Be Prepared for Audits on Pharmacist-Prescribed Paxlovid

The FDA released a statement on July 6, 2022, which expanded the Emergency Use Authorization (EUA) of PaxlovidTM (nirmatrelvir and ritonavir) “to authorize state-licensed pharmacists to prescribe PaxlovidTM to eligible patients, with certain limitations to ensure appropriate patient assessment and prescribing of PaxlovidTM.” As pharmacies across the country are gaining access to this anti-viral COVID-19 therapeutic agent, it is important to understand the specifications of the EUA and verify your pharmacy has a process in place to capture and maintain documentation supporting the validity of the claim, in the event these claims are audited. Think to yourself, would an auditor have irrefutable evidence that this patient qualified for treatment and that the pharmacist-prescribed PaxlovidTM was provided pursuant to EUA guidelines?

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Patient Qualifications EUA Limitations for Pharmacists to Prescribe PaxlovidTM Additional Documentation to Maintain
Must meet ALL:
·         ≥ 12 years old
·         ≥ 88 pounds (40 kg)
·         Positive SARS-CoV-2 viral testing
·         Symptom onset was within ≤ 5 days
·         Mild-to-moderate coronavirus disease
·         At high risk for progression to severe COVID-19, including hospitalization or death
Must meet ALL:
·         Sufficient medical records < 12 months old or consultation with health care provider to assess renal (kidney) function
·         Sufficient medical records < 12 months old or consultation with health care provider to assess hepatic (liver) function
·         Sufficient information is available (via access to health records, patient reporting of medical history, or consultation with health care provider) to obtain a medication list to check for potential drug interactions
PAAS National® analysts suggest ALL of the following:
·         Patient-specific placeholder hardcopy referencing the pharmacist’s authority to prescribe (e.g., EUA and PREP Act, standing order, or collaborative agreement, etc.) and details of the prescription
·         Proof patient met all qualifications
·         Proof pharmacist verified kidney function, liver function, and had sufficient information to assess potential drug interactions
·         Vaccine administration record
·         Date/version of the Fact Sheet for Patients, Parents, and Caregivers EUA of PaxlovidTM for COVID-19 that was given

PAAS Tips:

  • Limitations on authorized use of PaxlovidTM:
    • Not authorized for the treatment of patients requiring hospitalization due to severe COVID-19
    • Not authorized for pre-exposure or post-exposure prophylaxis to prevent COVID-19
    • Not authorized for use longer than five consecutive days
  • Kidney and liver function, as well as the patient’s current list of medications, must be assessed to determine if PaxlovidTM is an appropriate therapy for the patient and if the dose needs to be reduced
  • For additional details refer to the:
    • July 6, 2022, Emergency Use Authorization for Paxlovid
    • Fact Sheet for Healthcare Providers: EUA for PaxlovidTM
    • Fact Sheet for Patients, Parents, and Caregivers: EUA of PAXLOVIDTM for COVID-19
    • List of medical conditions and factors associated with increased risk for progression to severe COVID-19 as per the CDC

Be Audit Ready! Clinical Notes and Annotations: What Documentation is Essential for Audit?

Many pharmacies receive hundreds of prescriptions every day, and inevitably, some of those prescriptions will contain errors, omissions, or just be confusing enough to require clarification with the prescriber’s office. When these situations occur, make sure you have good documentation of the conversation with the prescriber’s office to successfully pass an audit that may occur years later.

Documentation that should be included in any clinical note are as follows:

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  • Date (and preferably time)
  • Name and title of who you spoke with (some PBMs do not accept “per MD” or “per nurse”)
  • The details of the clarification/conversation
  • Your name or initials

This documentation should either be noted directly on the prescription or within your dispensing software. For clinical notes on controlled substance prescriptions received electronically, the clinical note must be made and retained electronically per 21 CFR 1311.200(f). Any notations made must be visible to the auditor at the time of audit.

Clarifications to a prescription should be made prior to dispensing. PAAS National® has seen clinical notes invalidated when the pharmacy prints an image of a prescription for audit that shows the printed date, then proceeds to hand-write a clinical note on the prescription with a date prior to the printed date of that prescription. The auditor assumes the pharmacy “made up” the clinical note after the audit notice was issued and will expect the pharmacy to prove the clinical note was valid on appeal.

PAAS Tips:

  • Remember to always document the When, Who You Spoke With, What Was Discussed, and Who Documented elements of a clinical note
    • A custom ink stamp containing these elements may be made to help ensure pharmacy staff documentation is complete
  • Documentation should be included on the original prescription or electronically
  • Documentation should be visible to the auditor at the time of audit
  • Any notations made on previous prescriptions that are still valid should be carried forward to the new prescription
  • Submission clarification codes and Drug Utilization Reviews must be clearly documented with details to support the override given
  • Professional service code “M0” requires consultation with the prescriber and documentation to support the conversation
  • If the patient directions are clarified, ensure the patient label is updated prior to dispensing to reflect the new directions
  • Verbal clarifications do not change the origin code of the prescription
  • See our March 2021 Newsline article, Are You Documenting DUR and Submission Clarification Codes?
  • See our October 2021 Newsline article, Prescriber Statements Requested to Validate Incomplete Clinical Notes

A Day in the Life of a PAAS National Analyst – Audits, Billing Questions and FWA/HIPAA support

With over 200 years of combined pharmacy experience and over 50 years of dedicated audit assistance experience, this PAAS National® analyst team is the best in the industry.

The PAAS Analyst team is made up of five pharmacists and three certified pharmacy technicians. Their job day in and day out is to be a member’s resource in:

Answering filling and billing questions

PAAS provides proactive education – a guiding light steering community pharmacies from trouble. Keep in mind the prescription claims you submit today may be the subject of an audit conducted a year or two from now. Audit-proof your pharmacy today, bill it correctly, and avoid future recoupments. PAAS can provide information on new wrinkles and requirements to safely bill a prescription.

FWA/HIPAA compliance guidance

PAAS Fraud, Waste & Abuse and HIPAA Compliance program members can get guidance to help avoid being caught off guard. Having a HIPAA expert on your side to navigate through the turbulent waters of a data breach or internal fraud investigation can help ensure that all appropriate steps are taken, and deadlines are not missed.

Preparing you for on-site and virtual audits

If you receive notification, your first step is to get the audit notice to PAAS. Your all-inclusive membership means there are no hidden fees or limits to the number of audits we provide assistance on. After receiving your notice, a PAAS Analyst will reach out to you within 1-2 business days for a customized, pre-audit consultation to guide you on next steps. PAAS is here to support you! Make PAAS part of your audit process, every time.

Review your prescriptions for desk audits

When reviewing prescriptions in preparation for an audit, it is helpful to reference the self-audit tool. Every prescription has required information that needs to appear on the original hard copy. Ask a PAAS analyst for assistance with your next audit to confirm you have the required information. If you receive an audit notification, your first step is to get the audit notice to PAAS.

Work with you on your audit appeals

Our team members are highly trained experts, here to help you! Even though it is best to involve PAAS from the very beginning with audits big or small, we provide guidance regardless, and will guide you through an appeal to help give you the best chance at favorable results.

Could You Be Giving Vaginal Creams Away for Free?

PAAS National® analysts continue to see claims for Premarin® and Estrace® creams being audited and recouped. Pharmacies not calculating the accurate days’ supply are in jeopardy of refilling too soon. These early refills will be taken back during audit which means the pharmacy is basically handing the medication out for free.

Since these vaginal creams only come in one package size, instructions rarely support the days’ supply to be 30. This makes your claims easy targets if you are consistently defaulting the days’ supply. Software default fields, plan limits, or data entry errors should all be reviewed to ensure you have safeguards in place to prevent losing these claims.

Product Package Size Applicator Measurements
Estrace® (estradiol) 0.01% vaginal cream 42.5 gram 1 to 4 grams
Premarin® (conjugated estrogens) vaginal cream 30 gram 0.5 to 2 grams

PAAS Tips:

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  • PBMs look for calculable instructions (e.g., grams per application or max grams per week/month)
  • Instructions for “pea-sized amount” or “X number of inches” are not sufficient for audit purposes
    • For a pea-sized amount, work with prescribers to clarify if 0.25 grams would be appropriate (half of a finger-tip unit)
  • Clarify any instructions that do not provide enough information to accurately calculate days’ supply
  • See our June 2021 Newsline article, Self-Audit Series #5: Topical Prescriptions
  • Always submit an accurate days’ supply first, as many plans now have overrides for exceeding plan limits
  • Refer to our Can You Bill It As 30 Days? in our Tools & Aids section if plan limits are exceeded
  • Self-audit your vaginal creams for accurate days’ supply and appropriate instructions
  • Vaginal creams are not recommended to be part of a patient’s med sync program – refill upon request only

Medication Synchronization: Possible Concerns

Medication synchronization programs have many benefits for community pharmacies (and your patients) – improved workflow of your team, leaner “just in time’ inventory replenishment and fewer patient trips to the pharmacy.

Unfortunately, medication synchronization also poses a threat of waste or abuse if it goes off the rails. PAAS National® analysts have noticed PBMs auditing for refills of high-cost maintenance medications that seem to be filled especially early every month (e.g., every 23 days on a 30 days’ supply) – remember that PBM audit algorithms are looking for FWA conducted by bad actors and will use data analysis as a reason to audit your pharmacy if the claims look suspicious.

Most independent pharmacies can tell numerous stories about patients bringing in large quantities of unwanted or unused medications that they received from a PBM mail-order pharmacy because the refills just kept coming. In fact, Express Scripts was named in a recently unsealed False Claims Act lawsuit from 2019 due to automatic refills of medications for TRICARE beneficiaries. The complaint states that Express Scripts set up 90-day supply medications for refill on day 60 (of 90) which represented only 67% utilization. Over time these early refills accumulated such that over a one-year period patients would have received nearly 500 days’ worth of medication. Surely, these extra fills benefitted the dispensing pharmacy, but at an inappropriate cost to patients and plan sponsors.

See the tips below to ensure that your medication synchronization program will stand up to PBM scrutiny and keep you out of harm’s way.

PAAS Tips:

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  • Be aware, State pharmacy regulations may prohibit, or require additional documentation for, automatic refill programs
  • Payer restrictions may also apply (e.g., Medicare B/D and Medicaid)
  • Automatic mailing and delivery of prescriptions often have additional requirements
  • Best Practices for Med Sync include:
    • Having patients opt in for med sync (preferably with a retrievable signature to support enrollment documentation)
      • Consider annual reverification
    • Cycling prescriptions at ≥ 90% utilization
    • Avoid putting bulk items like inhalers, insulin, eye drops or topicals on med sync
    • Do not put “as needed” (aka PRN) or controlled substance medications on med sync

DMEPOS Mini-Series #4 – Urological Supplies: Intermittent Catheters

If you are a Medicare Part B supplier, then you are aware that billing Medicare B is quite different than billing other payors, and consequently, can be incredibly challenging for pharmacies. Being able to produce all the required documentation upon an audit, and making sure that the documentation meets Medicare Part B requirements, is a daunting task.

Medicare performs post-payment medical reviews on intermittent catheters due to having a high, sustained error rate. The top errors are:

  • invalid orders or missing documentation to support the item is reasonable and necessary
  • no clinical documentation received
  • invalid proof of delivery
  • NPI on claim is not the ordering physician

Follow the tips below to be prepared in case of an intermittent urinary catheter audit.

PAAS Tips:

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  • Required Documentation for all DMEPOS items – See our April 2021 Newsline for more details
    • Standard Written Order
    • Proof of refill request
    • Proof of delivery
    • Medical Records
  • Coverage Criteria for Intermittent Catheterization
    • Beneficiary must have permanent urinary incontinence or retention
    • “Permanent” is defined as a long and indefinite duration of at least three months
    • The impairment is not expected to be surgically or medically corrected within three months
    • The beneficiary or caregiver can perform the procedure
    • For each episode, Medicare will cover:
      • One catheter: A4351 (straight tip catheter) or A4352 (coude or curved tip catheter) and an individual pack of sterile lubricant A4332 OR
      • One sterile intermittent catheter kit: A4353
        • Must meet one of the following:
          • Nursing facility resident
          • Immunosuppressed
          • Radiologically documented reflux
          • Pregnant female with spinal cord injury with neurogenic bladder (for duration of pregnancy only)
          • Had at least 2 urinary tract infections (UTIs) within 12 months while on sterile intermittent catheterization using A4351/A4352 and sterile lubricant A4332
        • Maximum quantity of intermittent catheterization supplies per month is two hundred for codes A4332, A4351, A4352 and A4353
        • Medical necessity of coude (curved-tip) catheters must be supported by documentation in the medical record – use of a coude tip catheter in female beneficiaries is rarely reasonable and necessary
        • Urological supplies are an exception to requiring proof of continued need. Once the initial medical need is established, ongoing need for urological supplies is assumed due the permanent condition
      • Please reference the following helpful links when billing intermittent catheters
        • Urological Supplies LCD and Policy Article
        • Documentation Checklist for Urological Supplies: Intermittent Catheters

Metformin ER – Can I Substitute?

Many pharmacies struggle with identifying which metformin ER product they can dispense or substitute. There are three different strengths and three different extended-release mechanisms. The FDA uses Therapeutic Equivalency (TE) codes to show which generic products can be substituted for a specific brand name. When there are multiple branded versions of an identical active drug ingredient, form, and route of administration, then the FDA must assign each brand an additional identifier such as AB, AB1, AB2 and AB3. The brand names below are different due to their extended-release mechanisms. Generic versions may only be substituted for the brand with the same TE code.

Brand Name Strengths (mg) FDA Orange Book

TE Codes

Extended-Release Format
Glucophage XR® 500, 750 AB, AB1 Dual hydrophilic polymer system
Fortamet® 500, 1000 AB2 Single-Composition Osmotic Technology (SCOT)
Glumetza® 500, 1000 AB3 Gastric Retention Technology

For example, if you receive a prescription for Fortamet® 1000 mg, you may dispense with the brand name product or a generic formulation with a TE code of AB2

PAAS Tips:

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  • PAAS has seen countless PBM audits for metformin ER products due to the substantial price differences
    • Fortamet®, Glumetza® and their TE generics are higher risk for audit due to their higher cost
  • It may be appropriate to switch patients for clinical reasons, including side effects – for audit purposes, consider documenting the rationale on the hard copy
  • Be aware that a PBM may require clarification from the prescriber when dispensing the higher cost metformin ER products
  • Use the FDA orange book and/or your wholesaler database to identify the TE codes of various manufacturers
  • If a prescription is written for generic metformin ER, the pharmacy should clarify which “version”
    the patient has been on or which “version” the prescriber prefers and notate on the prescription
  • If you need to substitute between formulations that have different TE codes (e.g., AB1 and AB2), the pharmacy will need to obtain prescriber approval and document a clinical note on the prescription

LIVE WEBINAR AUGUST 17th: Understanding Interchangeability with Prescription Biologics

Join President of PAAS National®, Trenton Thiede, PharmD, MBA for a LIVE webinar “Understanding Interchangeability with Prescription Biologics” on August 17, 2022 from 2-2:45pm CT as he discusses:

  • The background and terminology associated with biologics
  • How to identify and recognize unbranded biologics
  • Currently approved interchangeable biologics
  • The FDA Purple Book as a resource
  • How to approach new biologic prescriptions

We will allow for some Q&A at the end of the webinar. If you would like to submit questions prior to the webinar, please click here.


PAAS Audit Assistance members will have access to a recording on the PAAS Member Portal if they are unable to attend the live event.

DMEPOS Targeted Probe and Educate Program – Process Improvement Plan

In the October 2021 Newsline article CMS Resumes Targeted Probe and Educate Program to Improve Billing Accuracy and Reduce Claim Denials and Appeals available to PAAS Audit Assistance members on the Member Portal, PAAS National® analysts provided details about Medicare’s Targeted Probe and Educate Program (TPE). Since then, there has been a sharp increase in the number of TPE audits on diabetic testing supplies. Many pharmacies have already received an initial 10-claim “probe”, and some have moved on to round one, an evaluation of an additional 20 to 40 claims. At the end of round one, the pharmacy will receive a results letter with:

  • their assigned error rate,
  • a table summarizing the types of deficiency categories flagged in the round,
  • an itemized list of claims showing deficiencies found, and
  • notice as to whether they will be moving on to a second round (of an additional 20 to 40 claims).

Below are some of the commonly flagged deficiency categories:

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Sample of Deficiency Category Sample of Deficiency Descriptions
Medical Records ·         Claim not found to be medically necessary by the payer

·         Missing medical records to support the claim/service provided

·         No medical records were received

·         The medical records lack sufficient information concerning the beneficiary’s condition to determine that the medical necessity coverage criteria were met

Modifier ·         Claim billed with incorrect modifier
Standard Written Order ·         Documentation submitted does not contain a valid order

·         The order is missing an item description

·         The order is missing a valid prescriber’s signature

System Denial ·         The service/product is only covered when a qualifying service/procedure has been received and covered and the qualifying service/procedure has not been received/adjudicated

·         The product/service was partially or fully furnished by another provider

High Utilization or Utilization ·         Medical records and/or beneficiary testing logs do not meet Local Coverage Determination (LCD) requirements for billing over-utilization amounts

·         Payment for supplies billed above normal policy usage is denied due to lack of documentation to support that they are reasonable and necessary

Pharmacies with deficiencies will need to schedule an educational conference call within five business days of receiving their results letter and will be strongly urged to attend online webinars offered through their DME Medicare Administrative Contractors (MAC) – both live and on-demand webinars are available. If the pharmacy has been selected to move onto the second round of claim reviews, there will be at least 45 days between the educational session and the start of the second round.

Lastly, pharmacies may be required to write and submit a Process Improvement Plan (PIP) to address each of the deficiency categories flagged. Some things to consider with a PIP:

  • Each individual claim will not be addressed in the PIP but rather the category as a whole. Pharmacies will still have a chance to submit additional supporting documents during the standard redetermination process once the overpayment demand letter is received, but that is a separate process from the PIP.
  • Pharmacies must first determine the root cause of the deficiency in order to adequately outline the problem in the written PIP.
  • Once a root cause is determined, develop a solution that is feasible, effective, and within the pharmacy’s budget.
  • Pharmacies must set an implementation date that is reasonable, but sooner rather than later.
  • A well-designed PIP must also have a method to monitor the improvements to determine if they are working as designed.
  • A pharmacy staff member must be assigned to the PIP. That person is responsible for carrying out the changes and following through on the monitoring process.
  • Pharmacies must submit their PIP(s) for the DME MAC to review. If the PIP is determined to be unsatisfactory, the pharmacy will receive recommendations on how to improve their proposed PIP.
  • An optional PIP form is available through the CGS® website for suppliers to utilize to ensure each element of the PIP is met.

PAAS Tips:

DMEPOS Mini-Series #3 – Diabetic Test Strips

If you are a Medicare Part B supplier, then you have likely had an audit on diabetic test strips. Billing Medicare Part B is quite different than other payors, and consequently, can be very challenging for pharmacies. Being able to produce all the required documentation upon an audit, and making sure that the documentation meets Medicare Part B requirements, is a daunting task. Follow the tips below to be prepared in case of a test strip audit.

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Standard Written Order (SWO)  

The SWO must include the following six elements:

  • Beneficiary’s name or their Medicare Beneficiary Identifier (MBI)
  • Date of the order
  • General description of the item(s) – HCPCS code, a HCPCS code narrative, or a brand name/model number
  • Quantity to be dispensed
  • Practitioner’s name or NPI
  • Practitioner’s signature
  • While frequency is no longer a required order element, the SWO does require Quantity to be Dispensed for those items where more than one (1) item is dispensed or where dispensing occurs on a periodic basis (e.g., dressings, drugs, supplies, etc.). Note also that while the SWO has a limited number of required order elements, suppliers/providers are permitted to add elements that may provide clarity for issues such as length of need, frequency of use, dosage form/strength, refills frequency, etc.

Medical Records

  • Best practice would be to obtain medical records prior to billing to ensure:
    • A covered diagnosis
    • Testing frequency
    • Continued need and use
    • Signed by the treating practitioner


  • Bill only the “Medicare/Medicaid” version of strips
  • Verify the NDC being billed is for the correct package size
  • Attach the correct modifier whether patient is on insulin (KX) or not on insulin (KS)
  • Attach the “CR” modifier (catastrophe/disaster related) and “COVID-19” in the claim narrative if any of the following apply:
    • A signature is not able to be obtained on a proof of delivery
    • Clinical indications are not met for respiratory, oxygen, infusion pump and CGM
    • There is not a face-to-face in person encounter
    • Billing more than a 30 days’ supply for immunosuppressives, oral anticancer, IVIG and enteral nutrition

Dispensing/Proof of Delivery

  • Must include the following six elements:
    • Beneficiary name
    • Delivery address
    • Detailed description of the item(s)
    • Quantity delivered
    • Date delivered
    • Signature of beneficiary or representative
  • Date of delivery should match the date of service billed


  • When delivering or mailing test strips to Medicare beneficiaries, the pharmacy must have a proof of refill request (PORR) from the beneficiary or their representative which includes the beneficiary’s name, representative’s name and relationship to the beneficiary, item description and quantity left on hand
  • This ensures that the patient has exhausted their current supply and that the pharmacy is not auto-filling or auto-dispensing

Advanced Beneficiary Notice (ABN)

  • If you have reason to believe the strips will not be covered by Medicare, consider obtaining a signed ABN prior to dispensing
    • This allows the transfer of financial liability back to the patient in the event the claim is denied
    • Ensure the ABN is completely and appropriately filled out with a very specific reason Medicare may deny the claim
    • The ABN must be completed and signed on or prior to the date of service

Be sure to utilize all the tools and resources available on your local DME MAC website to ensure you are compliant with Medicare’s billing and documentation rules. Below are some past Newsline articles to help you comply as well: