Diabetic Test Strip Authorized Distributors

Independent pharmacies continue to receive threatening letters from LifeScan and an affiliated law firm on a monthly basis. These letters argue that pharmacies submitted more claims for LifeScan’s OneTouch® diabetic test strip products to PBMs than are supported by purchase history from authorized distributors. This is essentially an “invoice audit” conducted behind the scenes and pharmacies are not participants until they receive the negative results.

Additionally, these letters threaten to expose pharmacies to harm 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”.

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As readers are well aware, it is difficult to make a profit on insured claims where PBMs control the selling price, so it is logical to look to lower your cost of goods as much as possible to either squeak out a little profit or minimize the losses. What becomes problematic is trying to buy at the lowest cost possible while also adhering to PBM contractual requirements and ensuring that products obtained through the supply chain are legitimate.

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 need to take extra care when considering sourcing product that is advertised at a lower cost compared to your primary wholesaler. Manufacturers have developed and maintained “lists” to aid supply chain partners like pharmacies.

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 HealthTM https://www.trividiahealth.com/where-to-buy/

It is also important to understand what each of the major PBMs have to say about sourcing diabetic test strips. While OptumRx does NOT explicitly require pharmacies to purchase test strips from authorized distributors, 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. Both Caremark and Express Scripts have language in their respective Provider Manuals to require network pharmacies purchase test strips from authorized distributors only.

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

Ensuring Audit Readiness: What PBMs Look for in Signature Logs and Proof of Delivery

One of the most common questions PAAS National® receives from our members is: what are the requirements for audits when signature logs are requested. This article contains reminders and requirements auditors will be looking for to help ensure your pharmacy will be prepared.

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With the end of the Public Health Emergency on May 11, 2023, PBM waivers were rescinded regarding signature collection and mailing allowances, except for Humana who permitted the mailing waiver until December 31, 2023. Pharmacies must remind all staff to collect signatures at the time of prescription pickup and delivery. Not complying could result in big audit recoupments and lots of hassle for pharmacies to appeal.

Pharmacies and patients alike became used to not having to sign at prescription pick up, or like the convenience of having their local pharmacy mail or deliver medications to them. Unfortunately, getting patients to understand what their insurance requires can be difficult, but is necessary.

The large PBMs like Caremark, Humana, OptumRx and Express Scripts allow delivery of prescriptions, but some do have limitations or restrictions. Some PBMs may include these restrictions in their pharmacy contract agreements and not their provider manuals.

Two of the largest PBMs restrict delivery as follows:

  • OptumRx® Pharmacy Provider Manual specifically states deliveries can only be done by a pharmacy’s W-2 employee within a 100-mile radius. The use of common carriers, including USPS are prohibited by this PBM.
  • Caremark® Pharmacy Provider Manual states pharmacies that deliver greater than 20% of monthly claims by common carriers, including USPS, are not considered “Retail Pharmacies”.

PAAS Tips:

  • Remind all staff that signatures are now required for all in-store pick-up and delivered prescriptions
  • Signature logs, delivery logs, and tracking must include the date the patient received the prescription
  • Pharmacy staff and delivery drivers are not allowed to sign on behalf of a patient
  • Pictures showing delivery was made, or patient “authorization” to leave at their door is not acceptable for PBM audits
  • When utilizing a common carrier, the PBM requires a link between the prescription and the tracking
  • Tracking information is required for audit purposes, so be sure you have access to this information after deliveries have been made
  • Pharmacies that mail or ship prescriptions out of state must adhere to the receiving state’s licensure requirements
  • PAAS has additional resources available on our website, including Signature Log Book to be Printed and our Signature Trifold Mailer

2024 Self-Audit Series #5: Topical Prescriptions

Topical medications are easy audit targets, especially with the rising costs of some of these medications. The discrepancy that is commonly cited for topical medications is …

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“non-calculable instructions”. This means the PBM does not feel the pharmacy can accurately bill the days’ supply based off the instructions on the prescription. This will require pharmacies to obtain additional information, usually in a prescriber’s statement, in an attempt to appeal.

Pharmacies must do their due diligence to ensure the appropriateness of what is being billed. Prescriptions that include the number of grams per application and a frequency can easily be billed with an accurate days’ supply. Vague instructions for use should be clarified with the prescriber and documented with a clinical notation on both the prescription and added to the patient’s label (an OptumRx requirement!).

Pharmacies must not rely on the days’ supply field indicated on an electric prescription as this is not accepted by PBM auditors. Prescriptions written for a quantity of “1”, are generally flagged for “incomplete quantity”. Auditors require a specific quantity in grams, milliliters, or pumps to be indicated. Verifying and documenting can help avoid audit recoupments!

PAAS Tips:

  • Educate staff to review topical prescriptions for complete instructions prior to filling
  • Self-audit expensive topical prescriptions frequently to ensure the instructions are sufficient for audit
  • Download and share with staff, the PAAS National® Topical Creams and Ointments Chart and utilize the PAAS National® App when utilizing the Finger-Tip Unit method
    • See PAASNational.com/app for more information
  • Topical medications should only be filled upon request
  • Reminder that all clinical notations should include: date, name and title of who you spoke with, what was clarified, and your initials

How to Safeguard Your Pharmacy from Fraudulent Electronic Prescriptions

PAAS National® has recently assisted pharmacies who received fraudulent electronic prescriptions from prescribers that had their electronic prescribing credentials hacked or stolen. There was a recent widespread e-prescription fraud reported earlier this year where criminals issued over 18,000 prescriptions to pharmacies in 18 states in just a 5-hour span.

Fraudulent prescriptions that are billed to the patient’s insurance are subject to full recoupment when audited by the PBM. Unfortunately, pharmacies will need to cooperate with the PBM audit process and prove that they were not willing participants by explaining their process of “due diligence” to authenticate the prescriptions. To offset the financial losses from PBM recoupment, pharmacies will need to lean on their business insurance or separately pursue legal action against the perpetrators.

Of course, it would be much better to avoid dispensing (and billing) these fraudulent prescriptions from the start. Although electronic prescriptions are generally safer than written or telephone prescriptions, they are still vulnerable to exploitation by criminals targeting unsuspecting pharmacies.

Here are some techniques to spot fraudulent electronic prescriptions at your pharmacy:

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  1. Know the prescriber
    1. Is this a new prescriber in your area?
    2. Have you received electronic prescriptions from this prescriber before?
    3. Is the medication within their scope of practice?
    4. Can you verify prescriber information (e.g. phone, address) through public resources?
  2. Know the patient
    1. Is this a new patient at your pharmacy?
    2. Does this patient live within your service area?
    3. How did the pharmacy obtain prescription insurance information?
    4. Consider requiring a copy of photo identification for prescriptions picked up for new patients
    5. Some level of skepticism may be need if all interactions are with a friend or family member
  3. Review the prescription for unusual items such as:
    1. Is dose regimen outside the norm?
    2. Does patient have indication to support use?
    3. Does the patient have other prescriptions from this prescriber? Can the patient confirm they are being treated by the prescriber?
    4. Are there multiple prescriptions issued for high-cost medications brand medications, particularly those that may be dispensed in their original, intact containers

PAAS Tips:

  • Document your due diligence efforts on the prescription or in your pharmacy management software
  • Report fraudulent prescriptions to prescribers, local police, board of pharmacy/medicine, and the PBM
  • Contact your business insurance provider as they may have remedies to help manage fraud losses

What’s New with Prescription Validation Requests in 2024?

In the PAAS National® January 2024 Newsline article PBM Validation Requests Rose 123% in 2023 – What You Need to Know, we discussed the PBM trends we saw in 2023. Below is a list of drugs reviewed and analyst comments that have been compiled through the first six months of 2024 for comparison.

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Top 5 drugs reviewed in 2023 compared to first half of 2024:

January-June 2024 January-December 2023
Ozempic® Lantus®
Nurtec® Humalog®
Mounjaro® Creon®
Creon® Levemir®
Ubrelvy® Invega®

 

While Creon® is still one of the top PBM targets, you can see that during the first half of 2024, the PBMs have shifted their focus from monitoring insulin claims to GLP-1s and migraine medications, demonstrating how PBM audit trends change over time. Be assured that the PBMs will continue to send claim reviews for insulin as well. While they may not show in the top 5 drugs of 2024 so far, Tresiba®, Humalog®, Levemir®, insulin lispro and Toujeo® were all right behind Ubrelvy® in the number of claim reviews the PBMs have issued to date in 2024.

The top 5 comments noted by an analyst after claim review mimic the same 5 from 2023:

  1. Document the reason for the cut quantity – auditor will want to know why the pharmacy dispensed less that what was prescribed
  2. Black out acquisition cost and/or profit margin values on the backtag
  3. A clinical notation is needed and requires 4 elements: Date, who you spoke with and their title, what they confirmed, and the pharmacy employee initials
  4. No backtag/sticker attached, typically requested by the PBM and helpful for PAAS to review the billing elements
  5. Verify the quantity prescribed and make a clinical notation on the hard copy – Unit of Measure (UOM) is not specified or does not make sense for the medication ordered

PAAS Tips:

Proper Billing of Nayzilam® and Valtoco® Nasal Sprays

A subset of patients who experience seizures due to epilepsy suffer from seizure clusters, despite being on maintenance epilepsy medications. Nayzilam® and Valtoco® are both FDA-approved for the “acute treatment of intermittent, stereotypic episodes of frequent seizure activity (i.e., seizure clusters, acute repetitive seizures) that are distinct from a patient’s usual seizure pattern” in patients 12 years and older and 6 years and older, respectively. Regardless, if your patient is prescribed Nayzilam® or Valtoco®, the perplexing billing opens the door for easy recoupments from PBMs.

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The first step to take when receiving either a Nayzilam® or Valtoco® prescription is to ensure it has clear directions and quantity prescribed.

Per the manufacturer product label, the initial dose of Nayzilam® is one spray into one nostril. If needed, and the directions support, an additional spray may be administered into the opposite nostril 10 minutes after the initial dose if the patient has not responded to the initial dose. For Valtoco®, the number of sprays per dose is dependent on the strength prescribed. According to the manufacturer product label, the initial dose for the 5 mg and 10 mg strengths is one spray into one nostril while the initial dose for the 15 mg and 20 mg strengths is two sprays – one spray into each nostril. If needed, and the directions support, a second dose may be administered at least 4 hours after the initial dose if the patient has not responded to the initial dose.

Also, it is necessary to know the maximum number of episodes the patient is allowed to treat per month to correctly calculate the days’ supply. FDA-approved directions recommend no more than two doses of Nayzilam® should be used to treat a single episode and it should not be used to treat more than one episode every three days with a maximum of five episodes per month. Similarly, FDA-approved directions recommend no more than two doses of Valtoco® should be used to treat a single episode and it should not be used to treat more than one episode every five days with a maximum of five episodes per month.

See the chart below and PAAS Tips for recommended billing guidance, in addition to other prescription components necessary to best protect your pharmacy from audit recoupments:

Drug Name NCPDP Billing Unit per Box Number of Sprays per Dose Number of Doses per Box Number of Sprays per Box Suggested Days’ Supply per Box
Nayzilam® 5 mg/spray 2 EA 1 dose = 1 spray 2 2 x 5 mg 3
Valtoco® 5 mg/spray 1 dose = 1 spray 2 x 5 mg 5
Valtoco® 10 mg/spray 1 dose = 1 spray 2 x 10 mg
Valtoco® 15 mg/2 sprays 1 dose = 2 sprays 4 x 7.5 mg
Valtoco® 20 mg/2 sprays 1 dose = 2 sprays 4 x 10 mg

PAAS Tips:

  • If any clarifications need to be made on the directions, be sure to include a full clinical note, complete with a date, name and title of person spoken with, what was communicated, and your initials
  • Ensure both the quantity and unit of measure is clear on the prescription as “2 boxes” and “2 EA” will lead to different billing outcomes
  • Notate the number of episodes the patient will be treating per month to ensure proper billing and use, paying particular attention to the refill intervals
  • Nayzilam® and Valtoco® are both C-IV and therefore require all aspects of a valid controlled substance prescription on the hard copy, such as patient address, physician address and physician DEA #

On-Demand Webinar: Cybersecurity Considerations for Community Pharmacies

On May 8, 2024, PAAS National® hosted a webinar: Cybersecurity Considerations for Community Pharmacies. PAAS Audit Assistance members have access to the recorded webinar, in addition to many other tools and resources on the PAAS Member Portal.

In a world where threats lurk around every digital corner, safeguarding sensitive information has never been more crucial. Recent events, such as the Change Healthcare cyberattack, serve as stark reminders of the pressing need for robust cybersecurity measures. In pharmacies, where compliance with regulations like HIPAA are of great importance, the stakes are higher than ever.

President of PAAS, Trent Thiede, discussed:

  • The importance of cybersecurity in pharmacy
  • The top threats facing healthcare cybersecurity
  • Components, and importance, of a HIPAA Security Risk Analysis

Should you have any questions, or need assistance getting access, call 608-873-1342 or email info@paasnational.com.

PAAS Tips:

The Different Cyclosporine Eye Drops That Could Cause Audit Trouble

Cyclosporine eye drops are used to increase tear production in individuals with certain eye conditions and dry eye disease. You are likely familiar with Restasis® and Restasis MultiDose®, but the newest cyclosporine product Vevye®, hit the market in late 2023.

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Vevye® uses a water-free vehicle which allows the medication to spread evenly and remain longer across the surface of the eye. The Vevye® drop size of 10 microliters is much smaller than eye drop formulations that contain water which have a typical drop size of between 30 to 50 microliters. This can cause confusion when trying to calculate a days’ supply. Vevye®, along with the other three medications listed in the chart, are unique and would NOT apply to the PBM published drops per millimeter guidelines.

Medication NDC Package Size Manufacturer Beyond Use Date
Cequa® 0.09% solution 47335-0506-96 60 Each The solution from one single-use vial is to be used immediately after opening for administration to one or both eyes: the remaining contents should be discarded immediately
Restasis® 0.05% emulsion 00023-9163-30

00023-9163-60

 30 Each

60 Each

 The emulsion from one single-use vial is to be used immediately after opening for administration to one or both eyes; the remaining contents should be discarded immediately

Caution: Restasis® is also available in a 5.5 mL multi-dose preservative-free bottle NDC 00023-5301-05
Verkazia® 0.1% emulsion 65086-0001-12 120 Each The emulsion from one single-use vial is to be used immediately after opening for administration to one or both eyes; the remaining contents should be discarded immediately
Vevye® 0.1% solution* 82667-0900-02 2 mL After opening, can be used until the expiration date on the bottle

⃰ Written correspondence from manufacturer confirms 200 drops in a 2 mL bottle. 2 mL/0.01 mL per drop = 200 drops

PAAS Tips:

  • A prescription needs calculable directions including which eye, or eyes, the drops are being utilized in, the frequency for which they are used, and a specified quantity (e.g., mL, bottles, vials)
  • Ensure drops available in single-use vials are calculated based on the number of vials needed per day, not drops/mL
  • Be aware of the special billing considerations for Vevye® ophthalmic solution
  • Review our updated Eye Drops Days’ Supply chart on the PAAS Portal
  • Refer to the March 2024 Newsline articles to learn more about unique eye drops and special billing considerations

Commercial Claims Reimbursed through Embedded GoodRx® Discount Cards

Pharmacies have been reaching out to PAAS National® with concerns about claims being reimbursed through an embedded discount card (e.g., GoodRx®) rather than a patient’s commercial insurance plan benefit. Most concerning is that these claims have negative remittances or “clawback fees” that reduce pharmacy revenue and may pose problems when trying to perform a Coordination of Benefits (COB) claim to a secondary payer, such as Medicaid.

PAAS wrote about Discount/Cash Cards being disruptors in the industry last March, after speaking at NCPA’s Multiple Locations Conference. The crux of the issue is discount cards have been gaining popularity (no thanks to GoodRx®) and have been effective at undermining the perceived benefit that PBMs are supposed to provide (i.e., why is GoodRx® able to offer a better price on my prescriptions than my insurance?). Consequently, major PBMs have embedded these discount card networks into the plan benefit design, which allows patient pay amounts to count towards deductibles (see press releases as follows).

While a pharmacy may have chosen to decline processing claims for GoodRx®, these newly embedded plans are not as easily identifiable (particularly in advance), and when they are, pharmacies can find themselves in a precarious situation. Contractually, pharmacies should not …

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reverse the claim and bill as cash for the same amount. This can impact performance networks and adherence scores (impacting a pharmacy’s ‘performance incentives’). Additionally, it can jeopardize a pharmacy’s Usual and Customary pricing. Patients also won’t get the benefit of it applying towards their deductible, and if they submit the receipt to the PBM, it will likely come back to the pharmacy with a PBM inquiry into pharmacy operations.

In some instances, we have seen Caremark claims provide an adjudication message notifying [the pharmacy] that the claim processed via a discount card and that the patient may ‘opt out’ if their claim needs to be processed as a COB. If Medicaid is a secondary payor, patients would need to ‘opt out’ of the Cost Saver option and then the pharmacy would be able to reverse and reprocess claims through the commercial benefit (not the discount card) to allow appropriate COB processing.

While PAAS strongly opposes this novel PBM tactic to gouge network pharmacies, it’s important to be aware of downstream effects if drastic measures are taken. PBMs can easily identify pharmacies that are quickly reversing claims processed under discount networks.

Here is a video explaining the workflow of these discount card claims and how the money is suspected to flow.

PAAS Tips:

  • Reversing and “cashing out” claims paid through discount cards may:
    • Prevent patient pay amounts from counting towards deductibles
    • Violate Usual & Customary pricing
    • Jeopardize network/contract status
  • Stay engaged politically, both at your state association and federally through NCPA
    • There’s a belief that these discount networks may violate antitrust laws through pricing fixing and we need political advocacy to shine a light
      • Discount networks create data and pricing information to be shared almost ubiquitously
      • Consider the corollary from the FTC: Price Fixing by Algorithm is Still Price Fixing

Missing PBM Audit Notifications: How Are They Supposedly Sent?

At times, pharmacies fail to receive audit notifications, even though PBMs record them as “successfully” delivered. Thus, understanding how PBMs communicate with pharmacies can be beneficial. Here, we will examine the communication methods outlined in each major PBM provider manual:

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Caremark

Caremark’s Provider Manual states “notices will be delivered in person by mail, via fax the Provider’s fax number or by email via the email address provided by Provider in Provider’s enrollment documentation or as otherwise indicated by Provider to Caremark and agreed to by Caremark or via Pharmacy Portal.” It goes on to say that it is the responsibility of the provider to notify Caremark when contact information needs to be updated. There can also be times when Caremark will communicate via phone to pharmacies, most commonly seen with desk audits.

OptumRx

OptumRx’s Provider Manual states “Provider understands Administrator relies on the information about its Provider, as well as each Pharmacy location provided by NCPDP and directly to Administrator, therefore, Provider: (1) Agrees to update in a timely manner all information in the NCPDP database whenever … and (2) Immediately notifies ORx and NCPDP of updated contact information at pharmacyprograms@optum.com,including changes in telephone numbers, fax numbers, email address.” In addition, it states OptumRx may communicate via telephone, mail, fax, and/or email when it comes to conducting their audits.

Express Scripts

Express Script’s Provider Manual states “All changes to Provider demographic information for independent Network Providers must be submitted by logging onto https://www.esiprovider.com and completing the online Change of Demographics form. Provider shall also submit updated demographic information directly to NCPDP and/or any other third party website as applicable”. It also states Express Scripts will communicate via fax, email, or USPS when initiating an audit.

Prime Therapeutics

Prime Therapeutics uses the information pharmacies input to their NCPDP profile as their sole means of communication. In the Provider Manual, it states to go directly to the NCPDP’s website https://online.ncpdp.org to submit changes. Prime Therapeutic’s system will incorporate all new NCPDP updates on a weekly basis.

Humana

Humana’s Provider Manual states “[Humana] will notify all pharmacies via traditional mail (UPS or certified mail). If you prefer to be notified via email, we can send letters via secure message. To notify HPSX of your notification preference, please send an email to pharmacyaudit@humana.com.”

Elixir

Elixir also utilizes NCPDP to elicit pharmacy contact information. The Provider Manual states “Independent pharmacies are required to maintain NCPDP Part I and II with accurate and current information at all times as Elixir utilizes this information during its review.” Furthermore, the provider manual states “email is the preferred method for Pharmacy communications by Elixir. Pharmacies will be notified of any audit communications via fax unless the Pharmacy FWA Department has been notified of email preference”. The email to communicate an update in audit communication preference is PharmacyAudits@elixirsolutions.com

PAAS Tips:

  • Update your safe sender list and/or junk mail to ensure any audit notices sent via email are received
  • Educate pharmacy staff to watch faxes and email carefully for any PBM communications – tossing an audit can be costly
  • Consider using an electronic/paperless fax system that records/retains all incoming faxes
  • Ensure your pharmacy’s NCPDP profile is kept up to date as this is a primary means for many PBMs to gather pharmacies’ contact information – this should be updated whenever a change occurs
    • Designate an email address that is routinely monitored to avoid missing timely audit communications