Medicare Part D Audits: Top 11 Areas for Scrutiny

By Karen Blum, Published August 26, 2021 by Specialty Pharmacy Continuum

Medicare Part D pharmacy audits are on the rise, and pharmacists would be wise to adapt their business practices and know how to respond, an audit expert said at the virtual MHA 2021 Business Summit.

“Prior to COVID-19, we’ve seen a nearly 80% increase in audits that pharmacies experience,” said Trenton Thiede, PharmD, MBA, the president of PAAS National®, a pharmacy audit assistance company. These have primarily been from pharmacy benefit managers (PBMs) but also by plan sponsors and the Centers for Medicare & Medicaid Services, Dr. Thiede noted. The increase has occurred partly as a result of escalating health care costs and the opioid epidemic, as well as instances of fraud, waste and abuse, he said. There’s been a shift from on-site to more quick turnaround desk audits that try to validate quick outliers, such as high-dollar items or incorrect days’ supply. Nearly one-fourth of desk audits seen by his company now are for these prescription validation requests, he said.

Over the past year, due to COVID-19, many PBMs have conducted virtual audits. These take elements from both on-site and desk audits, Dr. Thiede said, asking compliance questions, requiring photos of the pharmacy area and copies of licenses, as well as requesting copies of prescriptions and signature logs.

Pharmacy owners who don’t perform well on audits face risking their reputation, license, fines and even imprisonment, he said. Financial recoveries are common, but his firm is seeing more and more network terminations due to poor compliance or bad actors.

Overall, pharmacies need the following items to perform well on audits: prescriptions that are legal and valid per state and federal laws, proof of filling and billing accurately, proof of dispensing, proof of copay collection, and documents to prove enough inventory was purchased from an appropriate source.

Common audit discrepancies can occur over items such as missing, invalid or altered prescriptions; unauthorized refills; refilling medication too soon; incorrect dispense-as-written (DAW) codes; missing or invalid signature logs; and issues delivering medication greater than 10 days after the date of fill, Dr. Thiede said.

Dr. Thiede presented the top 11 audit discrepancy areas noted by his firm, and advised how to prepare for them. >>Learn more

Humana Notice of Erroneous Billing under Medicare’s Limited Income Newly Eligible Transition Program (LINET)

Brace yourself, a Humana LINET recoupment could be in your future. LINET is a program that started January 1, 2010 under CMS, designed to simplify Part D prescription drug coverage for Medicare beneficiaries who are eligible for Medicaid (dual eligible) or the Medicare Low-Income Subsidy (LIS).

PAAS National® has received an exorbitant number of audits from Humana, the administrator for the LINET program, in the past two weeks. Pharmacies should be concerned about these supposed “overpayments” going back 6+ years and the potential industry implications that lie ahead. PAAS has researched the issue and wants to help your pharmacy respond to these egregious attacks on your business.

SPECIAL: Join PAAS for 1 year, instead of 2 years today to get assistance with this recoupment.

Call us at (608) 873-1342 or go to ‘Buy Now’ to join today!

PAAS’ insight and proactive guidance will help you build an audit wall around your pharmacy. We want to save you vast amounts of TIME and MONEY. See why more than 5,000 pharmacies across the US agree. As a member, you receive an unlimited amount of one-on-one audit assistance—as much as you need!

As Seen in Fortune: Pharmacies Face Extra Audit Burdens …

PAAS National® provided data for the article “Pharmacies face extra audit burdens that threaten their existence” published August 6, 2021 on Fortune.com:

According to data from PAAS National, a pharmacy audit assistance service, while the number of pharmacy audits in 2020 declined nearly 14% from the year before, the overall number of prescriptions reviewed went up 40%. That meant pharmacies had to provide more documentation and stood to lose much more money if auditors could find any reason — even minor clerical errors — to deny payments.

The average audit in 2020 cost pharmacies $23,978, 35% more than the annual average over the previous five years, the PAAS data shows. And the number of prescriptions reviewed in September and October was fourfold over what PAAS members had seen in previous years.

And Trent Thiede, President at PAAS National® was quoted:

Trent Thiede, president of PAAS National®, said many of the more than 5,000 pharmacies he works with stepped up to offer covid testing and shots and to become an even bigger resource for customers during this health crisis. “With vaccinations in full swing, priorities should be focused on serving patients and our communities, not responding to audit requests,” Thiede said.

When auditors come in person, they primarily do the review themselves, occasionally asking pharmacists to pull additional documentation.

“In these virtual audits, you have to pull the prescription, put it through a copier of some kind, get everything aggregated, get all the signature logs. They want your license off the wall. They want all the employee licenses faxed,” Thiede said. “It’s a lot more laborious for these pharmacies.”

Read the complete article here from the beginning

Pharmacies Facing More Payment Denials During Pandemic’s Virtual Audits

By Katie Adams. Published August 6, 2021 in Becker’s Hospital Review

Already marred from COVID-19 burnout and years of financial threats, independent pharmacies’ latest woe is pharmacy benefits managers’ shift to virtual audits during the pandemic. Independent pharmacies say the new process allows for significantly more claims to be denied and allege the practice is predatory, Kaiser Health News reported Aug. 6.

The number of pharmacy audits conducted in 2020 actually decreased by nearly 14 percent from the previous year, but the overall number of prescriptions reviewed increased by 40 percent, according to data from pharmacy audit assistance service PAAS National®. The data showed the number of prescriptions reviewed in September and October increased fourfold from what PAAS reported in previous years.

When PBMs conducted these reviews in-person, they sent an auditor who would perform the process and occasionally seek additional documentation from a pharmacist. The virtual process means pharmacies face an increased administrative burden and stand to lose much more money, a change imposed when they were scrambling to take care of patients during the pandemic.

Continue reading the full article here

Pharmacies Face Extra Audit Burdens That Threaten Their Existence

By Markian Hawryluk, Published August 6, 2021 by Kaiser Health News

The clock was about to strike midnight, and Scott Newman was desperately feeding pages into a scanner, trying to prevent thousands of dollars in prescription payments from turning into a pumpkin.

As the owner of Newman Family Pharmacy, an independent drugstore in Chesapeake, Virginia, he was responding to an audit ordered by a pharmacy benefit manager, an intermediary company that handles pharmacy payments for health insurance companies. The audit notice had come in January as he was scrambling to become certified to provide covid-19 vaccines, and it had slipped his mind. Then, a month later, a final notice reminded him he needed to get 120 pages of documents supporting some 30 prescription claims scanned and uploaded by the end of the day.

“I was sure I’d be missing pages,” he recalled. “So I was rescanning stuff for the damn file.”

Every page mattered. Pharmacy benefit managers, or PBMs, suspended in-person audits because of covid last year, shifting to virtual audits, much as in-person doctor visits shifted to telehealth. Amid added pandemic pressure, that means pharmacists such as Newman are bearing significantly more workload for the audits. It also has allowed benefit managers to review — and potentially deny — more pharmacy claims than ever before.

According to data from PAAS National, a pharmacy audit assistance service, while the number of pharmacy audits in 2020 declined nearly 14% from the year before, the overall number of prescriptions reviewed went up 40%. That meant pharmacies had to provide more documentation and stood to lose much more money if auditors could find any reason — even minor clerical errors — to deny payments.

The average audit in 2020 cost pharmacies $23,978, 35% more than the annual average over the previous five years, the PAAS data shows. And the number of prescriptions reviewed in September and October was fourfold over what PAAS members had seen in previous years.

Continue reading the complete article here

Facing Potential Disciplinary Action? PBMs Require Notification!

It can be a very stressful time for a pharmacy when they, or an employee, are being investigated by a regulatory body (e.g., Board of Pharmacy, Office of Inspector General (OIG) or Drug Enforcement Agency). It will likely not be the first thing on your mind to notify contracted PBMs. Consider

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paraphrased language from the OptumRx Provider Manual:

  • OptumRx is partnered with NCPDP for credentialing—all pharmacies are required to maintain Part 1 and Part 2 of their profile with NCPDP
    • Credentialing documentation must be provided within 48 hours if requested
    • Re-credentialing occurs every 3 years
  • OptumRx must be notified within 7 days, in writing, and include information regarding the agency who is conducting the investigation, if:
    • The Pharmacy Providers license/permit is in jeopardy of being suspended or revoked
    • The Pharmacy Provider receives notice of any proceedings which may lead to disciplinary action
    • Any disciplinary action is taken against the Pharmacy Provider or employees, including but not limited action taken by a Board of Pharmacy, OIG, GSA, law enforcement or other regulatory body
    • There is a subpoena of records related to Covered Prescription Services or the Pharmacy Providers business conduct
    • Seizure by law enforcement of the Pharmacy Providers prescription records, computer systems, financial records, accounts, or real property
  • Failure to report to OptumRx can result in immediate termination or suspension from the network

It’s important to note that OptumRx is requiring notification even if no disciplinary action was taken against the pharmacy or the employee. Every PBM may have different requirements, but the major PBMs require some sort of notification. Be sure to review a copy of the Provider Manual if you are unaware of the regulations regarding this issue.

These situations often arise after re-credentialing as PBMs are reviewing the credentials of pharmacy employees. PAAS National® has successfully assisted pharmacies facing Network Termination due to a failure to notify. Notify PAAS right away if you’ve received a Letter of Warning (Contract Violation) leading to a breach of the Provider Agreement.

AmerisourceBergen ThoughtSpot 2021: Navigating Pharmacy Audits Amidst a Pandemic

Pharmacy audits continue to morph as Pharmacy Benefit Managers (PBMs) develop new methods to recoup prescription claims. Understanding the many facets of the audit process, including triggers, trends, and prevention strategies will enable your pharmacy to be more successful in an audit situation.

On Tuesday, August 3, 2021 from 2:00-3:30 p.m. EST, Trent Thiede, President at PAAS National® and Tracie Acosta, Manager of Provider Network Quality Compliance from Elevate Provider Network will be virtually presenting Navigating Pharmacy Audits Amidst a Pandemic in an online CE webinar at the AmerisourceBergen ThoughtSpot 2021.

Time will also be spent discussing the unique challenges immunizations, 340B claims, compounds, and LTC prescriptions present on audits. Takeaways from this session include:

For catching this webinar session and more, visit the ThoughtSpot 2021 website: https://www.wearegnp.com/thoughtspot2021

Webinar: Thriving Against PBM Audits – Audit Trends and PBM Tactics

On June 23, 2021 PAAS National® hosted Thriving Against PBM Audits – Audit Trends and PBM Tactics webinar. PAAS Audit Assistance members have access to the recorded webinar, in addition to many other tools and resources on the PAAS Member Portal.

This webinar reviews:

  • Audit trends across the United States
  • New and persistent ways PBMs are recouping money from community pharmacies, including:
    1. COVID Vaccine Audits
    2. Off-label COVID Treatments
    3. Prescription Requirements
    4. Diabetic Testing Supplies
    5. Insulin Pens

COVID-19 Vaccine Billing Guidance (April Update)

PAAS National® has seen a few COVID-19 vaccine audits since pharmacies began billing and administering within the last few months. This article contains some reminders and updates from our January 2021 Newsline COVID-19 Vaccine Billing Guidance. As a general rule, vaccine claims are lower risk for PBM audit; however, audits are always possible, and you should be prepared with good documentation. PAAS highly recommends creating a placeholder “prescription” with all required elements for your records – many pharmacies already do this when billing for other vaccines under protocol. Additionally, it will be necessary to document the administration through a vaccine administration record as well as provide the patient with an Emergency Use Authorization (EUA) fact sheet (in place of a vaccine information sheet). Be sure to submit the correct quantity, days’ supply, SCC code and CPT code depending on which vaccine you are administering. Please see the chart below for a reference.

The coverage for COVID-19 vaccine may be under the pharmacy benefit (via NCPDP standard) or the medical benefit (via CPT codes). Here is a summary of billing information known to PAAS:

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Pharmacy Benefit* Medical Benefit
Vaccine NDC-11 Billing Quantity & Units Days’
Supply		 Dose 1 Dose 2 CPT Codes Dose 1 Dose 2
Pfizer-BioNTech1 59267-1000-01 0.3 mL 1 SCC-02 to indicate “first dose” SCC-06 to indicate “final dose” 91300 0001A 0002A
Moderna2 80777-0273-10 0.5 mL 1 91301 0011A 0012A
Janssen3 59676-0580-05 0.5 mL 1 N/A 91303 0031A single-dose N/A

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(1) Pfizer BioNTech vaccine has a package size of 1.8 mL and will deliver 6 doses of 0.3 mL

(2) Moderna vaccine has a package size of 5 mL and will deliver 10 doses of 0.5 mL

(3) Janssen vaccine has a package size of 2.5 mL and will deliver 5 doses of 0.5 mL

*NCPDP also recommends that pharmacy claims will need to submit the following for ZERO-COST vaccines:

  1. Professional Service Code (440-E5) of “MA” (Medication Administered)
  2. Ingredient Cost Submitted (409-D9) of $0.00 or $0.01
  3. Incentive Amount Submitted (438-E3) to request payment for administration
    • Effective on March 15, 2021, the Medicare Part B payment rate for immunizers will be $40 to administer each dose of a COVID-19 vaccine
    • The exact payment rate for administering a COVID-19 vaccine can depend on the type of entity that provides the service and will be geographically adjusted based on where the service is provided.
  4. Basis of Cost Determination (423-DN) of “15” (free product or no associated cost)

PAAS Tips:

COVID-19 Vaccine Billing Guidance

The light at the end of the tunnel is approaching as Operation Warp Speed delivered COVID-19 vaccines to healthcare workers and LTC residents in December 2020. There will certainly be bumps in the road, supply chain delays and allocations, which means that most patients will not be able to receive COVID-19 vaccines until mid- to late 2021.

The federal government has pre-paid for millions of vaccine doses and will be distributing them to health care providers at no cost, which means that when government-supplied vaccine becomes available at community pharmacies, you will not have to pay to acquire it. For vaccine doses supplied by the federal government, pharmacies may NOT charge patients for the vaccine itself, but may bill payers for the administration. The federal government has mandated coverage under Medicare Part B, Medicaid and Commercial insurance with no out-of-pocket costs to patients. The CARES Act also provides for reimbursement for uninsured patients through the Health Resources & Services Administration (HRSA).

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Payer Coverage and Billing Considerations
Medicare Part B
  • PHARMACY must enroll as Part B Provider (either as supplier type Pharmacy or Mass Immunizer)
  • Two-dose vaccine administration reimbursement = 1st dose $16.94, 2nd dose $28.39
  • Single-dose vaccine administration reimbursement = $28.39
Medicaid
  • May be covered under pharmacy or medical
  • All programs required to cover – FFS and Medicaid MCO
  • Reimbursement will vary
Commercial
  • May be covered under pharmacy or medical
  • Payers MUST cover it for both in-network AND out-of-network providers
  • Reimbursement will vary
Uninsured
  • Pharmacies may bill HRSA – managed by “OptumPay” (must be contracted) – not the same as OptumRx

The coverage for COVID-19 vaccine may be under the pharmacy benefit (via NCPDP standard) or the medical benefit (via CPT codes). Here is a summary of billing information known to PAAS National® as of December 23, 2020.

Vaccine NDC-11 Billing Quantity Days’ Supply Dose 1 Dose 2
Pfizer BioNTech 59267-1000-01 0.3 mL 1 SCC-02 to indicate “first dose” SCC-06 to indicate “final dose”
Moderna 80777-0273-10 0.5 mL 1

NCPDP also recommends that pharmacy claims will need to submit the following for ZERO-COST vaccines:

  1. Professional Service Code (440-E5) of “MA” (Medication Administered)
  2. Ingredient Cost Submitted (409-D9) of $0.00 or $0.01
  3. Incentive Amount Submitted (438-E3) to request payment for administration (e.g., $16.94 or $28.39)
  4. Basis of Cost Determination (423-DN) of “15” (free product or no associated cost)

*New guidance sent 3/15/2021 and updated article published 4/2/2021, available to members in the PAAS Portal*