2024 Self-Audit Series #2: DAW Codes

Prescriptions flagged for incorrect or invalid DAW codes is a discrepancy we have seen increase notably on PBM audit results. Pharmacy reimbursement and/or patient copay may be influenced by the DAW code billed providing another reason PBMs scrutinize so closely.

Auditors will look for …

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documentation to support any DAW code billed other than DAW 0. Prescriptions without appropriate documentation may be at risk of full recoupment. Understanding the significance of billing the correct code is something all pharmacy staff should be aware of.

PAAS National®®  has created the: DAW Codes Explained chart with the NCPDP list of codes and their description.

PAAS Tips:

  • Print and post the DAW Codes Explained chart for easy reference.
  • Avoid having pharmacy software default the DAW field, as this may allow an incorrect code to be used.
  • Follow state specific laws and Medicaid requirements for DAW 1 format requirements.
  • Patients requesting brand name medication must be notated on the prescription or in your electronic notes field. Be sure this information is readily retrievable for audit purposes.
  • Do not assume the same DAW billed on past prescriptions is accurate for the current prescription.
  • DAW 0 would be appropriate for generics, single-source drug products, brand or reference products (without an available equivalent).
  • Follow plan reject messages when brand name is the plan’s formulary choice; use DAW 9 when plan indicates – do not assume.
  • Self-audit prescriptions on a weekly/monthly basis using internal software reports to confirm claims were billed with correct DAW codes and have supporting documentation.
  • Consider these additional references:

Numerous Sumatriptan Formulations Cause Headaches for Pharmacies, & Potential Recoupments

Sumatriptan is FDA approved for the acute treatment of migraine headaches, with or without aura. It is available in numerous formulations and strengths which can cause confusion during the filling and billing process. To decrease your risk of audit, and recoupment, be sure staff are aware of the nuances of sumatriptan and follow the guidance below.

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Formulation Strength Available package size NCPDP Billing Units
Auto-Injector 4 mg/0.5 mL

6 mg/0.5 mL

 2 syringes/box  1 mL
Nasal solution 5 mg/actuation

20 mg/actuation

 6 nasal inhalers/box 6 EA
Oral tablets 25 mg

50 mg

100 mg

 Unit of use boxes with 9 or 27 tablets or bottles with various quantities # EA
Pen kit with cartridges 4 mg/0.5 mL

6 mg/0.5 mL

 2 cartridges/box 1 mL
Refill cartridges for use with pen kit 4 mg/0.5 mL

6 mg/0.5 mL

 2 cartridges/box 1 mL
Single use vial 6 mg/0.5 mL Carton with 1 vial, 5 vials, or 25 vials 0.5 mL, 2.5 mL, 12.5 mL (respectively)
Lesser Known Formulations
Zembrace® SymTouch® Auto-Injector 3 mg/0.5 mL 4 pens/carton 2 mL
Onzetra® Xsail® Nasal powder 11 mg/nosepiece (using two nosepieces [22 mg] per administration) 8 dose kit (8 pouches containing 2 nosepieces per pouch) 16 EA

PAAS Tips:

  • Verify all sumatriptan prescriptions contain the dosage, formulation, quantity, and directions
  • Vague instructions for use such as “Use as Directed” and “as needed” should always be clarified. Obtaining the estimated number of headaches per week or per month from the prescriber (particularly if dispensing >1 package) allows the pharmacy, and auditor, to estimate an accurate days’ supply Remember to update the hardcopy with a clinical note and update the patient label to include the additional instructions
  • A complete clinical note should include:
    • Date (and preferably time)
    • Name and title of individual providing information
    • Specific information provided
    • Pharmacy staff initials

Announcing the PAAS Rx Days’ Supply Calculator App

Pharmacy staff face numerous challenges in managing prescriptions effectively. Manually calculating the appropriate quantity or days’ supply of medications can be time-consuming and prone to errors, creating the potential for PBM audits. We are thrilled to announce the launch of the Rx Days’ Supply Calculator app, a revolutionary tool designed to simplify calculations for pharmacists and pharmacy technicians. Developed by PAAS National®, this innovative app aims to enhance accuracy and offer guidance on dispense quantities and billable days’ supply.

The PAAS Rx Days’ Supply Calculator offers a user-friendly interface designed to enhance efficiency and empower pharmacy staff with confidence:

  • Accurate Calculations: Incorrect days’ supply calculations can lead to a myriad of issues – from patients receiving the wrong amount of medication to claim rejections and audit triggers. The app provides precise calculations for dispense quantities and billable days’ supply, tailored to various dosage forms, including insulin, topical creams and ointments, Santyl® dosing, and eye drops.
  • Billing Guidance: Billing complexities often pose challenges, but our easy-to-use calculator tool offers guidance on dispense quantities and billable days’ supply.
  • Seamless Recordkeeping: The app generates PDF documents with additional PAAS billing guidance, facilitating seamless recordkeeping processes for pharmacies. This feature enhances efficiency, minimizes errors, and elevates your pharmacy operations – because accuracy matters.

We invite you to be proactive and experience the benefits of the PAAS Rx Days’ Supply Calculator today. Download the app for a free 7-day trial ($5.99/year thereafter) by visiting the Apple App Store or Android Google Play Store, or check out the website at PAASNational.com/app.

NDC Numbers: Not a Guarantee of FDA Approval

A common misconception that pharmacies have is that if a product has an NDC (National Drug Code) number that means it is approved by the FDA – unfortunately, this is not the case.

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In fact, the FDA does not assign the NDC number. The company making a product must register with the FDA to obtain a “labeler code” (the first set of numbers in the NDC); these companies may be the manufacturer, a repackager or a distributor. Once they have obtained a labeler code, the company then assigns the product code (middle set of numbers in the NDC) and the package code (the last set of numbers in the NDC) and submits the final NDC to the FDA to have their product added to FDA’s NDC SPL Data Elements File (NSDE).

Products billed to Medicare and/or Medicaid that are not FDA approved are subject to recoupment. Examples include:

  • Unapproved drug other (example Anucort-HC Rectal Suppository NDC 00713-0503-12)
  • Dietary supplements – (example WellPro 31 NDC 71741-0376-30)

PAAS Tips:

  • Do not assume that a product is “FDA approved” just because it has an NDC number
  • Medicare gives preference to a “pay and chase” model when it comes to claims – they want beneficiaries to receive needed medications and will pay the claim at point-of-sale assuming the medication is being used in an FDA approved manner
  • Caremark prohibits the use of ANY coupon for non-FDA approved products
    • As defined in the current Provider Manual: “Pharmaceutical Manufacturer Coupon” means any item or mechanism, including but not limited to, paper coupons, copay cards, e-vouchers, mail-in rebates, and electronic coupon codes funded by a manufacturer, repackager, or supplier of pharmaceutical, chemical, or compounding products, that reduces the portion of the Patient Pay Amount that an Eligible Person is required to pay for a Covered Item
  • Be cautious about billing products that are not FDA approved
  • Consider checking the following to determine FDA approval and marketing status
    • Your wholesaler database
    • Your software vendor drug file
    • FDA Orange Book: https://www.accessdata.fda.gov/scripts/cder/ob/index.cfm
    • FDA Purple Book: https://purplebooksearch.fda.gov/
    • DailyMed: https://dailymed.nlm.nih.gov/dailymed/index.cfm
    • NSDE: https://www.fda.gov/industry/structured-product-labeling-resources/nsde
  • The FDA states the following regarding the NDC (National Drug Code) Database:
    • “The inclusion of a firm or its products in the NDC directory does not denote approval by the FDA of the firm or any of its marketed products, nor is it a determination that a product is a drug as defined by the act, nor does it denote that a product is covered by or eligible for reimbursement by Medicare, Medicaid, or other payers.”
  • If you are ever in doubt about a product, call PAAS at (608) 873-1342 so that we can help you identify whether it may be a problem

Caremark Invoice Audits – Purchases from Other Pharmacies

Caremark invoice audits continue to plague many pharmacies and often result in substantial audit findings and, occasionally, network termination.

Inventory acquired from other pharmacies frequently causes problems, whether purchased directly from another pharmacy or indirectly through an online marketplace such as RxeedTM or MatchRX.

Caremark has a very rigid policy for these pharmacy purchases and will only give credit for such purchases if the purchasing pharmacy has sufficient documentation.

Section 8.05 of the Caremark Provider Manual outlines the following requirements:

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For those Covered Items for which a Transaction Statement, Transaction History, and Transaction Information are not required by the DSCSA, Provider must maintain records of the exact quantities purchased, name of the Authorized Trading Partner, Covered Item name(s), NDC(s), date(s) of purchase, and proof of payment [e.g., copies of credit card receipts, canceled checks (front AND back)] (collectively “Documentation”). For those Covered Items received from other pharmacies, Provider must obtain and maintain the entire Transaction Statement, Transaction History, and Transaction Information from the selling entities.

For context, the Drug Supply Chain Security Act (DSCSA) allows such sales between pharmacies and requires that these transactions include the pedigree (aka Transaction Statement, Transaction History, and Transaction Information or “3Ts”) if they are for general stock replenishment. The DSCSA exempts transactions that are for a specific patient need and does not require the pedigree to be communicated, but Caremark seems unwavering.

PAAS National® has seen Caremark auditors request copies of the transferring pharmacy’s license and original invoices (and/or pedigree information) from the transferring pharmacy’s wholesaler. While PAAS strongly opposes Caremark’s policy and enforcement efforts, they hold an upper hand in an audit situation and consider the Provider Manual an extension of the contract.

RxeedTM recently filed a tortious interference lawsuit against Caremark in the District of NJ for their aggressive policies that is deterring pharmacies from using their platform. PAAS has also seen MatchRx contact selling pharmacies to obtain the wholesaler invoice based on an audit at the purchasing pharmacy (pursuant to the MatchRx User Agreement, section 2.5).

PAAS Tips:

  • Pharmacies should carefully weigh the pros and cons of purchasing inventory from other pharmacies (whether directly or indirectly)
  • If you choose to purchase inventory from another pharmacy, make sure you have full details of the transaction, including:
    • Pharmacy name, address, and NCPDP number transferring from
    • Drug name, quantity, lot number, expiration date, and NDC number
    • Date of transfer and date of receipt of drug
    • Reason for transfer to prove specific patient need exemption (e.g., complete Rx #1234)
    • Method or proof of payment (check # or credit card receipt)
    • Copy of transferring pharmacy license
    • Copy of invoices from transferring pharmacy to validate that they purchased from a licensed wholesaler
  • See previous Newsline article from December 2022 Pharmacy to Pharmacy Inventory Transfers – Buyer Beware! for additional discussion about pharmacy marketplace purchases

Best Practices When Filling & Billing Afrezza®

Afrezza®, a rapid-acting insulin human inhalation powder for adults with either type 1 or type 2 diabetes mellitus, can cause confusion for prescribers, pharmacies, and patients alike.

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Fortunately, the Afrezza® website has numerous tools and resources that can assist in proper filling and billing practices.

  • Prior Authorization Checklist – provides pharmacies and prescribers a clear and concise list of information to be submitted to insurance when requesting a prior authorization.
  • Product Reference Guide – a compilation of NDC’s for both combination and single box options. In addition, the guide gives total insulin units, total cartridges, and max total daily dose which can be used when determining how many boxes to dispense to satisfy a 30 days’ supply.
  • Afrezza Dosing Calculator – a tool that can be used to assist pharmacies in choosing the most appropriate NDC to use to fill the prescription

Afrezza® is only available in specific unit cartridges – 4 units, 8 units, and 12 units. In instances where a patient requires a dose greater than 12 units, the patient will need to use additional cartridges to obtain the correct dose. Prior to filling the prescription, ensure the dose prescribed for the patient is obtainable. If the dose is not feasible, the prescription is at a high risk of recoupment on audit.

Cybersecurity Incident at Change Healthcare – Documentation is Key to Reducing Audit Risk!

Pharmacies are feeling the impact of the cyber-attack at Change Healthcare resulting in workflow nightmares. PAAS issued an email alert to members about audit risk on 2/23 (details contained herein).  Change Healthcare, a health care technology company that is part of Optum, experienced a cybersecurity issue on February 21, 2024 which is impacting the ability of PBMs, and many healthcare providers nationwide, to process prescriptions through patients’ insurance.

It is not clear, how many partners of Change Healthcare were affected and to what degree. As this continues to further develop, pharmacies can sign up for updates here.

Pharmacies are continuing to fill prescriptions with a change or delay in processing until connections are restored with appropriate controls in place; however, it is important for all pharmacies to be conscious of audit risk.

The following areas represent the greatest audit risk:

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  1. Validity of faxed ‘electronic’ prescriptions
    1. If an e-Rx fails over to fax, that changes the origin of the prescription to fax. In many states, a physical, or digital, prescriber signature is required for faxed prescriptions. If required, be sure to document a call was made to the prescriber’s office for validation.
  2. Refilling claims too soon
    1. Since pharmacies can’t rely on real-time claim rejects, be careful not to refill prescriptions too early.
  3. Proof of delivery in relation to date of service
    1. When rebilling claims, backdate the date of service to the actual date the patient received the medication.
  4. Proof of copay collection
    1. If the copay estimated/billed during the outage is incorrect:
      1. Refund any overpayments to the patient via a trackable method
      2. PAAS recommends the balance of any underpayments be put on a house charge account to document the rationale and potential attempts to collect, as appropriate.

PAAS has shared these concerns with NCPA, who is working diligently with CMS and PCMA to advocate against repercussions and recognize pharmacy sacrifices during this time.

Please feel free to contact us at (608) 873-1342 or info@paasnational.com should you have additional audit-related questions, PAAS is here to assist.

Bowel Prep Products – What Quantity and Days’ Supply to Bill?

PAAS National® last wrote an article on bowel prep products in June 2022 titled Bowel Prep Products – Days’ Supply Considerations. Since then, a few new products have been approved and added to the market. The most common PBM audit issue PAAS sees with bowel prep products is billing an incorrect days’ supply.

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Product NCPDP Quantity Beyond-Use Date
CLENPIQ® 320 mL n/a
GoLYTELY® 4000 mL 48 hours after mixing
MoviPrep® 1 EA 24 hours after mixing
SUFLAVE™ 2 EA 24 hours after mixing
SUPREP® 354 mL n/a
SUTAB® 24 EA n/a

PAAS Tips:

  • Make sure you are billing the correct quantity – some are billed in mL and some as EA
  • Bowel prep products should be billed as 1- or 2-day supply, depending on the dosing schedule
    • PBMs will often flag claims that have been billed as a 30-day supply due to the beyond-use dating of these products
  • If the prescription is written “Use as Directed”, PAAS suggests contacting the prescriber to find out if the patient is to follow the package directions or if the prescriber had directed the patient to take it in a different manner. The pharmacy can also verify the directions if the patient has instruction sheets
  • Once clarified, document a clinical note on the prescription and update the patient’s label with the specific directions or “use as directed per package” and bill the appropriate 1- or 2-day supply
  • Beware – if the prescription instructions for use indicated chronic/maintenance dosing (e.g., 30 days or includes refills), clarify indication and confirm that there was no order entry error
    • Prescriber may have intended MiraLAX® which also has polyethylene glycol 3350 and is intended for chronic treatment; mixed one capful at a time, there is no meaningful beyond-use date to consider

Qualified Medicare Beneficiary (QMB) Program

Pharmacies may bill prescriptions from time to time for patients with dual eligibility, possessing both Medicare and Medicaid benefits. Some of these patients are eligible for the Qualified Medicare Beneficiary (QMB) program which provides Medicaid coverage of Medicare Part A and Part B premiums and cost sharing to low-income beneficiaries – CMS states that about 12% of Medicare patients were in this program in 2021.

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Federal law prohibits Medicare providers (including pharmacies) from billing QMB patients for cost sharing amounts related to Medicare Part A or B covered items. QMB patients bare no legal obligation to pay cost sharing for these items – cost sharing amounts must only be billed to Medicaid. If there is a copay after billing Medicaid, pharmacies may collect this amount.

Pharmacies are most likely to encounter these situations when a dual eligible patient has a Medicare Advantage Plan (MAPD) and you are billing for Part B covered items like diabetic test strips, continuous glucose monitor supplies, or nebulizer drugs. Pharmacies may see a claim response of “Benefit Stage Qualifier (BSQ) 51” in NCPDP D.0 field 393-MV to alert you that items were covered under the Part B benefit and that balance billing is prohibited.

Please note that the QMB Program and prohibitions on collecting copays apply to Part B covered items only; pharmacies must continue to collect copays for Part D covered drugs.

PAAS Tips:

  • Be on the lookout for BSQ 51 response messages when billing for Part B covered items to patients with MAPD plan
  • If patient states they are a QMB but the claim system does not provide BSQ 51 message, then follow-up with the MAPD plan or the state Medicaid program

Early Refills of Titrated Medications Lead to Recoupments

Titration is a common practice for certain medications where prescribers start a patient on a low dose and gradually increase the amount over time to find what’s most effective. Classic examples of titrated medications include: warfarin, antidepressants, antidiabetics like insulin and metformin, GLP-1s, opioids, and thyroid products.

Sometimes the titration directions will come on one prescription with the intention for the patient to increase their dose over time using the same medication strength (or even one prescription indicating multiple strengths, but not clearly written as additional prescriptions). Other times, prescribers will send multiple scripts for multiple strengths of these medications at the same time with the intention for the patient to refill the new strength once the current one is depleted. In all cases, it is important to …

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make sure you are not refilling or filling the next prescription early as audit risks loom.

Example 1:

Prescription written for Victoza® 18 mg/3 mL. Quantity 9 mL. Directions of inject 0.6 mg once daily for one week, then increase to 1.2 mg once daily for one week, then increase to 1.8 mg once daily.

The actual days’ supply of the first fill is 37. Each fill thereafter is a 30-day supply. If you refill the claim 25 days after the first fill, you are at risk of a “refill too soon.”

Example 2:

First prescription written for Mounjaro® 2.5 mg/0.5 mL. Quantity 2 mL. Directions of inject 2.5 mg once weekly for 4 weeks.

Second prescription written for Mounjaro® 5 mg/0.5 mL. Quantity 2 mL. Directions of inject 5 mg once weekly for 4 weeks.

Third prescription written for Mounjaro® 7.5 mg/0.5 mL Quantity 2 mL. Directions of inject 7.5 mg once weekly for 4 weeks.

Each prescription filled should last the patient 28 days. If you fail to place the 5 mg and 7.5 mg prescriptions on hold and fill all three at once, the 5 mg and 7.5 mg prescriptions are likely to be recouped for “refill too soon,” “therapeutic duplicate,” “over utilization,” or “clinical misuse.”

PAAS Tips:

  • Ensure the accurate days’ supply is billed on all titrated medications.
  • If plan limits do not allow the correct days’ supply, follow PAAS’ Can You Bill It As 30 Days? guidance and do not refill until the actual days’ supply is nearing depletion.
  • If receiving multiple prescriptions for the same medication with different strengths, place those not being used first on hold until the patient requires a refill.
  • Not all patients will do well on the starter dose and may never require the additional medication.
  • Filling those medications early may lead to waste.
  • If the titration dose and maintenance dose are on the same prescription, consider the following options to accurately bill/dispense the medication:
  • Enter the prescription into the system with the SIG representing the full titration and maintenance dose, making sure to adjust the days’ supply (and/or quantity) on subsequent refills.
    • Note: refills may process automatically, resulting in a wrong days’ supply or quantity. A wrong days’ supply would likely cause an early refill on the third dispensing, forcing the pharmacy to rebill the second claim.
  • Enter the prescription in the system as two separate prescriptions, one for the titration and one for the maintenance dose. The titration can reference the maintenance dose in the SIG for patients and staff guidance.
  • Review any DUR rejections and properly document resolutions.
  • See the December 2023 Newsline article, Documentation Deep Dive: Meeting Auditors’ Standards in DUR and SCC, for more.