Express Scripts Reminds Pharmacies of Copay Collection Obligations

Express Scripts sent a memo to network providers the middle of October, pertaining to copayment collection, to ensure requirements are being met in the appropriate manner. There is emphasis placed on network providers being adherent to Section 2.3 of the ESI Provider Manual stating “Network Providers agree that it shall collect the full Copayment from Members, and that the Copayment is not changed or waived unless required by law”. The memo also discusses what documentation is required in case of an audit, which includes credit card receipt, point of sale (POS) receipt which reflects cash payment, and/or copy of cancelled check.

As a reminder, Express Scripts, in addition to other PBMs, reserve the right to terminate your provider status if failure to collect copays is discovered.

PAAS Tips:

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  • Refer to the Provider Manuals of other PBMs regarding their copayment policies. The top PBMs and their corresponding Provider Manual sections are listed below:
    • Caremark: Section 3.03.04
    • Prime Therapeutics: Section 3: Claims Processing
    • OptumRx: V. Processing Claims, Section Q: Collection of Members Cost-Sharing Amount
    • Elixir: mentioned in sections pertaining to “suspensions and terminations”, and “reimbursement and cost share”
  • Review the following Newsline articles:
  • PAAS Fraud, Waste, and Abuse and HIPAA Compliance members can reference Section 4.1.5 within their Policy and Procedure Manual for a copay collection policy which corresponds to the response to question 12 on the policy and procedure manual questionnaire.

What Do Bowel Preps, EpiPen®, and Migraine Medications Have in Common?

Prescriptions for medications whose dosing is standardized in the industry often come with directions that simply state, “Use as directed.” These types of products typically have the standard dosing right on the package being dispensed to the patient like bowel preps for colonoscopy, EpiPen®, starter dose kits (e.g., Eliquis® 30-Day Starter Pack), and dose packs (e.g., Medrol® DosepakTM). Similarly, migraine rescue medications, insulin with a sliding scale, and topical medications tend to be generically written with directions that have no mathematical way to calculate the days’ supply.

Auditors require

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directions specific for the individual patient and those directions should be mathematically calculable to bill a proper days’ supply. Directions that come over as “Use as directed” should always be clarified with the prescriber as to whether or not the patient is to “use as directed per package instructions” in addition to updating the patient label directions accordingly. Medications that can be repeated after a certain amount of time (e.g., EpiPen®, migraine medications, Nitrostat®, and Diastat®) will need that information noted in the directions in order to include the additional dose(s) in the days’ supply calculation. Insulin with a sliding scale or topical medications should include maximum daily dose information in the directions and on the patient label.

PAAS Tips:

  • ALWAYS clarify “Use as directed” or “as needed” directions.
  • Clarify starter kits, dose packs, and bowel preps as “Use as directed per package” or with specific directions.
  • Migraine rescue medications should have the maximum number of tablets allowed per day, per week, or per month clarified with the prescriber. Check out the December 2021 Newsline article, Self-Audit Series #11 – Migraine Prescriptions to read more.
  • Topical medications should have mathematically calculable directions. See the November 2021 Newsline article, Calculating the Incalculable – Your Math Teacher Was Right (Show Your Math) for more.
  • Insulin with sliding scale directions should have maximum units per day listed.
  • Any clarification made to the directions needs to be documented with a clinical note AND be on the patient label directions.

DMEPOS Mini-Series #8 – The Six Medicare Auditing Entities and Their Purpose

The six Medicare auditing entities are responsible for auditing records, claims and payments. While they may use different methods to conduct audits, they all aim to detect, correct, and prevent improper payments to curb fraud, waste, and abuse and protect the Medicare Trust Fund. The Medicare Program Integrity Manual contains the policies and responsibilities for the entities tasked with medical and payment review.

What is the rationale for having these auditing entities? Taxpayers and future Medicare beneficiaries benefit when Medicare payments are returned to the Medicare Trust Fund. Subsequently, these audits lower the Medicare payment error rates. On occasion, pharmacies can benefit if there are any underpayments identified during an audit, in which case those dollars will be repaid to the pharmacy.

Listed below are six Medicare contractors that conduct audits and their main objectives:

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  1. MAC – Medicare Administrative Contractor
    1. Goal is to process claims for a defined jurisdiction
    2. Reviews claims on a pre-payment and post-payment basis
    3. Identify noncompliance with coverage, coding, payment, and billing policies through data analysis
    4. Take action to prevent and address improper payments
  2. UPIC – Unified Program Integrity Contractor
    1. Goal is to investigate cases of suspected FWA
    2. Take action to recoup inappropriate Medicare payments
    3. Ensure the integrity of claims under all lines of Medicare business
  3. SMRC – Supplemental Medical Review Contractor
    1. Goal is to lower the improper payment rates by conducting nationwide medical reviews with documentation requests
  4. CERT – Comprehensive Error Rate Testing Contractor
    1. Goal is to collect documentation and perform reviews on random samples of Medicare FFS claims post-payment
    2. Determine whether claims were paid appropriately based on Medicare coverage, coding, and billing rules in place
    3. Produces the improper payment rates to the MACs who can repay underpayments and recoup overpayments
  5. RAC – Recovery Audit Contractor
    1. Goal is to identify overpayments and underpayments by conducting automated and complex reviews on a post-payment basis
      1. Automated – no medical records needed
      2. Complex – medical records required
    2. OIG – Office of Inspector General
      1. Goal is to lead efforts to fight FWA
      2. Develop and distribute resources to help the health industry comply with FWA laws
      3. Education the public about fraudulent schemes
      4. Responsible for reporting to both the Secretary of Health and Human Services (HHS) and Congress and to provide recommendations to correct FWA

PAAS Tips:

  • Be prepared with FWA policies and procedures, should you not have a compliance program in place, learn more about PAAS’ Fraud, Waste & Abuse and HIPAA Compliance program or contact our office at 608-873-1342
  • Reminder: Send your Medicare Part B audits to PAAS! info@paasnational.com or fax (608) 873-4009 and we can advise what documentation is being requested and help navigate the Medicare Part B requirements and responses to audits.

Navigating PBM Audits

Working collaboratively can be key to either avoiding a PBM audit altogether or making the process as painless as possible.

Read more

Be on the Lookout for OptumRx Unannounced Onsite Audits

Receiving a PBM onsite audit notice can be intimidating but the pharmacy typically has some time to prepare before the auditor arrives. However, are you aware that pharmacies can receive unannounced onsite visits from PBMs, FDA inspectors, DEA agents or Board of Pharmacy inspectors? Being prepared for an unannounced audit is crucial and PAAS National® wants to make sure you have the tools to be successful. PAAS has become aware that OptumRx is again performing their unannounced onsite audits, see the tips below to help you be prepared should you get an unexpected visit.

PAAS Tips:

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  • Utilize our Onsite Credentialing Guidelines resource
    • Provides a list of frequently asked questions from the PBM auditors
    • Includes references to the PAAS National® Policy and Procedure Manual for our Fraud, Waste & Abuse and HIPAA Compliance members
  • These audits typically focus on credentialing requirements and not prescription review
  • Auditors may check licenses, on-hand stock of certain medications and may ask permission to take a few photos – If you are a PAAS Vault member and have uploaded licenses to the portal, those licenses are available at your fingertips
  • Two auditors may be present, and the visit is usually about 30 minutes
  • See the OptumRx Provider Manual for more information regarding an onsite audit.
    • “Administrator or its designee shall have the right, with or without notice, at reasonable times, to access, inspect, and review on-site the facilities, licenses and credentialing documents/records of Network Pharmacy Providers and pharmacy locations applying to participate in any of Administrator’s Benefit Plans, as well as make copies of the licenses credentialing documents/records etc. maintained by pharmacy. Pharmacy agrees to cooperate with Administrator or its designee with the on-site visit and acknowledges non-cooperation with an on-site visit may result in denial or termination of network participation.”
  • See the July 2022 Newsline, Is Your Pharmacy Ready for an Unannounced Audit?

Don’t have an FWA/HIPAA Compliance Program? Contact PAAS and receive a $126 discount when you combine services with your audit assistance. Get started today? info@paasnational.com or (608) 873-1342.

Fraud, Waste, and Abuse Compliance Programs Are Not Optional

PAAS National® analysts continue to see audits requesting documentation of compliance policies and procedures. FWA Training and OIG/GSA exclusion checks are not enough to be compliant as they do not constitute a compliance program. Since 2009, PAAS’ Fraud, Waste & Abuse and HIPAA Compliance program has been designed to meet CMS’ seven core elements required to adopt and implement an effective compliance program, which include:

  1. Written Policies, Procedures and Standards of Conduct
  2. Compliance Officer, Compliance Committee and High-Level Oversight
  3. Effective Training and Education
  4. Effective Lines of Communication
  5. Well Publicized Disciplinary Standards
  6. Effective System for Routine Monitoring and Identification of Compliance Risk
  7. Procedures and System for Prompt Response to Compliance Issues

PBM Provider Agreements require pharmacies to have a compliance program that meets CMS standards, and they reserve the right to request documentation of your compliance policies and procedures.

Consider the following:

  • OptumRx Section VIII Compliance; Fraud, Waste and Abuse (FWA); General Training; Audits – “A Network Pharmacy Provider involved in providing services for Medicare Part D/Medicaid Members is responsible for implementing a program to control FWA and to facilitate compliance in the delivery of Covered Prescription Services through the Medicare/Medicaid benefits.”
  • Humana’s Compliance Policy for Contracted Healthcare Providers – The Policy explicitly states pharmacies must have a compliance program that meets the seven elements outlined by CMS, including written policies, procedures and standards of conduct.
  • PerformRx Pharmacy Compliance Attestation – PerformRx requires attestations to the following: The pharmacy has implemented and maintains a compliance program that is consistent, at minimum, with applicable federal and state requirements, including, but not limited to the standards set forth in 42 CFR §423.504(b)(4)(vi) and other Centers for Medicare & Medicaid Services (CMS) guidance set forth in the Medicare Part D Prescription Drug Benefit Manual.
  • While not public, Express Scripts and Caremark also have explicit language to require a compliance program. See Caremark’s Provider Manual, Section 10.01.06 FWA program and Express Scripts Provider Manual with regards to maintaining a compliance program in accordance with CMS requirements.

Ensure you have all your compliance bases met so you can provide proof when requested for credentialing or audit. Don’t have an FWA/HIPAA Compliance Program? Contact PAAS, info@paasnational.com or (608) 873-1342 and get started today!

Caremark Bulk Purchase Requirements

As 2022 comes to a close, we know that many pharmacies will make “bulk purchases” ahead of the new year in anticipation of price increases or to obtain wholesaler rebates. Remember that Caremark requires pharmacies to provide notice of any bulk purchases that may impact future invoice audits, in accordance with Section 8.05 of the Caremark Provider Manual.

If your pharmacy plans to make any large purchases, be sure to

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notify Caremark by mail or email within 21 days after the purchase and provide the following information:

  1. Pharmacy NCPDP
  2. Contact email address
  3. Drug name
  4. NDC
  5. Total quantity purchased
  6. Name of wholesaler used

Pharmacies should submit notifications to the addresses provided below.

Email:    PharmacyAudit@CVSHealth.com

Mail:
CVS Caremark
Attn: Bulk Purchase Notification, MC 020
9501 E. Shea Blvd. Scottsdale, AZ 85260

PAAS National® analysts have seen a few Caremark response letters that state the following, “review of the recent purchases made show they are routine in nature and would not be considered a bulk purchase”. It is unclear what criteria are used to make this determination; however, PAAS believes it is in your best interest to submit such notifications when the purchases are larger than what is “normal” for your pharmacy. We suggest that pharmacies retain this response from Caremark such that you could use it in the event of a future audit to demand that these purchases are included.

Lastly, some pharmacies have been confused by automatic email replies from Caremark with subject of Automatic Reply: Pharmacy Audit and the body of the email stating that the email address is a general mailbox for potential pharmacy audit issues and provides further instructions on how to submit “internal requests” and “external requests”. PAAS has confirmed that these are simply automatically generated replies and that pharmacies will receive a response specific to the bulk purchase notification within a few days.

PAAS Tips:

On-Demand Webinar: Don’t Give PBMs a Reason to Audit (Or Terminate): Off-Label Drug Use and Compliance Requirements

On November 9, 2022 PAAS National® hosted “Don’t give PBMs a reason to audit (or terminate): Off-label drug use and compliance requirements” webinar. PAAS Audit Assistance members have access to the recorded webinar, in addition to many other tools and resources on the PAAS Member Portal.

For easy viewing, we’ve split the webinar into three separate recordings.

  1. PBM Fraud, Waste & Abuse Compliance Program Requirements
  2. Does My Pharmacy Really Need Cultural Competency Training?
  3. What are the Audit Risks for Dispensing Prescriptions Off-Label? which includes:
    • Can Ozempic® and MounjaroTM be used off-label for weight loss?

Pharmacy to Pharmacy Inventory Transfers – Buyer Beware!

Drug shortages are pervasive to pharmacy practice – NCPA just reported an astonishing 98% of community pharmacies are experiencing drug shortages. As entrepreneurs, community pharmacy owners have always found creative ways to take care of patients. Pharmacy to pharmacy transfers are commonplace in the industry, but much has changed since Lipitor® and Prevacid® were used as currency in a legal drug exchange.

The Drug Quality and Security Act was enacted by Congress November 27, 2013. Title II of this Act was the Drug Supply Chain Security Act (DSCSA), which “outlines steps to achieve interoperable, electronic tracing of products at the package level to identify and trace certain prescription drugs as they are distributed in the United States”. The goal of the DSCSA is to secure the US drug supply chain and protect consumers from exposure to drugs that may be counterfeit, stolen, contaminated, or otherwise harmful. The FDA expects that the vast majority of prescription drug products, that are ultimately dispensed to US consumers, have flowed through the “tracked” and “traced” supply chain. The law provides for very limited exceptions where prescription medications can be sourced outside of the tracked and traced system.

In an FAQ published by the FDA, the issue of pharmacy to pharmacy transfers is addressed:

When a pharmacy sells a product to another pharmacy, do the DSCSA product tracing requirements related to transaction history, transaction information and transaction statements apply?

Yes, except for sales by a dispenser to another dispenser to fulfill a specific patient need. The law defines a “specific patient need” as the transfer of a product from one pharmacy to another to fill a prescription for an identified patient and does not include the transfer of a product from one pharmacy to another for the purpose of increasing or replenishing stock in anticipation of a potential need. You can find more information in sections 581(19) and 582(d)(1)(A)(ii) of the FD&C Act.

So, what does this mean for your pharmacy?

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If you receive a prescription for a medication that you do not have in stock, you can purchase this medication from another pharmacy and are not required to obtain the tracing information.

However, if it’s not for a specific patient need, or for an amount that exceeds the prescription in question, it is likely not exempt from tracing requirements. With gross margin compression, it’s understandable that pharmacies may use marketplaces like MatchRx, Rxeed, EzriRx or others to find deals, but you must consider DSCSA requirements (i.e., not for anticipatory needs unless you’re obtaining tracing information). These marketplaces claim DSCSA compliance pursuant to a specific patient need (see Rxeed, MatchRx, and EzriRx).

Interestingly, both MatchRx and EzriRx use an identical “industry interpretation”:

Industry interpretation for Specific Patient Need includes situations in which a dispenser has a prescription in hand for an identified patient, a recurring prescription for an identified patient, or written/electronic notice from a provider that a prescription for an identified patient is forthcoming.

What’s not a specific patient need? Any time you are increasing or replenishing stock instead of dispensing the product when you receive it. On an invoice audit, PBMs expect a product to be dispensed in short order if the pharmacy is claiming exemption from tracing requirements pursuant to a specific patient need.

Here is an excerpt directly from the OptumRx Provider Manual:

‘Any inter-pharmacy transfers or purchases made through intermediary third parties or marketplaces for the purpose of increasing or replenishing stock, and not made to fulfill a specific patient need for an identified patient, are subject to the requirement to obtain transaction history, transaction information, and a transaction statement for the product.’

The industry interpretation language for “a recurring prescription for an identified patient” has no direct reference and is not likely to hold weight with PBMs as they interpret laws as they see fit. Absent state/federal regulations to the contrary, pharmacies will have a hard time convincing PBMs that a specific purchase transaction is exempt from tracing requirements for a recurring prescription dispensed several weeks, if not months, later.

Another exemption that these marketplaces reference is purchases under a declared public health emergency (PHE). While pharmacies have become accustomed to the term since COVID, there are a multitude of currently declared PHEs ongoing simultaneously, including the Opioid Crisis (since 2017) and now Monkey Pox (2022). However, the exemption only applies when the drug shortage is a result of the PHE. Under DSCSA 581(24)(B)(iii) it states:

‘the distribution of a product for emergency medical reasons including a public health emergency declaration pursuant to section 319 of the Public Health Service Act, except that a drug shortage not caused by a public health emergency shall not constitute an emergency medical reason;’

If you are purchasing a medication that is not for a specific patient need, and readily available from your primary wholesaler, it would be difficult for a pharmacy to demonstrate that they were exempt from tracing requirements in a pharmacy-to-pharmacy transaction as a result of a drug shortage related to the PHE.

Regardless, when purchasing non-controlled inventory from another pharmacy, documentation should include:

  • Pharmacy name, address, and NCPDP number transferring from
  • Drug name, quantity, lot number, expiration date, and NDC number should all be included on the transfer invoice
  • Date of transfer and date of receipt of drug
  • Reason for transfer (e.g., complete Rx #1234)
  • Method or proof of payment (check # or credit card receipt)

Invoice shortages or invalid purchases put claims at risk of recoupment and may lead to the pharmacy having to implement a corrective action plan. In some cases, shortages can even lead to contract termination. Be sure you consider all the risks when making purchases to supplement your primary wholesaler. Would you be able to show DSCSA compliance (or exemption) and provide all required documentation necessary in case of an audit?

PAAS Tips:

  • Anticipatory purchasing from another pharmacy to restock supply requires DSCSA tracing information
  • DSCSA exemptions for PHEs apply only when the drug being purchased is in short supply due to the PHE
  • When purchasing for a Specific Patient Need, make sure to document accordingly and only procure the necessary amount for the prescription
  • Be sure to retain all supporting documentation related to the purchase and have accessible in the event of an invoice audit

Authorized Distributors of OTC Diabetic Test Devices

Most pharmacies are familiar with the basic requirements of the Drug Supply Chain Security Act (DSCSA), including the requirement to purchase prescription products from authorized suppliers. However, one important caveat of the DSCSA is that it does not apply to OTC products (such as diabetic test strips). Because of this, OTC wholesalers and distributors do not have to maintain or provide track and trace information (pedigree) to confirm the authenticity of these products. This makes it difficult for pharmacies to determine if they are purchasing from an appropriate source and if the low prices offered are for legitimate product.

During a PBM invoice audit, purchases made from suppliers that are not identified as “authorized” may not be accepted and you may be found to have a shortage leading to significant financial recoupments and possible network termination.

PAAS Tips:

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  • Both Express Scripts and Caremark have required pharmacies to purchase test strips from “authorized distributors” of the manufacturer since 2016
  • OptumRx requires pharmacies purchase from suppliers that are licensed wholesalers and have NABP Drug Distributor Accreditation (DDA) formerly known as VAWD
  • Note that VAWD/DDA is not synonymous with “authorized distributor” status
    • For example, Masters Pharmaceutical has NABP DDA status but is NOT an authorized distributor of diabetic test strips
    • Some pharmacies have made the mistake of seeing “McKesson” on authorized distributor list and assumed that a subsidiary such as “Masters” is also authorized, even though not explicitly listed as such – if not explicitly listed, then confirm before purchasing
  • See August 2021 article Invoice Audit Pitfalls – Are Your Wholesalers Legitimate? for additional invoice audit considerations