Does the option you are selecting ensure you’ll be able to easily retrieve and provide copies of any required information? Prescriptions, claim data billed to the insurance, signature logs, proof of copay collection and invoice records are all items that a pharmacy would need to be able to access whenever needed. Not only for auditing purposes, but to stay within contractual record keeping requirements as well. Medicare Part D rules require all records to be retrievable for 10 years, plus the current contract year; while Commercial plans, Medicaid, state, and federal requirements can all range from 2 to 7 years.

If you can produce documentation from your old system – great! Will the details pass an audit? Ensuring that prescriptions and other documentation from an old system have all necessary elements and are not missing things like unit of measure, clinical notes, or the pickup date on a signature log is important and can save a pharmacy from having to appeal. This is also a consideration when acquiring another pharmacy’s records. Be aware of potential audit hazards with newly acquired records. Origin codes, state transfer requirements and clear links to original prescriptions should be considered during the acquisition process.

PAAS Tips:

• Ensure you can readily retrieve and print all electronically archived documents in a useable format
• Have access to technical support when using any software vendor to avoid technical difficulties
• When acquiring records or switching to a new system, this typically requires an update to the prescription’s origin code [5], as well as having a clear reference to the original prescription (i.e., crosswalk for data migrations)

• Pharmacies can find the updated version of the Medicare Drug Coverage and Your Rights Notice (Form CMS-10147) and instructions, including Spanish, Chinese, Korean, and Vietnamese translations in the “Downloads” section on the CMS website
  • If the form is integrated into your software system, be sure that your software vendor has uploaded the form with the new expiration date of 12/31/2027
• PAAS FWA/HIPAA compliance members should review section 4.5 of their PAAS National^® FWA/HIPAA Policy and Procedure manual
  • Beneficiaries that reside in a long-term care facility are not exempt from receiving the notice; LTC pharmacies should review our guidance in the manual
• Look for NCPDP reject code 569 with an explanation of “Provide Notice: Medicare Drug Coverage and Your Rights”
• The distribution must take place even if the pharmacy obtains a therapeutic alternative. Getting a prior authorization or change to alternative therapy does not waive the notification requirement
• Pharmacies should act immediately to implement the updated CMS-10147 form with the 12/31/2027 expiration date. You will not be compliant if this is not done by 3/1/2025 as the previous expiration date is 2/28/2025

Strict Handling and Distribution Controls

Spravato^® is classified as a Schedule III controlled substance, requiring stringent oversight:

• Restricted distribution available only through certified healthcare facilities enrolled in the REMS program
• Patients must also be enrolled in the REMS program prior to receiving treatment
• Both the pharmacy and the provider facilities must complete training and certification to prescribe, dispense, and administer Spravato^®
• Secure storage of Spravato^® is a must to prevent unauthorized access or misuse and abuse

Supervised Administration and Patient Monitoring

Patients cannot self-administer Spravato^® at home. Instead, it must be given under medical supervision in a certified healthcare setting:

• In-clinic administration under the direct observation by a healthcare provider as the patient self-administers the nasal spray
• Post-dose monitoring due to potential side effects (sedation, dissociation, blood pressure increases), patients must remain in the clinic for at least 2 hours post-administration
• Transportation precautions are necessary for the patient to not drive or operate machinery until the day after receiving Spravato^®

Required Documentation for Proof of Delivery for PBM Audits

Ensure you have proper documentation of dispensing to a certified healthcare setting. You must have the following documentation:

• Name, address and telephone number of the providers office
• Printed name, title, signature and date of the representative receiving the order
• Patient name, dose, number of devices dispensed and the date of the dispensing

See our November 2019 Newsline article, Spravato^® – Watch the Billing!, for proper billing information, including package size and billing units.

PAAS Tips:

• Review REMS program requirements for Spravato^®
• Make sure the patient address, physician address, and physician DEA# are on the front of the prescription order

The warning letter is softer in tone and educates recipients about the existence of an authorized distributor network and requests that the pharmacy reviews their suppliers to confirm that they are purchasing from a secure supply chain. Letters point out that purchases made outside of the secure supply chain could mean dispensing products that are counterfeit, have been tampered with (gray market), or are not authorized for sale in the United States.

The law firm letters boldly accuse pharmacies of having an “invoice shortage” and provides spreadsheets with claims and rebate data to support their allegations. These letters threaten to harm pharmacies by withholding rebate dollars owed to PBMs and notify PBMs of the pharmacy’s “non-compliance” unless the pharmacy pays a large amount of money to make the issue “go away”.

While PAAS National^® has only seen letters from LifeScan, the concept of an authorized distributor network applies to many manufacturers of OTC diabetic test strips (see list below).

Manufacturer authorized distributor lists for major diabetic test strips:

1. Abbott https://www.diabetescare.abbott/support/distributors.html
2. Ascensia https://www.ascensiadiabetes.com/ (click on “distributors” at the bottom of the page)
3. LifeScan www.genuineonetouch.com
4. Roche https://rxvp.accu-chek.com/welcome/adr_list
5. Trividia Health^TM https://www.trividiahealth.com/where-to-buy/

Because diabetic test strips are classified by the FDA as OTC medical devices, they fall outside of the Drug Supply Chain Security Act (DSCSA) and there is no requirement for a “pedigree” to ensure sourced product is legitimate and not stolen, counterfeit or previously dispensed (gray market). Pharmacies should take extra care when sourcing product that is advertised at a lower cost compared to primary wholesalers. Manufacturers have developed and maintained “lists” to aid supply chain partners like pharmacies.

It is also important to understand what each of the major PBMs have to say about sourcing diabetic test strips.

• Caremark requires network pharmacies to purchase diabetic test strips from authorized distributors only
• Express Scripts requires network pharmacies to purchase diabetic test strips from authorized distributors only
• OptumRx does NOT explicitly require pharmacies to purchase test strips from authorized distributors; however, they do require that pharmacies source all products (including OTC test strips) from vendors that are both (i) licensed as a drug wholesaler in your state and (ii) an NABP accredited drug distributor.

Finally, there are two states (California and New Jersey) that have regulations pertaining to the purchase and distribution of OTC diabetic test strips.

PAAS Tips:

• Be mindful of the interplay between state pharmacy regulations, PBM contract requirements, and manufacturer distribution channels when making inventory purchase decisions – the lowest possible price may cause you to run afoul of requirements
• Contact PAAS at (608) 873-1342 or info@paasnational.com if you receive a letter from LifeScan or an affiliate law firm regarding purchases of diabetic test strips so that we can assist you in navigating a response