses to obtain a prior authorization or change the medication/dose could be a red flag for diversion with controlled substances. Most plan limits are put in place based on appropriate clinical use and bypassing them can lead to easy recoupments for PBMs. Pharmacists have a corresponding responsibility to ensure that prescriptions are for legitimate medical purposes, especially for controlled substances.
PAAS Tips: