2022 Fraud, Waste & Abuse and HIPAA Compliance Program Updates

PAAS National® continuously monitors legislative and regulatory changes that may impact your Fraud, Waste & Abuse and HIPAA Compliance Program. We keep a close eye on enforcement from the Department of Justice and Office for Civil Rights to help ensure the program meets interpretative standards. Furthermore, PAAS works to keep pace with Pharmacy Benefit Managers as they continue to add credentialing requirements that can be extremely difficult and a significant nuisance to independent pharmacies.

The PAAS National® FWA/HIPAA Compliance Program has implemented changes to ensure pharmacies continue to have a robust program in place. PAAS FWA/HIPAA compliance members can login to the member portal to view the 2022 FWAC and HIPAA Updates.

Administrators should review all Compliance tasks (located in the left-hand navigation on the PAAS Member Portal) at least annually to keep the program up-to-date and in compliance. Section 2.6 Updates of Policies and Procedures of your manual contains information on maintaining open lines of communication and the distribution of changes.

Contact us TODAY at (608) 873-1342 or info@paasnational.com and add FWA/HIPAA for a discounted rate.

“We have been with PAAS for many years and added the FWAC/HIPAA material to our membership and as a compliance officer, I’ve never been more pleased with the program. If you have already made the best choice to have PAAS in your corner, then continue with the best for your FWAC/HIPAA needs.” – Member since 2010 from North Carolina

“PAAS National® Fraud, Waste, Abuse and Compliance educational sessions are unsurpassed. The PAAS National® Policy and Procedure manual that you create for your pharmacy is a must for all pharmacies to have for their staff. All of this keeps your pharmacy up to date with current pharmacy procedures and operations and ensure proper pharmacy practices going forward.” – Member since 2021 from New York

“A pharmacy without the compliance program does not have their bases covered and required work finished. I can sleep at night knowing this program keeps me protected and on task.” – Member since 2009 from Iowa

Humana Compliance Requirements – Training and Exclusion Checks Are Not Enough

PAAS National® analysts have received several questions regarding Humana’s 2022 Notice of Program Requirements. Humana’s Compliance Policy for Contracted Healthcare Providers explicitly states pharmacies must have a compliance program that meets the seven elements outline by CMS, including written policies, procedures and standards of conduct. Per the 2022 Pharmacy Compliance Education and Training Requirements FAQs: “Humana reserves the right to request documentation (e.g., policies and tracking records) confirming that your organization has an effective compliance program that meets the requirements outlined in the Compliance Policy and Standards of Conduct.”

PAAS’ Fraud, Waste & Abuse and HIPAA Compliance program keeps members compliant beyond training and exclusion checking. Since 2009, the program was designed to meet these CMS requirements, with the full support of our expert staff – pharmacists just like you, with years of experience helping community pharmacies with FWA and HIPAA compliance.

If you aren’t a member of FWA/HIPAA and are interested in saving $126 on your membership, please contact PAAS at (608) 873-1342 to become an Elite member.

PAAS Tips:

    1. Members can contact PAAS (608) 873-1342 if you have any questions
    2. See December 2021 Newsline article PBM Provider Manual Updates – What You Need to Know
    3. See August 2021 Newsline article Humana Audit Program Updates

Self-Audit Series #13: Diabetic Test Strips

The 2020 National Diabetes Statistics Report, analyzed data through 2018 and found that there are over 34 million Americans with diabetes (approximately 1 in 10 Americans). Additionally, there are 88 million Americans with prediabetes (approximately 1 in 4 Americans). Based off this data, there are more than 120 million people in the United States that are living with diabetes or prediabetes. Due to the high volume of claims for diabetic test strips, they continue to receive significant attention during third-party audits. Follow the tips below to be prepared if you get an audit.

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Purchasing Requirements

  • PBM contracts require that pharmacies purchase test strips from vendors that are licensed distributors in your state
  • OptumRx® requires purchases from suppliers that have received NABP’s Drug Distributor Accreditation (DDA) (formerly known as “VAWD® Accreditation”)
  • Caremark® and Express Scripts® also require test strips to be purchased directly from the manufacturer or from authorized distributors only.
  • Consider purchasing test strips from one approved wholesaler to make things easier
  • Major test strip manufacturer’s have lists of “authorized distributers” on their websites
  • Beware of secondary wholesalers which are subsidiaries of authorized distributors who may not show up on the authorized list (e.g., River City and Masters)

Billing

  • Make sure that prescriptions have calculable instructions – use as directed is not accepted upon an audit
  • Confirm that you are billing the correct NDC – many test strips have a “retail” version and a “Medicare/Medicaid only” version
  • Verify the NDC billed is for the correct package size – do not bill the #100 count NDC if you are dispensing the #50 count box
  • Dispense only one NDC per claim – you should not dispense 1 x #100 count and 1 x #50 count to equal #150 test strips
  • Dispense the package size that is closest to the total quantity – if the prescription is for #200, dispense 2 x #100 count, not 4 x #50 count; some plans prohibit dispensing smaller packages
  • Submit the accurate days’ supply based on the quantity and instructions
  • If you are billing DMEPOS for Medicare beneficiaries, make sure that you submit the correct modifier to indicate if the patient is using insulin (KX) or not using insulin (KS)
  • Some payers may require a diagnosis code at the time of billing to support the clinical need

Additional Newsline Article References for Self-Audit

Are You Prepared to Prove TIRF REMS Program Compliance?

The purpose of the Transmucosal Immediate-Release Fentanyl (TIRF) Risk Evaluation and Mitigation Strategy (REMS) Program is “to mitigate the misuse, abuse, addiction, overdose, and serious complications due to medication errors with the use of TIRF medicines.” If your pharmacy dispenses Actiq®, Fentora®, Subsys®, or other medications which fall under the TIRF program, now is a good time to evaluate your compliance with all TIRF REMS requirements. The program has strict standards for all stakeholders involved with TIRF products including program administrators, wholesalers, prescribers, pharmacies and patients. Annually, the program administrators must audit all certified outpatient pharmacies who ordered at least one shipment of a TIRF medication in the preceding 12 months, up to 400 pharmacies.

PAAS National® analysts have seen audits recently conducted by Compliance Architects®, a company which offers many services including FDA risk management and compliance consulting. The audits have consisted of a short online survey followed by a self-scheduled virtual meeting. During the audit process, pharmacies are expected to share copies of various program-related documents such as:

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A key factor to successfully completing the audit is being able to provide robust policies and procedures which meet all program requirements. Whether you’re reviewing your current policies and procedures, or find yourself without this key compliance element, reviewing the Pharmacy Education document found online under the Pharmacy page of the TIRF REMS Access Program website is a good starting point. Mirroring each section from the Pharmacy Education document in your own policy and procedure can help ensure all compliance elements are captured.

If your pharmacy is found to be non-compliant, the type and severity of the offense determines the reprimand (which may consist of a corrective and preventative action plan, continued monitoring for compliance or potentially deactivation from the TIRF REMS program). A copy of the TIRF REMS Non-Compliance Protocol can be found on the Access Program website.

PAAS Tips:

  • All pharmacies dispensing TIRF REMS medication must have an Authorized Representative who successfully completed the TIRF REMS Pharmacy Knowledge Assessment, submitted the Pharmacy Enrollment Form and attested to following all program requirements.
  • Ensure all staff involved in the ordering, inventory management and dispensing of TIRF REMS medications have been trained by the pharmacy’s Authorized Representative.
  • The pharmacy must re-enroll and successfully complete the enrollment requirements every two years. The PAAS Vault can be utilized to store your enrollment forms and proof of training to ensure they are readily accessible for an audit. For more information on the PAAS Vault call 608-873-1342.
  • Have robust written policies and procedures which outline how your pharmacy will meet all program requirements including, but not limited to:
    • Checking for changes in a patient’s medication use and opioid tolerance
    • Documenting the patient’s around-the-clock opioid medication and RDA
    • Verifying the prescriber and the patient are enrolled in the TIRF REMS Program
    • Providing the patient with the product-specific Medication Guide and counseling
    • Reporting adverse events
    • Prohibiting the distribution, transfer, loaning or selling of TIRF medicines to other providers
  • For access to the full FDA TIRF REMS program information, access the FDA REMS online database

COVID-19 Oral Therapeutics Antiviral Billing Guidance

Two oral products have received Emergency Use Authorization for the treatment of COVID-19 infection – PaxlovidTM (Pfizer) and Molnupiravir (Merck). Both products are a 5-day course and are only authorized for dispensing pursuant to a patient-specific prescription or delegated collaborative practice agreement. Unfortunately, the FDA did not authorize independent prescribing by pharmacists.

Like the COVID-19 vaccines, oral therapeutics are purchased by the federal/state government and distributed to pharmacies at no cost. However, oral therapeutics are in very limited supply and only available to pharmacies that are part of the Federal Retail Pharmacy Program or directly from state health departments. Also, similar to the COVID-19 vaccine, oral therapeutics must be dispensed with no cost to the patient.

Billing

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Here are some excerpts from NCPDP Emergency Preparedness Guidance on billing for free product:

  • Ingredient Cost Submitted (NCPDP field 409-D9) of “$0.00” (you may need to use “$0.01”)
  • Basis of Cost Determination (423-DN) of “15”
  • Dispensing Fee Submitted (412-DC), submit your typical fee that you otherwise would for any other claim (e.g., $12.00)
  • Professional Service Code (440-E5) of “PE” due to extra consultation needed with these products
  • Incentive Amount Submitted (438-E3), submit additional fee associated with professional service code
Drug NDC Quantity Common Dosing Common Day Supply
PaxlovidTM 300 mg-100 mg tablet 00069-1085-30 30

20*

 3 tablets BID x 5 days

2 tablets BID x 5 days (renal)*

 5
Molnupiravir 200 mg capsule 00006-5055-06 40

*Renal dose adjustment for eGFR <60 but ≥ 30 mL/min

Reimbursement

While Medicare has covered COVID-19 vaccines under the Part B (medical) benefit, the oral therapeutics are a Part D (pharmacy) covered benefit. Medicare has not required plan sponsors to pay a dispensing fee, but instead “encourages” a dispensing fee. Commercial payers and Medicaid programs are expected to cover oral therapeutics under the pharmacy benefit and dispensing fee reimbursement may vary. The government has not required payers to cover oral products at all pharmacies and normal in-network limitations may apply.

Thus far, it appears that Part D Plans/PBMs are NOT providing reasonable reimbursement to pharmacies as evidenced by NCPA’s letter to CMS on January 18, 2022.

PAAS Tips:

New OTC COVID-19 Resources for Community Pharmacies

On February 2, PAAS National® announced new COVID-19 resources for PAAS Audit Assistance members to aid in billing commercial third-parties for OTC COVID-19 tests.

Members can access these tools, day supply charts, on demand webinars and more by logging into the PAAS Member Portal.

Not a member but interested in accessing COVID-19 tools available to you, click here. For member only tools call (608) 873-1342 to join today!

Caremark® Expands “Aberrant” Language & Restricts Bulk Purchases

As mentioned in PAAS’ December 2021 Newsline article about PBM provider manual updates, Caremark® traditionally mails a paper hardcopy of their full provider manual on even years, and only amendments on odd years. With 2022 being an even year, contracted pharmacies should have received a full paper copy of the 2022 provider manual.

In the 2020 Caremark® Provider Manual, section 3.02.03 was dedicated to explaining a provider’s obligation to not dispense aberrant quantities and volumes. Pharmacies are likely aware of the aberrant products list and Caremark’s arbitrary threshold of 25% (by dollar amount or number of Caremark® claims) which pharmacies were not allowed to exceed. Found within the same section in the 2022 manual, “Aberrant Quantities and Volumes” has been expanded and retitled to “Aberrant Practices and Trends”. The updated section title encompasses the five aberrant practices and trends for which Caremark® providers must not engage. In regards to the aberrant quantities and volume restrictions, Caremark® added language which goes beyond billing.

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Though the language in the manual was recently added, Caremark® has pursued these additional “aberrant practices” in the past. PAAS National® analysts have assisted pharmacies with audits which targeted claims billed for higher-cost medications (medications which had less expensive, more widely prescribed, equivalents from within the same therapeutic class). Caremark® has targeted pharmacies suspected of “fishing” for medications with the highest possible reimbursement rate, a practice which may easily trigger an audit due to the rapid adjudication and subsequent reversal of various medications within the same therapeutic class. These practices are formally listed as activities which may lead to claim chargebacks, Caremark® enforced remedies, and even contract termination.

Another section to be familiar with is section 8.05 which discusses bulk purchases. Anyone who has been through an invoice audit knows the importance of having enough purchased quantity (quantity “in”) to cover all the claims billed (quantity “out”) during the specified audit date range. Invoices from outside the audit date range may or may not be accepted depending on how far outside the audited date range the additional invoices are from and depending on the PBM. The 2022 Caremark® Provider Manual states that invoices from the audit date range, plus an additional 30 days prior to the listed range, must have sufficient product to cover all claims billed within the specified range. Caremark® states they will not count purchases from more than 30 days outside the audit date range toward product “in” unless the pharmacy previously notified Caremark® of these “bulk purchases” first by sending written request via mail within seven days prior to the purchase and Caremark® responds with a written approval. The postal address to which these requests must be sent can be found within section 8.05. The ridiculous process and audacity for such an anticompetitive policy is not lost on PAAS. We suspect there will be legal challenges to this language in the future. In the meantime, be cognizant of the requirement and consider flooding Caremark with “bulk purchase” requests.

PAAS Tips:

  • Familiarize yourself with the aberrant practices and trends Caremark® lays out within section 3.02.03 of their provider manual
    • Consider proactively adjust pharmacy practices (if necessary) to decrease the risk of an audit and potential contract termination
      • It is more difficult to adapt your business after a breach notice has been issued without further violating the Provider Agreement
    • Pharmacies must have a valid prescription for every claim billed; do not bill “test” claims
      • Different medications billed/reversed in quick succession with the same prescription number are an easy red flag for PBMs and auditors
    • Avoid unnecessary therapeutic substitutions to higher cost, less frequently prescribed, medications
    • If a substitution to a higher-costing medication is warranted, consider documenting the rationale
    • Refer to the full, paper copy of the manual or log in to the Caremark® Pharmacy Provider website (click on Document Library and scroll down until you find the 2022 manual) to read the complete text from the sections referenced above
    • If your pharmacy receives a breach notification, immediately send it to PAAS for guidance
  • Bulk purchases (i.e., purchases for a quantity covering more than a 30 day’ supply) may not count toward product “in” for a Caremark® invoice audit unless Caremark® first approves the pharmacy’s written request

West Virginia Community Pharmacists: Are you prepared?

There is a new Health Care Fraud Strike Force focused on uncovering fraud, waste and abuse in West Virginia.

The January 18th Department of Justice press release announced the launching of the Mountaineer Health Care Fraud Strike Force. At their first gathering they discussed fraudulent billing patterns and identified new targets. They plan to engage providers and insurers to recognize and report health care fraud.

Don’t miss your opportunity to be proactive and stay informed with PAAS Audit Assistance and the best FWA/HIPAA compliance program available, customized for community pharmacies.

Avoid being caught off-guard — one pharmacy recently paid $196,929 for self-reporting an employee that should have been excluded from participation!

“A pharmacy without the compliance program does not have their bases covered and required work finished. I can sleep at night knowing this program keeps me protected and on task.”

Transfer Prescriptions Continue to Be Targeted

Transferred prescriptions remain a common audit target, and pharmacies are facing recoupments due to missing information. Without having all required elements set in place by your state’s Board of Pharmacy, these claims are at risk of full recoupment by PBMs. Transferred prescriptions are easily identified and audited by the PBM due to the origin code.

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Pharmacies receiving a faxed document from another pharmacy for a transfer must ensure all transfer requirements are included. If any requirements are missing (e.g., including the word “transfer” in some cases), the pharmacy must verify and add the information. Relying on another pharmacy to include all transfer requirements is extremely risky and could result in audit recoupments. Be aware, some states require transferred prescriptions be “reduced to writing.” PBMs like Humana have recouped claims in these states when a faxed form was used.

When PBMs like Humana, OptumRx, and Elixir flag a transferred prescription discrepant, they not only go after that claim, but all the refills under that prescription as well. Very quickly a small error can result in thousands of dollars facing recoupment.

Another way transferred prescriptions present audit risk is the invalid entry of the written date. If the receiving pharmacy fails to enter the actual written date of the prescription, the pharmacy could potentially refill past expiration. Make sure your staff is aware of the importance of entering accurate dates. PBMs are also flagging transferred insulin prescriptions if the quantity does not indicate a unit of measure (i.e., mL, pens, boxes or units).

PAAS Tips:

  • Check your state’s Board of Pharmacy transfer requirements and have printed for reference
  • Educate all staff on your state’s prescription transfer requirements
  • Pre-printed prescription pads with all your state’s transfer requirements can be very beneficial
  • Pharmacies using an internal transfer screen to capture the requirements must include this during an audit
  • See the Newsline’s Self-Audit Series #6 for monitoring your transfers internally

Self-Audit Series #12: Invoice Audits

PBMs have dramatically increased the number of invoice audits conducted and some pharmacies continue to be at risk for significant financial recoupments and contract terminations. It is not uncommon for invoice audit results to exceed six figures. To reduce the risk of your pharmacy having problems during a PBM invoice audit, consider performing a mock audit on your practice. The PBM is simply comparing the “ins” and “outs” of your pharmacy inventory for a specific period. If your “ins” are less than your “outs” for the PBM auditing, they conclude you have a shortage and will initiate recoupment. The “ins” are your acquisitions, or purchases, from wholesalers, manufacturers, trade shows or other pharmacies (note: there is no accounting for inventory on-hand). The “outs” are the claims that you billed to the PBM conducting the audit as well as any returns. The PBM already has the billed claims for the defined window, so when they initiate the invoice audit, they’re typically just in need of your purchasing history. Several PBMs, including OptumRx®, Elixir®, and Express Scripts® may even require the pharmacy to submit a full dispensing history for further reconciliation. Follow the tips below to reduce the risk of your pharmacy having problems during a PBM invoice audit.

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PAAS Tips:

  • Create and maintain a list of all wholesalers from who you purchased prescription, over-the-counter (OTC) and supply items that are billed to third parties
  • Verify that wholesalers are licensed in your state, National Association of Boards of Pharmacy (NABP)  Drug Distributor accredited, and can provide pedigrees in accordance with FDA Track and Trace Law
    • OptumRx requires network pharmacies source both prescription and OTC products from a supplier that is a licensed drug wholesaler in your state AND meets accreditation
    • Caremark and Express Scripts both require network pharmacies only purchase diabetic supplies from suppliers that are identified as “authorized distributors” by the manufacturers. Please refer to the July 2021 Newsline article, Life Scan Hires Law Firm to Pursue Pharmacies Purchasing from Unauthorized Distributors for manufacturer links to their authorized distributor lists.
  • Bulk purchases made outside the invoice audit date range are not always accepted by the PBM to account for additional inventory
    • CVS Caremark’s 2022 Provider Manual explicitly calls out bulk purchases of more than 30 days of inventory need to be preapproved, in writing [PAAS views the requirement as absurd and strongly opposes it]
  • Limit or eliminate the amount of inventory acquired from other pharmacies
    • If you must purchase inventory from another pharmacy, be aware of Drug Supply Chain Security Act (DSCSA) exceptions and keep good records of inventory acquisition, including proof of payment
  • Retain access to invoices and proof of payment for 10 years to coincide with Medicare Part D record retention requirements
  • Bill accurate NDC on all claims – all 11 digits are important
  • Bill accurate quantity on all claims – call PAAS National® (608) 873-1342 if unsure about billing unit or package size
  • Check your will-call bins to ensure that you are adhering to your Return to Stock (RTS) Policy, reverse any claims that are exceeding PBM limits
  • Verify that pharmacy management software has products marked as “active” only if you have physical product on the shelf to reduce data entry errors
  • Read the Self-Audit Series #12: Invoice Audit  Newsline article from January 2020 on how to perform a self-audit on invoices
  • See our Self-Audit Mindset document available on our portal for additional guidance