[FREE PAAS Webinar] Awareness to Action: Initiating USP 800 Compliance in Community Pharmacies

Join Vice President of PAAS National®, Carmen Fusselman, PharmD as she discusses:

  • Why your pharmacy needs a USP 800 Compliance Program for handling hazardous drugs
  • Requirements of USP 800 compliance program in community pharmacy
  • Implementing a fully functional program with the least interruption to your day-to-day business

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.

Auditors’ Latest Trick for Flagging “Misfilled” Prescriptions

PAAS National® analysts are noticing more prescriptions being flagged for recoupment based on “incorrect” instructions for use on the patient label. Pharmacies and PBM auditors have very different perspectives on what a “misfilled” prescription is. PBMs will look to categorize a claim as a “misfill” if the directions on the patient label do not include all instructions (including any clarifications made with prescriber). Appealing these discrepancies successfully can be a fruitless endeavor, predicated on circumstances and PBM guidelines.

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OptumRx discrepancy is listed as 3H-Directions on prescription different from computer records. No post-dispensing validation accepted. No verbal orders/annotations accepted.

Caremark discrepancy is listed as MIF-Prescription dispensed was filled with incorrect drug, strength, directions or patient. This discrepancy does not require further documentation.

Pharmacies are often very familiar with prescribers and what they may intend to include on the prescription but don’t. This can range from a clear quantity to actual instructions for the patient. Unfortunately, pharmacies supplementing or documenting clinical notations that do not make it on to the patient’s prescription label can face recoupment as a “misfilled” prescription.

Some of the common examples PAAS analysts see are when information was clarified or confirmed with the prescriber and added to the prescription but not included on the patient label:

  • Max daily dose for insulin with sliding scale or titration
  • Number of snack and/meals for pancreatic enzymes
  • Grams per application or area applied for topical medications

Additionally, PAAS is seeing issues where the pharmacy’s backtag and label do not include the entire set of instructions (i.e., an extended sig/label). Many software vendors only allow so many characters in the instruction field and may require additional instructions to be entered/printed separately. Not providing all the instructions the patient received [upon audit] would likely result in the claim being flagged for recoupment.

PAAS Tips:

  • Verifying information with the prescriber prior to dispensing
  • Clinical notes to document clarifications should include 4 elements
    • Date/time
    • Name and title of who you speak with
    • Summary of discussion
    • Pharmacy staff initials
  • Educate all data entry staff to include information on patient label that is related to the instructions for use
  • When submitting documentation for audit, be sure the auditor is receiving all information

An Easy Procedural Change That Will Prevent Recoupments

As previously reported in an April 2023 Newsline article, Prepare Yourselves! Onsite Audits Are Coming in Strong, PAAS National® saw a 300% increase in onsite audits in just the 3rd Quarter of 2022, and we have continued to see the number of audits, as well as the information requested in these audits, increase. It is therefore pertinent that pharmacies review and enforce their FWA/HIPAA policies and procedures, such as return to stock, to prevent petty recoupments.

Return to Stock, the timeframe PBMs require prescriptions to be picked up or the claim reversed based on the fill date of a prescription, is a focus of onsite audits when the auditor inspects the Will Call bin or desk audits when a signature log is requested. If the auditor identifies the sold/received date is beyond the PBM’s Return to Stock threshold, there is risk for full recoupment of the claim.

When determining what Return to Stock window is appropriate for your pharmacy, consider the following: 

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  • Each PBM’s Return to Stock window varies. How many days from the date of the adjudicated claim does the patient have to pick up the prescription before it is returned to stock? Is that number of days based on calendar days or business days?
  • When is your pharmacy filling prescriptions relative to when the prescription is being delivered to long-term care facilities, mailed to patients, or sent out for delivery?
  • What processes are in place to contact the patient when they have a prescription ready to be picked up? Does the patient receive a text message or phone call that a prescription is ready for pick-up? Do you contact the patient after a certain number of days to check if they still need the prescription?
  • What processes are in place depending on the type of prescription? Do you put all bowel preparation or post-procedure prescriptions on hold until they are requested?
  • Review PAAS’ Return to Stock chart, located on the PAAS Member Portal under Days’ Supply Charts, which includes the Return to Stock policies for major PBMs. For other PBMs that you serve and are not listed on our chart, refer to the respective PBM Provider Manual.

All above information should be considered when reviewing your pharmacy’s FWA/HIPAA policy and procedure manual (Section 4.1.1 Unclaimed Prescriptions for those utilizing PAAS’ FWA/HIPAA Compliance program). Make modifications as seen fit.

Lastly, see if your pharmacy system can help stop prescriptions that would be sold beyond your designated Return To Stock window. Certain dispensing platforms, with an integrated Point of Sale system, can have claims stopped at the register to avoid noncompliance.

PAAS Tips:

  • In order to be adherent to the vast majority of PBMs, PAAS suggests considering a 7-10 calendar days return to stock policy for your pharmacy
  • Contact software vendors about providing daily reports that reflect which claims have not yet been picked up and are approaching your Return to Stock window
  • Prior to an onsite audit, do an extra pass of your will call bin to ensure all prescriptions waiting to be picked up are within your Return to Stock window
  • REMS prescriptions may require specific restrictions for pick up, see our June 2021 Newsline, Would Your REMS Prescription Pass an Audit?
  • If a patient informs you that they will be picking up their prescription but it will be after your Return to Stock window, reverse and rebill the claim. Notating on the prescription that the patient was contacted and will be coming in at a later time will not suffice for PBM’s purposes
  • Partial/Completion, and LTC prescriptions are not exempt from Return to Stock policies
  • Do not have patients sign for prescriptions that were previously received as this is not an accurate reflection of the date the patient obtained the prescription
  • Refer to our March 2023 Newsline, PBM Trend That Never Changes? Return to Stock Policy Violations

Utilizing the PAAS Audit Activity Tracker

While seemingly mundane, the PAAS National® Audit Activity Tracker can serve a very important purpose. While pharmacy personnel may use this tool to stay organized with various audits coming their way, this tool can also be used to defend the pharmacy should an audit go awry. It’s better to document and have a record at the onset than to think back months ago about your individual efforts on an audit. This tool provides a structure to document important information during your audit process. Utilizing this tracker can provide credible documentation of a PBM’s (or auditors) ineffectual communication during an audit. This could help support an audit manager’s review of the auditor’s conduct or provide you with information to complain to your state insurance commissioner.

Here are some recommendations to include on the Audit Activity Tracker:

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  • Dates and times for:
    • Audit receipt and corresponding due date (along with audit result timelines)
    • Any communications with auditor
    • When onsite auditor arrives and leaves
    • Pharmacy attempts to contact auditor
  • Summary of discussion with auditor regarding questions or concerns
  • Requests and approval of any extension of due date
  • Action taken to escalate to audit manager/supervisor


Audit Activity Tracker
Date/Time Item Notes/Comments
4/20/2023 Audit Received Audit letter dated 4/10/2023
5/1/2023 @ 1:00pm Extension Requested Contacted auditor William Henry by email to request extension
5/8/2023 @ 3:30pm Extension Left VM for auditor mention email request for extension
5/9/2023 @ 2:00pm Received Extension and new due date Auditor responded to email request for extension. New due date is 6/10/2023
5/9/2023 @ 2:15pm Auditor Call Auditor, William, called to inform pharmacy of extension as follow-up to email. I also asked about ‘Computerized Dispensing Records’. William, stated I would not need to submit that information with the audit.
6/7/2023 @ 8:45am Audit sent to PBM Fax confirmation attached (or tracking # noted if mailed)

PAAS Tips:

  • Attach the Audit Activity Tracker to any audit request you receive
  • Educate all staff involved in the audit process on how to utilize the tracker
  • Keep audit documents organized and readily available
  • Be prompt when adding information to the tracker to ensure accuracy
  • Visit the PAAS National® Member Portal for additional Proactive Tips

Podcast: A Deep Dive into LTC Audits with Trent Thiede

Trent Thiede, President of PAAS National® and host of Amplify Long-Term Care Pharmacy Podcast, Frances Nahas talk all things pharmacy audits, from transitions of care to the complicated (and necessary) role PBMs play. Tune in to learn surprising insight of LTC audits to take your long-term care program to the next level.

PAAS Defends Community Pharmacies by Engaging DME Medicare Administrative Contractor CGS

In our August Newsline Standard Written Order and Medicare Part B Audit Risks – New Guidance, we shared a few examples some of our members are having on audit results regarding their Standard Written Order (SWO). Beyond writing the Newsline, PAAS National® also reached out and engaged nurse medical reviewers with CGS about our concerns on the three topics below.

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Issue #1: DME MACs state corrections on an SWO must be signed off by prescriber

  • Chapter 5.2.2 of the Medicare Program Integrity Manual states: “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. This additional information shall be corroborated by information in the medical record”
    • Section 5.2.2 does not state the prescriber must sign off on any additions or corrections to an SWO. This goes against standard pharmacy practice and conflicts with CMS guidance.

Issue #2: While refills are not a required element on the SWO, if the practitioner writes for refills, they will be honored exactly as specified regardless of the quantity dispensed

  • Medicare allows the initial fill and as many times subsequently for the exact refills indicated on the prescription after which the prescription would be considered expired
  • Example: A pharmacy receives an order for a 90-days supply, plus three refills (i.e., a full year’s worth of medication). If the pharmacy can only bill for one month at a time (Medicare requirement on most DMEPOS items), the pharmacy can only fill off this SWO for a total of 4 fills (likely 120 days), regardless of the total quantity written. Additional fills would be considered unauthorized refills and ineligible for reimbursement, despite standard pharmacy practice.
    • The DME MACs were unable to provide PAAS a citation or reference for their interpretation, stating they do not have the sophistication to track total quantity prescribed over the life of an SWO

Issue #3: OmniSYS memo – “An important Update About Medicare Part B Insulin Coinsurance Reductions and Deductible Waivers” when using insulin in a pump

  • Section 11407 of the Inflation Reduction Act – The purpose of this Change Request (CR) is to implement the Medicare Part B deductible, which is waived for insulin furnished through an item of durable medical equipment and limits the beneficiary coinsurance for a month’s supply of insulin not to exceed $35. The supplier payment is to be adjusted “as necessary” so that Medicare pays for the rest of the amount for the month’s supply of insulin.
  • As of July 1, 2023, suppliers billing between a 31 to 89-day supply or greater than a 90-day supply will continue to encounter days’ supply rejections.
  • OmniSYS will automatically add the new JL or JK modifiers to claims billed as a 90-day supply
    • PAAS’s concern is that the claims processor is rejecting claims with a days’ supply of 31-89, interpreting the MLN literally for the JK and JL modifiers, which does not make sense for insulin being used in a pump. Rarely would the days’ supply work out perfectly to 30 or 90.

While the meeting with the nurse medical reviewers from both jurisdictions B and C at CGS was fruitless, we were able to escalate our concerns to the medical directors at CGS jurisdictions B and C. The directors were very open to discussion and receptive with our concerns regarding the SWO and OmniSYS issues discussed above. The directors have promised to forward our differing interpretations of section 5.2.2 to the CMS division of medical review and update us on any additional CMS guidance. PAAS will keep our members informed as things develop.

Best Practices for Billing Vaginal Creams to Avoid Recoupment

PAAS National® analysts frequently receive questions regarding the proper billing of creams and ointments, an easy audit target for PBMs. This article focuses on vaginal creams due to their high cost, lack of sufficient instructions for use and plan limits that cause pharmacies problems. When a PBM auditor sees a claim for Premarin® or Estrace® vaginal cream, they see dollar signs and often take back 100% recoupment on not just one fill, but multiple refills. To help reduce the risk of an audit recoupment, please review the table and PAAS Tips below.

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

Here is an example prescription:

  1. Premarin® vaginal cream, quantity: 30 gram, sig: 1 gram vaginally three times weekly
  2. 30 gram ÷ 3 gram per week = 10 weeks or 70-day supply
  3. Don’t assume plan max of 30 days, try to bill as 70-day supply as per estimate
  4. If plan limit is 30 days, then follow the “ILQ process
  5. Suggest sig on dispensing label of ‘Use 1 gram vaginally three times weekly (70 days)’ to alert patient and pharmacy staff of how long the dispensed product should last

PAAS Tips:

  • 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
  • Ensure an accurate days’ supply is submitted on claims – many PBMs will allow > 90 days for these products due to normal utilization
  • These vaginal creams only come in one package size and instructions rarely support a days’ supply of 30
  • Do NOT default the days’ supply to 30
  • See PAAS’ Can You Bill as 30 Days? resource on the PAAS Member Portal (paasnational.com) for step-by-step guidance on the “Insurance Limits Quantity” (ILQ) process
  • Vaginal creams should be treated as “refill on demand” only and NOT included on LTC cycle fill or retail medication synchronization programs
  • Self-audit your vaginal creams for accurate days’ supply and appropriate instructions – refer to our June 2021 Newsline article, Self-Audit Series #5: Topical Prescriptions

PAAS Pit Stop: On-Demand Webinars

Over the last three years, PAAS National®’s President, Trent Thiede, has presented on-demand webinars, ranging from 15 to 45 minutes, to ensure our members gain the knowledge needed to avoid audits, stay abreast on the latest topics in the pharmacy world, and provide information on the more difficult topics in an easy-to-understand manner. During the live events, members are able to ask questions on the topics presented.

PAAS understands the busy and unpredictable nature of your day-to-day pharmacy practice, so we are happy to offer the recorded webinars on the PAAS Portal. It’s a great tool for training and developing staff, as well as keeping up with hot topics in the industry. If you have questions while watching the on-demand webinar, contact PAAS and we’ll be glad to assist.

PAAS strives to pick webinar topics that are relevant to our members, if you have suggestions, please contact us.

PAAS Webinars:

Ransomware Attacks – Is Your Data Protected?

Safeguarding electronic Protected Health Information (ePHI) is as important for a big Fortune 1000 company as it is for independent pharmacies. The HIPAA Security Rule was designed to be flexible to accommodate providers of different sizes and with varying scopes of practice; therefore, the size of your pharmacy does not matter…the Security Rule still applies. That means administrative, technical and physical safeguards are all required to protect patient information.

A recent breach at PharMerica Corporation should serve as a reminder to reassess your pharmacy’s own safeguards to help decrease the risk of a successful malicious cyberattack. According to the PharMerica breach notification posted online in the Maine Attorney General Data Breach Notifications database, the breach affected over 5.1 million people. The attack occurred between March 12 and March 13, 2023 and was discovered on March 21, 2023. A sample of PharMerica’s breach notification letter explained that hackers gained access to patient records including “name, address, date of birth, Social Security number, medications, and health insurance information”. A ransomware gang claimed to be behind the attack and when PharMerica did not pay the ransom to buy back their stolen data, the information was published online.

Administrative safeguards such as firewalls, anti-virus software, log-in monitoring and password management are just several examples of methods to protect ePHI. Here are several questions to consider about your own program:

  • What array of methods does your pharmacy use to safeguard your ePHI?
  • Have you evaluated your vulnerabilities lately?
  • Have new/different threats been identified that require consideration for additional safeguards to be implemented?

PAAS Tips:

  • At least once a year, the Security Officer should perform a thorough assessment of the potential threats, vulnerabilities and the associated risks to the confidentiality, integrity and availability of ePHI
  • Develop and implement policies and procedures to safeguard ePHI
  • PAAS National® Fraud, Waste & Abuse and HIPAA Compliance Program members should review their Policy & Procedure Manual for additional guidance on safeguards; specifically, Section 11 – HIPAA Security and Other Administrative Simplifications and should perform a Risk Analysis at least annually

Automatic Prescription Refill Concerns

Many pharmacies use an automatic refill process to streamline the labor needed to fill prescriptions. Patients tend to have better adherence to taking their maintenance medications when automatically refilled, and inventory management can be smoother as well.

Unfortunately, automatic refills can also lead to waste or abuse if not managed properly.

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This is why many state Medicaid plans do not allow automatic refills for their patients. MO HealthNet was just the latest Medicaid plan to prohibit automatic refills citing the following observations:

  • Participants receiving medications that were discontinued months prior;
  • Multiple strengths of the same medication when the prescriber changed doses but the pharmacy continued to autofill both;
  • Multiple products in the same drug class when the prescriber changes medications, but the pharmacy fills the old and the new medication; and
  • Pharmacies filling “as needed” medications each month, including migraine medications, rescue inhalers, and COVID tests, among others.

Unfortunately, PAAS National® has assisted with audits where the PBM is requesting proof of refill request. They required pharmacies to have a system in place to document that a patient requested a refill and note the date of request. Some of these audits were for Medicaid plans, some were simply audits where the patient had denied requesting the medication be filled possibly due to the patient misunderstanding the request by the PBM. In these cases, it is up to the pharmacy to prove that they filled the medication in accordance with a patient’s wishes.

PAAS Tips:

  • Be aware, state pharmacy regulations may prohibit, or require additional documentation for, automatic refill programs
  • Medicare B requires Proof of Refill Request for supplies that are mailed and delivered, to confirm patient need and proof of exhaustion for previous supplies
    • Contact PAAS if you need a template
  • Avoid putting bulk items like inhalers, insulin, eye drops or topicals on med sync
  • Do not put “as needed” or controlled substance medications on med sync
  • Ensure the refill interval is at ≥ 90% utilization
  • If employing a med sync program, review our August 2022 Newsline article, Medication Synchronization: Possible Concerns
  • Read the September 2022 Newsline article, Automatic Mailing for Part D Patients, for more information