All Pharmacies Face Medicare Part A vs Part D Billing Risks, Especially Combo Shops

Pharmacies that service long-term care (LTC) and assisted living facilities (ALF) as well as retail patients, known as “Combo Shops”, may not be aware of the potential recoupment risks from Medicare. PAAS National® wants to inform our members of these risks and how to best avoid them.

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Many times, patients residing in long-term care or assisted living facilities have a temporary stay under Medicare Part A. A change in Medicare coverage status is typically linked to the patient’s admission and discharge dates from a hospital or skilled nursing facility (SNF) stay.

When a patient is covered under Part A, the facility providing the stay is paid for the medications, supplies, and services during the coverage period. This means Medicare Part D will not be responsible for claims billed during that time (Medicare won’t pay under Part A and Part D at the same time). CMS provides Part D sponsors a Long-Term Institutionalized (LTI) report on a quarterly basis. This information is utilized by the plan to identify any misbilled claims due to overlapping Part A coverage. Unfortunately, PBMs do not have the information at the point-of-sale to stop these claims from being billed inappropriately.

It is vital that pharmacies stay in constant contact with facilities prior to billing and delivering prescriptions to ensure there has not been any changes in patients’ Medicare coverage due to an admission. Medications that are delivered to facilities when a patient is “in-patient” (under a Part A stay) should be returned to the pharmacy until the Part A stay has ended. Claims can be billed once again to Part D the day after the last covered day of the Part A stay. Any sooner and the claim would face full recoupment – even if there’s only one day of overlap!

LTC and ALF claims are not the only ones at risk. Prescriptions billed for patients that are on a Part A stay (for use at home) would also fall under this risk. Families and facilities frequently request pharmacies to fill prescriptions in anticipation of discharge. This in theory is a great idea; however, if Part A has already paid for that patient on that day(s), Part D will not pay for duplicate coverage. While difficult to catch, imagine the scenario of a husband being in the hospital (under Part A) and the wife presenting to the pharmacy for prescriptions. Even if the prescriptions are routine refills, they are subject to full recoupment! If the spouse (or an authorized representative) mentions that the patient is in the hospital right now, and they’re on Medicare, you will want to ask more questions before dispensing.

PAAS Tips:

  • Work with facilities to have process in place for them to notify you of a patient’s Medicare status change
  • Have an agreement in place with the facilities you service on how payments can be settled if claims were incorrectly billed to Medicare Part D and subsequently recouped
  • Stay informed for delays of patient discharge and reverse and rebill for appropriate date of dispensing
  • Long-term or Post-acute Care patients’ medications may need to be split-billed when patient is moved from Medicare Part A to Part D
    • Using submission clarification code 19 (Split-Billing) indicates the remainder of the claim being billed is no longer eligible under Medicare Part A stay. This code should only be used in a long-term care setting.
  • Questions asked during medication pick up may assist pharmacies on knowing if, or when, the patient will be discharged
  • See the September 2022 Newsline article, Medicare Part D Long-Term Institutionalized (LTI) Resident Report
  • If you receive a notice from Medicare D for incorrect billing due to Medicare Part A stay, send it to PAAS for information and guidance.

Best Practices for Financial Hardship Waivers

PAAS National® analysts have noticed an increase in PBM audits focusing on copay collection. These audits requested a copy of the pharmacies’ policies and procedures addressing copay collection and financial hardship.

In general, PBMs require that pharmacies collect copays at the point of sale and retain a “financial paper trail” to prove such collection took place. Pharmacies will be asked to provide check copies (front and back), credit card receipts with authorization numbers and bank deposit slips as evidence of receiving cash from patients. Pharmacies may also be required to provide Accounts Receivable balances and Coordination of Benefits billing information, where applicable.

If patients are unable to pay their copay and the pharmacy waives or discounts the copay due to financial hardship, then you must have a robust written policy explaining the details on how such a policy is operated.

In general, financial hardship policies should include the following:

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  1. A written policy, with clear guidelines on application process, required documentation to establish patient eligibility and standard benchmarks of need.
  2. Patients must complete a written application and sign/date as confirmation of truthfulness and accuracy.
  3. Patients must provide objective documentation to substantiate their need is legitimate (possibly from all earners in the household). Examples may include monthly income documentation such as pay stubs, social security checks, unemployment checks, and pension distributions as well as assessments of other assets.
  4. Pharmacies must use a standard benchmark to determine financial need such as a multiple of the HHS Poverty Guidelines, which are updated annually, take into account the number of persons in household, and vary between Alaska/Hawaii and the 48 contiguous states.
  5. Pharmacies must reassess eligibility at a designated frequency (e.g., annually).
  6. Pharmacies must not advertise the availability their financial hardship program and should use as a last resort only after considering alternative options such as therapeutic alternatives that may be less expensive for the patient and/or a monthly payment plan (via an Accounts Receivable or “house charge”).

Be aware that insufficient copay collection (or evidence thereof) is one of the leading causes of network pharmacy termination.

PAAS Tips:

  • Caremark provides the most explicit expectations for pharmacy financial hardship programs in section 3.03.09 of their Network Pharmacy Provider Manual.
  • PAAS National® FWA/HIPAA compliance members can provide section 4.1.5 Copay Collection in their FWA/HIPAA Policy & Procedure Manual.
  • Patients who qualify for Medicaid and Medicare Part D Low Income Subsidy have already provided financial documentation to government agencies and proven their financial need.
  • Federal laws prohibit pharmacies from denying service to Medicaid patients who cannot pay 

PBM Audits: Letters to Patients for Prescription Verification

Pharmacies often see PBM audit letters requesting documentation to validate paid claims, but not very many see letters sent to their patients.

PBMs have increasingly conducted patient (and prescriber) verifications, in the form of letters sent, to validate claims billed by your pharmacy. These letters are often initiated as part of a PBM investigation where they are searching for fraud, waste, or abuse– if there are inconsistencies between the information provided by the pharmacy, patient, and prescriber this can be a sticky situation.

Letters to patients typically consistent of basic questions like:

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  1. Have you received prescriptions from XYZ pharmacy? If yes, by what method? (in-store pickup, mail, home delivery by pharmacy employee)
  2. Have you been treated by XYZ prescriber? If yes, by what method? (virtual, phone, in-person)

Letters often include an itemized list of claims billed by the pharmacy where the questions may include:

  1. Did you request the pharmacy to fill this prescription?
  2. Did you receive this prescription?
  3. Did you pay the copay amount listed?

Patients may fail to respond to these letters for a variety of reasons, including: not recognizing the PBM name (and afraid of a scam), not remembering the details (and are afraid to answer incorrectly) or not being able to respond (e.g., literacy issues or changes in address).

PAAS National® has received audits where PBMs will issue audit results to the pharmacy that include recoupments for patient denials of receipt or paying copay where the pharmacy has never been asked to provide signature logs or proof of copay collection – these unfair conclusions are drawn before the pharmacy has had a chance to provide objective evidence to defend themselves.

PAAS Tips:

  • If your patients are in receipt of a PBM letter, encourage them to respond
    • PBMs have been known to interpret a non-response as a “denial”
  • Providing copies of the original documentation may be enough to overturn the findings; however, certain situations dictate signed affidavits
  • See our April 2022 Newsline article, Prescriber Denial of Prior Authorization Can Lead to Recoupment for additional insight on letters to prescribers

Avoid the Creon® Chargeback Catastrophe by Following THIS Billing Rule

Creon® is indicated for the treatment of exocrine pancreatic insufficiency due to cystic fibrosis, chronic pancreatitis, pancreatectomy, or other conditions. Claims for these pancreatic enzymes find themselves on audits year after year, and the audit risk has just increased as …

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ALL strengths of Creon® are now required to be stored and dispensed in the original container. This change was published in the FDA product label, updated October 12, 2023. The previous package insert (effective June 2, 2022) only required the 3,000 USP units of lipase to be stored and dispensed in the original container.

With this change to the package labeling, pharmacies MUST be sure to bill and dispense all strengths of Creon® in quantities that correspond with a full bottle, or multiples of a full bottle. Claims billed for quantities not evenly divisible by the quantity in a full bottle are easy for a PBM’s algorithm to flag for audit. If audited, these claims will likely face a partial or full recoupment with very little chance of a successful appeal. One example of language explaining this discrepancy can be found in the Fourth Edition (Version 4.1) of the 2023 OptumRx® Provider Manual, which reads “OptumRx reserves the right to recover payment for claims dispensed outside the manufacturer’s FDA-approved storage and dispensing recommendations. Claims for products where the manufacturer’s original package is designed and intended to be dispensed to patients without repackaging due to stability and patient safety concerns, may be subject to review and recovery. Pharmacies are advised to follow FDA requirements.”

Claims billed for LTC patients or patients enrolled in a medication synchronization or medication packaging program are NOT EXEMPT from the FDA rules to store and dispense medications in their original containers. In other words, these medications should NOT be put in bubble packs, blister cards, BINGO cards, strip packaging, medication boxes, or other compliance packaging and must only be dispensed by the pharmacy in their original containers.

PAAS Tips:

  • Dispense ALL strengths of Creon® in their original container
  • Print and display an updated copy of the Dispense in Original Container Chart
  • Confirm the prescription has calculable directions, such as the number of meals AND number of snacks, OR the total number of capsules per day the patient can take and contact the prescriber for clarification if the prescription is received with insufficient directions
    • Remember to document the clarification with a clinical note including the date of the call, the name and title of whom you spoke with, the clarification, and your initials
    • Be sure clinical note is retrievable and visible to the reviewer during an audit
    • Ensure the patient’s label is updated with the more specific directions prior to dispensing
  • If a prescription is received for a quantity LESS THAN what is in a full bottle:
    • Contact the prescriber or their agent to update the written quantity on the prescription to 70, 100, or 250 capsules (as applicable) and document with a clinical note
    • Or increase the dispensed amount to a sufficient quantity by borrowing capsules from an authorized refill; this is only an option in states where pharmacists have the legal authority to consolidate refills

Calculating Days’ Supply – Pancreatic Enzymes

Auditors target pancreatic enzyme prescriptions like Creon® and Zenpep® due to high cost and ambiguous directions.

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Directions are often vague and only indicate how many capsules to be taken with meals and snacks. Pharmacies can generally assume three meals, but if the prescription does not specify how many snacks a patient is allowed, or the maximum number of capsules per day, an auditor will look to recoup for “non-specific directions.”

The solution to this problem is contacting the prescriber at the time of fill to clarify the number of snacks or the maximum daily dose and make a clinical note on the prescription. This information must also be added to the patient label to avoid possible recoupment for a “misfill” on audit.

PAAS Tips:

Albuterol HFA Inhaler Substitution Refresh

There have been many new albuterol HFA NDCs released since the June 2020 article, First AB-Rated Generic for Proventil® HFA Approved, and since albuterol inhaler substitutions require an extra level of consideration due to not all NDCs being equivalent, a refreshed chart was in order.

The chart below shows albuterol products grouped into their respective Therapeutic Equivalence (TE) Code category – AB1, AB2, or BX. As a reminder, substitution can occur at the pharmacy level if the substitution involves two therapeutically equivalent products and is allowed per state law.

Example: AB1 inhaler 6.7 gm Proventil® would be able to be substituted for AB1 inhaler 6.7 gm Sandoz albuterol HFA. 

If a substitution to a non-equivalent is required, it would be necessary to contact the prescriber and make a corresponding clinical note documenting the conversation.

Example: Prescription written for AB1 inhaler 6.7 gm Proventil® but PBM rejects claim stating an AB2 inhaler such as 8.5 gm Lupin Pharmaceuticals albuterol HFA is required. 

Refer to the article linked above for examples of how to handle substitutions based on how a prescription is written.

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Product NDC Labeler Package Size FDA Application Number Brand or Generic TE Code
Proventil® HFA 66758-0959-85 Sandoz 6.7 gm N020503 Brand AB1
Albuterol sulfate HFA 00054-0742-87 Hikma Pharm. A207085 ANDA Generic
Albuterol sulfate HFA 00781-7296-85 Sandoz N020503 NDA Authorized Generic
Albuterol sulfate HFA 69097-0142-60 Cipla A209959 Generic
Albuterol sulfate HFA 72572-0014-01 Civica A209959 Generic
Albuterol sulfate HFA 76282-0679-42 Exelan Pharm. A209959 Generic
ProAir® HFA 59310-0579-22 Teva Resp. 8.5 gm N021457 Inactive; manufacturing ceased Oct. 2022 AB2
Albuterol sulfate HFA 00093-3174-31 Teva Pharm. N021457 NDA Authorized Generic
Albuterol sulfate HFA 45802-0088-01 Padagis A203760 Generic
Albuterol sulfate HFA 68180-0963-01 Lupin Pharm. A209954 Generic
Ventolin® HFA 00173-0682-20 GSK 18 gm N020983 Brand BX
Albuterol sulfate HFA 66993-0019-68 Prasco Labs N020983 NDA Authorized Generic
ProAir RespiClick® 59310-0580-20 Teva Resp. 1 EA N205636 Single Source Brand
ProAir® Digihaler® 59310-0117-20 Teva Resp. N205636 Single Source Brand

USP 800 – The Struggle is Real…

Are you compliant with USP 800? While USP 800 became official on December 1, 2019, it was informational only and not compendially applicable. With the recent updates to USP 795, Nonsterile Compounding and USP 797, Sterile Compounding in November 2022, USP 800 was effective as of November 1, 2023.

USP 800 is not just for compounding pharmacies as it defines the quality standards for the safe handling of hazardous drugs in all healthcare settings, with the goal to minimize exposure to healthcare personnel, the patients in your pharmacy, and to the environment.

You might still be asking, does my pharmacy need a USP 800 program?

The answer is yes! All healthcare settings, including community pharmacies, should now have a “handling of hazardous drugs” program in place and while, USP itself is not an auditing entity, there are other agencies that may audit including OSHA, EPA and most likely State Boards of Pharmacy, many of which have already committed to doing so. The safe handling of hazardous drugs is now considered a “standard of practice” so implementation is essential to protect the health and safety of your employees.

Are you struggling with the multitude of requirements?

This isn’t one of those “throw it together in an afternoon” type of programs. PAAS can help! PAAS’ customized USP 800 Compliance Program provides:

  • A detailed Program Guide walking you through everything from the why to the how
  • Annual web-based training to keep the team up to date including a quiz to assess competency
  • A USP 800 Compliance Program Policy & Procedure manual tailored to the unique needs of your pharmacy with minimum interruption to workflow
  • An easy-to-use Assessment of Risk (AoR) tool to help you create custom containment strategies for each drug and its unique dosage form.

Call (608) 873-1342 to sign up for PAAS’ USP 800 Compliance Program and you can immediately get started on setting up your program in hours, not days!

You’ve Got Mail! Post-COVID-19 Mailing & Delivery Considerations

After three years of a Public Health Emergency (PHE) due to COVID-19, the Department of Health and Human Services (HHS) allowed the PHE to expire May 11, 2023. With the end of the PHE came the end of most PBM concessions, including those made in relation to mailing and delivery of medications. Therefore, re-training staff on the importance of adhering to PBMs’ signature, mailing, and delivery requirements will help curtail audit risk.

The remainder of this article will focus on adherent mailing and delivery practices.

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The largest PBMs (Caremark, Express Scripts, OptumRx, Humana, Prime Therapeutics, MedImpact), allow for delivery of prescriptions. However, OptumRx will only allow W-2 employees of the pharmacy to complete deliveries within a 100-mile radius of the pharmacy, prohibiting delivery of their medications via a contracted delivery service. Pharmacies who utilize a contracted delivery services (versus a common carrier like UPS, FedEx or USPS) must exercise due diligence to ensure they are HIPAA compliant and have undergone Fraud, Waste, & Abuse annual training in addition to being checked on the OIG & GSA exclusion lists.

PBMs are more restrictive with allowing prescriptions to be mailed. Caremark will allow mailing for up to 20% of the monthly claims submitted under their “Retail Pharmacy” definition. Anecdotally, Express Scripts has some degree of tolerance for mailing; however, it varies by situation (e.g., distance, drugs being dispensed and frequency). Humana, who usually completely restricts mailing prescriptions, is allowing their PHE concession on mailing prescriptions to continue until January 1, 2024. Consider this during open enrollment or put a plan in place to set patient expectations come 2024, if necessary.

PAAS Tips:

  • Check your state Medicaid requirements, as they may have had differing concession end dates
  • If your pharmacy is mailing out of state, check that state’s Board of Pharmacy for any licensing requirements
  • Be mindful with automatic mailing requirements, see September 2023 Newsline article, Automatic Prescription Refill Concerns
  • If you are seeking a compliance program that has exclusion checks, annual FWA/HIPAA training, and a one location where you can download all certificates and signatures at your fingertips, call PAAS (608) 873-1342 to add PAAS’ FWA/HIPAA Compliance Program. It’s more than training and exclusion checks – Attest with Confidence!

Fair Access for All: The Proposed Rule’s Potential to Strengthen Anti-Discrimination in Pharmacies

The Biden-Harris Administration is continuing to bolster the importance of equal access to health care and human services for individuals with disabilities through a new proposed rule. The Discrimination on the Basis of Disability in Programs or Activities rule will update and clarify the obligations stated in the original Section 504 of the Rehabilitation Act of 1973, enacted almost fifty years ago. Under Section 504, individuals with disabilities are afforded equal access to any federally funded program or activity and cannot be discriminated against due to their disability. Within the article released by the HHS Press Office on September 7, 2023, it states that the COVID-19 pandemic “shone a spotlight” on areas of discrimination, such as individuals being refused medical treatment due to their disability, inability to access medical equipment and websites, and being forced to receive treatments only in institutional settings. As a result, the Administration for Community Living along with the Office for Civil Rights suggested the following changes be made to the current implementation of Section 504:

  • Decisions on medical treatments cannot be based on biases or stereotypes, such as judgements that the individual will be a burden on others or beliefs that one’s life is less valuable
  • Clarifies the obligation health care and human services must provide access for web, mobile, and kiosk to all individuals
  • Establishes enforceable standards for access to medical equipment
  • Prohibits the use of value assessment methods that determine lower value on life-extension for people with disabilities when used to determine an individual’s access to aids, benefits, and services

It is becoming increasingly apparent that cultural competency and the ability to provide equivalent services across all patient populations is imperative. The first step to adhering to this new standard of care is ensuring staff has undergone Cultural Competency Training. Login to the PAAS Member Portal to view the on-demand webinar “Does My Pharmacy Really Need Cultural Competency Training?” for additional information.

Call PAAS National® (608) 873-1342 to add PAAS’ Cultural Competency Training to your membership.

Advances in Respiratory Syncytial Virus (RSV) Prevention

There are two RSV vaccines FDA-approved for people ages 60 years and older – AbrysvoTM and Arexvy®.

Trade name Manufacturer NDC Quantity Suggested Days’ Supply Time to administer
AbrysvoTM Pfizer 00069-0344-01 1 EA 1 day supply Use within 4 hours after reconstitution
Arexvy® GSK 58160-0848-11

CDC recommends that adults ages 60 years and older may receive RSV vaccination, using shared clinical decision-making (SCDM). This means that health care providers (including pharmacists) should talk to these individuals about whether RSV vaccination is appropriate for them.

  • Most vaccines recommendations are considered routine, catch-up, and risk-based where the default decision is to “vaccinate, unless contraindicated”.
  • There are a small number of vaccines including RSV and Hepatitis B that are recommended under SCDM where there is no default.
  • The Advisory Committee on Immunization Practices (ACIP) explains how SCDM differs from routine, catch-up, and risk-based immunization recommendations here.

Because of the SCDM workflow, the immunization action coalition (immunize.org) has not created a standing order template or screening checklist.

PAAS Tips:

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  • Medicare covers RSV vaccine under Part D
  • Administration to patients less than 60 years of age is off-label, not recommended by CDC, and very high audit risk
    • Important exception: As of September 22, 2023 CDC recommends that pregnant people obtain AbrysvoTM (only) between weeks 32-36 of pregnancy to reduce risk of RSV hospitalization for babies within first six months after birth. This recommendation is not in published/printed ACIP immunization schedule as of this writing; however, is an “addendum”.
  • Like all vaccines, pharmacies should maintain proof of administration as well as authorization to administer which may include a patient-specific prescription or a collaborative practice agreement/protocol.
    • The RSV vaccine is not officially part of published ACIP immunization schedule as of this writing, so pharmacists may not have independent prescribing authority as per state law or PREP Act.
    • While PAAS has not seen audits requesting documentation of SCDM, pharmacies should consider documentation of their conversation as part of the vaccine administration record