Are You Prepared for an OTC COVID-19 Test Audit?

Billing and dispensing OTC COVID-19 tests is widespread throughout community pharmacies. PAAS National® wants to make sure pharmacies are prepared to provide the correct documentation in case of an audit. To date, PAAS has seen:

  • Desk/invoice audits from Caremark, MedImpact and Prime Therapeutics,
  • Regular desk audits from Humana

While the dollar amount of these claims does not seem audit worthy, PBMs are checking for Fraud, Waste and Abuse and contract violations. The PBMs have been known to reach out to the member to verify quantity, manufacturer, and proof of receiving the test kits from the pharmacy.

PAAS has created a COVID-19 Resources section for our members on the PAAS Member Portal. Here you can find the Medicare and Commercially-Insured Patient Request and Attestation for OTC COVID-19 Test Billing and Frequently Asked Questions . These documents have been created for our members to help answer questions and ease the documentation burden so pharmacies can save time and be audit ready.

What documentation to have in case of an audit:

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  1. Prescription – While a prescription to bill an OTC COVID-19 Test Kit is not required per the PREP Act, one of the following should be provided as a “placeholder prescription”:
    • A backtag (which preferably has patent demographics, manufacturer of test, quantity, SIG, date, and dispensing pharmacist) with documentation “per PREP Act”
    • A copy of a protocol with a backtag attached
    • A copy of our patient request and attestation (pharmacy claim info on bottom of form may serve as a “placeholder prescription” with a backtag attached)
  2. Proof of Patient/Caregiver Request
    • Medicare and Commercially Insured Patient Request Attestation for OTC COVID-19 Test Billing is available on the PAAS Member Portal. Medicare states, “pharmacies must keep good documentation of the patient’s request for the tests and failure to provide such documentation could result in claim reversal and additional administrative actions”. PAAS recommends obtaining this request for all PBMs.
    • By signing the attestation, the patient is attesting
      • The tests are for personal use for indicated patient(s) on the form,
      • The tests are not for employer or travel purposes
      • The tests are not for children < 2 years old
      • The patient will not resell the tests provided under their benefit
      • The cost of the tests is not being covered by any other source
      • The patient has not requested OTC COVID-19 tests from any other provider in the current calendar month
  1. Proof of Dispensing
    • Provide a valid signature/delivery log showing the patient received the tests

PAAS Tips:

  • Only tests that have been authorized by the FDA should be billed and dispensed. You can find a list of authorized tests here
  • See the CMS website for further guidance on billing Medicare for OTC COVID-19 tests
  • Be sure you are ordering OTC COVID-19 tests from a reputable wholesaler, see our January 2022 Newsline article, Self-Audit Series #12:Invoice Audits
  • The claim submitted to the PBM must match the NDC/UPC of the product dispensed
  • Package size must be divisible by the quantity being dispensed

MounjaroTM Off-Label Use for Weight Loss Spells T-R-O-U-B-L-E

PAAS National® analysts have received many phone calls regarding prescriptions for MounjaroTM – in most cases the medication is suspected of being used “off-label” for weight loss. While off-label use by prescribers is commonplace, what’s different for MounjaroTM is the frequency and expense; making it an attractive audit target. This poses significant risk of payment recovery, regardless of the payor.

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We strongly advise pharmacies to confirm (and document) whether patients have a diagnosis of type 2 diabetes as that is the only FDA-approved indication as of October 2022 (although Lilly has received a fast track designation from the FDA in review for obesity).

  • If you have a diabetes diagnosis, or antidiabetic medications on the patient’s profile, you have less to worry about and should not need to do any extra leg work.
  • If the patient profile is void of any diabetes medications, a due diligence phone call to the prescriber’s office to confirm diagnosis is the safest approach.
    • Keep in mind pre-diabetes is not an approved diagnosis code for MounjaroTM.

The risk of audit recoupment varies by payor type as described below.

Medicaid and Medicare Part D

Medicaid and Medicare only pay for products when used for medically accepted indications. Claims for off-label use are not covered as per coverage limitations outlined in the Social Security Act. See the March 2022 article Off-Label Use Not Covered under Medicare Part D for additional discussion.

Commercial

Commercial payors have more flexibility to cover off-label uses, if they choose, as coverage criteria is not limited by federal law. However, many private insurers do not cover “lifestyle drugs” for sexual dysfunction, wrinkles or weight loss. Pharmacies should not assume that a claim paid at adjudication (without any type of utilization management tools such as prior authorization or diagnosis code restriction) will remain paid.

Payors assume prescriptions are for the medically accepted indication and respond with paid claims, often without special coverage hurdles to jump through. This results in a pay and chase audit method and PBMs could come back in an audit 1-2 years later stating that the pharmacy “should have known” the drug wasn’t truly covered. Would you be surprised if the PBMs were setting a trap for you?

Let’s look at what OptumRx®, Express Scripts®, Caremark® and have to say about off-label use:

  • OptumRx® defines a “Clean Claim as follows:
    • Prescription claims with active ingredients [active ingredients not defined] which are not being used for a documentable medically accepted indication or for which the Prescriber is unable to provide adequate documentation for the basis of use may not be considered a Clean Claim. For example, a claim that utilizes atypical directions for drug products which conflict with typical drug information available in pharmacy systems for patient education without medical necessity and of limited clinical value.
  • Express Scripts – Section 10 of the Provider Manual discusses Plan Sponsor Specific Requirements, and 10.5 address Prime Therapeutics. Under General Claims Submission Policies, Prime addresses “Appropriate Dispensing Practices” and puts the onus on Providers to determine if “claims are submitted for a valid use of a medication”. Auditors may request documentation to support appropriate dispensing of medications.
  • Caremark – does not directly address off-label use within the Provider Manual but states the Provider must comply with the Terms and Conditions of any Pharmaceutical Manufacturer Coupon Program being used.

Pharmaceutical Manufacturer Coupons

Pharmacies (and patients) must also be aware of manufacturer savings card “Terms and Conditions” that also limit coverage.

  • First, to obtain a savings card from the manufacturer website, patients must confirm their eligibility by checking a box stating, ‘I confirm that I have a Mounjaro prescription for Type 2 Diabetes.’
  • Second, the printed savings card has Terms and Conditions that spell out that patients must have a prescription “consistent with FDA-approved product labeling”.
  • Third, the savings card is only for patients with commercial insurance, and we have heard some pharmacies trying to use an in-house discount program as “primary” so they can then bill a “secondary” claim to the savings card. While the claims processor for the savings card cannot readily identify the primary payer, this workaround to gain coverage for the uninsured patient could result in an accusation that the pharmacy committed fraud – something PAAS has seen with other coupon card Sponsors.

As MounjaroTM has recently entered the market, we have not seen any PBM or manufacturer recoupments due to off-label use; however, if pharmacies overlook the fine print in PBM Provider Manuals and manufacturer Terms and Conditions, it could spell T-R-O-U-B-L-E.

PAAS Tips:

How Can I Avoid Humana Audits for Deceased Patients?

Humana has recently sent out audits to pharmacies with a subject line stating Review of claim(s) billed after member’s deceased date. This review is taking place, sometimes more than a year after the date of service, because some Medicare Part D claims were paid after a beneficiary passed away. Why would Humana wait so long to review these claims, and why did they not stop them at point of sale? Unfortunately, there is usually significant lag time from when a patient passes away to when this information is reported to the Social Security Administration, and then to CMS and Plan Sponsors.

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To combat these recoupments, pharmacies are allowed to submit documentation to demonstrate the claim was billed appropriately. If the date of service is within 14 days from the deceased date for retail claims, or within 32 days from the deceased date for long-term care claims, a pharmacy can send signed proof of delivery or a signature log showing someone received the medication on the patient’s behalf. If the deceased date is incorrect on Humana’s records, an obituary showing the correct date of death can be sent.

There are some things you can do to help avoid these situations to begin with.

PAAS Tips:

Caremark Cease and Desist Letters – Trudhesa®

PAAS National® analysts have recently assisted a few pharmacies that received “Cease and Desist” Letters from Caremark related to dispensing Trudhesa® nasal spray for migraines. The strongly worded letters alleged that pharmacies were in violation of the Provider Agreement and various sections of the Provider Manual.

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Caremark alleged that pharmacies had allowed a “pharmaceutical hub” to use the pharmacy’s identity or billing information to submit claims and outsourced the collection of patient copays. Additionally, Caremark demanded that pharmacies immediately cease these violating actions and reverse all offending prescription claims.

Purportedly, all prescriptions for Trudhesa® were received as transfers from a hub pharmacy such as Phil, Carepoint Pharmacy, or ASPN pharmacies which appear to be “digital pharmacies” and the only way that Trudhesa® is available per the manufacturer website.

Pharmacies that are not responsive to Caremark’s demands may face network termination.

PAAS Tips:

  • Be very cautious when receiving transfer prescriptions from hub pharmacies
  • Review Caremark Provider Manual section 4.12 to learn about acceptable practices related to pharmaceutical hubs

LIVE WEBINAR NOVEMBER 9th – Sign Up Today!

Join President of PAAS National®, Trenton Thiede, PharmD, MBA for a LIVE webinar “Don’t give PBMs a reason to audit (or terminate): Off-label drug use and compliance requirements” on November 9, 2022 from 2:00-3:00 pm CT as he answers:

  • What are the audit risks for dispensing prescriptions off-label?
  • Can Ozempic® and MounjaroTM be used off-label for weight loss?
  • What do PBMs require for Fraud, Waste & Abuse Compliance?
  • Does my pharmacy need to complete cultural competency training?

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.

SIGN UP TODAY!

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

Does My Pharmacy Really Need Cultural Competency Training?

As a reminder, pharmacies are now required, as part of their NCPDP profile, to address if the pharmacy maintains evidence of cultural competency training. With the current staffing environment, all pharmacies want to know: do I really need to complete cultural competency training? Beyond NCPDP credentialing, here’s some additional consideration:

  • There are numerous federal laws and regulations related to discrimination and cultural competence – pharmacies must take reasonable steps to provide equal access to care across all patient populations.
    • Pharmacy staff cannot be expected to provide equivalent services if they don’t know the legal requirements or your pharmacy’s expectations. This alone makes staff training an absolute must.
  • Prior to NCPDP requesting Cultural Competency training status, PBMs were requiring pharmacies to attest directly. Now they’re pulling data from NCPDP without having you attest – make sure your NCPDP profile is up to date!
    • Humana still requires a direct attestation and additional training in states where they administer Medicaid Managed Care.

PAAS National® understands community pharmacies are short on time and resources. We’ve condensed more than 3 hours’ worth of training down to under an hour. The training is practical, and pragmatic – written by community pharmacists for the independent practice setting. PAAS’ Cultural Competency Training helps provide pharmacies a means to meet federal requirements, plus a certificate of completion, easily retrievable via the PAAS Member Portal.

As nondiscrimination in healthcare programs become increasingly important (and litigious), pharmacies need to position themselves to be culturally competent healthcare providers. This is further evidenced by the Department of Health & Human Services Office for Civil Rights (OCR) looking to revise the implementation guidelines of Section 1557 in addition to sanctions for pharmacies not capable to serve patients based on individual needs.

PAAS Tips:

Are You Utilizing DAW Codes Correctly? Updated Tool Available!

In the September Newsline article, NCPDP Updates DAW Code Definitions to Encompass Interchangeable Biosimilars, you can find updated guidance for the utilization of Dispense As Written (DAW) codes with biologic drug products based on the August 2022 version of NCPDP Telecommunications Version D and Above Questions, Answers and Editorial Updates, set to go into effect October 15, 2023. Though the definitions were revised to include biologic drug products, the guidance holds true for all legend drugs. Now is the time to refamiliarize yourself with the best-practices for using DAW codes and to review DAW code audit pitfalls most seen by PAAS National® analysts. Additionally, the DAW Codes Explained tool has undergone a major overhaul to now include helpful tables, expanded DAW code definitions, PAAS tips, billing examples, and additional resources all in one place.

DAW Code Best Practices

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  • Single-source drug products (a brand or reference product with no available equivalent in the marketplace) should always be billed with DAW 0.
  • Prescriptions written for a brand or reference product (which has a generic, authorized generic, interchangeable biosimilar, or “unbranded biologic” available in the marketplace) with Dispense as Written or Brand Necessary indicated in a manner compliant with state regulation should be billed with DAW 1.
  • According to NCPDP guidance, when the prescriber allows for generic substitution, but the brand or reference product is billed for a multi-source drug, DAW 0 would be inappropriate. Most payers have historically accepted DAW 0, but it may have affected reimbursement rates. Instead, the brand or reference product would be more accurately billed utilizing DAW 2 through 9:
    • DAW 2 if the patient prefers the brand or reference product.
    • DAW 3 if the pharmacist believes the brand or reference product should be dispensed (this is rarely used).
    • DAW 4 if the generic or interchangeable biosimilar is not stocked in the pharmacy.
    • DAW 5 if the pharmacist is utilizing the brand or reference product as the generic or interchangeable biosimilar entity (e.g., using a brand name such as Amoxil® as your generic amoxicillin).
    • DAW 6 if indicated by plan adjudication logic.
    • DAW 7 if state law or regulation prohibits substitution of a brand or reference product despite an equivalent being available in the marketplace.
    • DAW 8 when the generic or interchangeable biosimilar is not available in the marketplace.
    • DAW 9 when the plan prefers the brand or reference product.

DAW Code Audit Pitfalls to Avoid

  • Be sure substitutions are made between appropriate drug products. If you are unsure if two products are equivalent, utilize the FDA Orange Book (non-biologic drug products) or FDA Purple Book (biologic drug products) to verify.
  • Check your state regulations or with your state Board of Pharmacy if you are unsure of the proper DAW 1 documentation requirements. Auditors will utilize state regulations to recoup when possible and law violations are difficult to appeal.
  • Watch for electronic prescriptions submitted with erroneous DAW 1 codes. Billing a single-source product with a DAW other than zero is a red flag. It is best to avoid this pitfall because it could be just what the PBM needs to open an audit at your location. For more details, refer to the August 2022 Newsline, Erroneous DAW-1 Electronic Prescriptions.
  • Prescriptions billed with a DAW 2 require documentation that the patient requested brand name. These notes should include the date of the request to meet certain PBM requirements.
  • Be sure to keep documentation when DAW 6 is required per the plan.
  • When billing DAW 8, keep proof that the generic, “unbranded biologic”, or interchangeable biosimilar was unavailable in the marketplace. This could be an invoice or a screen print of your wholesaler’s website. Additional guidance is in the January 2022 Newsline article, Be Proactive on DAW 8 Claims and Prevent Recoupments.

PAAS Tips:

  • Review the newly updated DAW Codes Explained tool found on the PAAS Member Portal
  • Regularly perform a self-audit of any DAW code other than zero to check for appropriate documentation as per the guidance in the May 2021 Newsline article, Self-Audit Series #4: DAW Codes
  • DAW codes 3, 4, 7, and 8 should be monitored specifically to watch for below cost reimbursement
  • Consider transitioning claims for multisource drug products from DAW 0 to DAW 9 when the plan prefers brand name

If you are billing the brand name or reference drug product when equivalent products are available in the marketplace, think about why you are doing so, utilize the correct DAW code, and ensure appropriate documentation exists to support the code utilized.

DMEPOS Mini-Series #6 – Therapeutic Shoes for Diabetes

According to the CDC, there are more than 130 million adults with diabetes or pre-diabetes in the United States. Every 17 seconds someone is diagnosed. Noridian, Jurisdiction D, has been conducting Targeted Probe and Educate reviews of HCPCS code A5500, which is for therapeutic shoes. The quarterly results based on dollars from April through June 2022 show an improper payment rate of 52%! Every other claim for therapeutic shoes is denied due to lack of medical necessity and/or technical reasons. CGS also shows a pre-pay review Quarterly Status report for the same date range with an error rate of 62%! Please review the guidance below for the required documentation to bill and dispense therapeutic shoes, and what the top denial reasons are for recoupment.

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Coverage Criteria (1 through 5) must be met, or claim will be denied.

  1. Diabetic Condition
  2. Qualifying Foot Conditions – see link to Documentation Checklist under PAAS Tips
  3. Statement of Certifying Physician
  4. Supplier Evaluation
  5. Supplier Assessment of Fit

Documentation needed upon an audit:

  • Standard Written Order (SWO) – See our April 2021 Newsline for details
  • Statement of Certifying Physician – Must be signed and dated by the MD or DO managing the beneficiary’s diabetes. (Exceptions to MD/DO as the certifying physician are listed in the Local Coverage Determination (LCD))
  • Medical Records
    • Patient must have an in-person visit within 6 months prior to delivery that documents the management of diabetes and at least one of the qualifying foot conditions
    • The certifying statement by itself does NOT meet this requirement for the documentation in the medical record
  • Supplier Evaluation
    • Examination of the beneficiary’s feet describing any abnormalities that need to be accommodated by the shoes/inserts
    • Measurements of the feet
    • Impressions, casts, or images of the feet for custom molded shoes and inserts
  • Supplier Assessment of Fit
    • Must occur at the time of in-person delivery
    • Supplier must conduct an objective assessment of the fit of the shoes and inserts while the beneficiary is wearing them and document the results
      • For Example: no slippage of heals when walking, ample toe room, feet are supported by heel counter, inserts make contact with patient’s feet and fit inside the shoe properly
    • A beneficiary’s subjective statement regarding the fit does not meet this criterion as they may have neuropathy which prevents them from feeling if there is any rubbing or pinching
  • Proof of Delivery – Must include the address of the pharmacy, detailed description of item, quantity delivered, signature of beneficiary or representative and delivery date – billed date and delivery date must be the same

PAAS Tips:

Bill It Right – Diazepam Gel

Diazepam rectal gel continues to confuse prescribers and pharmacies alike when it comes to how a prescription is written and then ultimately filled and billed. According to FDA labeling, this medication “is intended for the acute treatment of intermittent, stereotypic episodes of frequent seizure activity (i.e., seizure clusters, acute repetitive seizures) that are distinct from a patient’s usual seizure pattern in patients with epilepsy 2 years of age and older.”

Diazepam gel comes in three strengths: 2.5 mg, 10 mg (5-7.5-10 mg), and 20 mg (12.5-15-17.5-20 mg). Each box contains two doses and is billed as “1 each.” The standard dosing for diazepam gel is one dose for appropriate seizure activity and repeat 4 to 12 hours later if prescribed. The FDA recommends that diazepam rectal gel be used to treat no more than five episodes per month and no more than one episode every five days, therefore one package should be considered a 5-day supply at minimum.

PAAS Tips:

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  • If a quantity is unclear, verify it with the prescriber and make a clinical note
    • If a prescriber writes for a quantity of “2,” do they mean 2 doses (1 box) or 2 boxes (4 doses)?
    • Most PBM audit enforcement of this medication revolves around quantity errors
  • One box is 2 doses but billed as “1 each”
  • Suggested days’ supply for one box is 5 based on FDA dosing recommendations
  • Use caution and clinical common sense when filling refills
    • Do not place this medication, or any emergency/rescue medication, on auto-refill
    • Auditors track refill history which may open you up to audits if filling emergency/rescue medications at a higher rate than other pharmacies
  • See September 2020 Newsline article, Suggested Days’ Supply for Emergency Medications for other frequent audit targets

2022 DEA Pharmacist’s Manual Updates – What’s Changed?

With the DEA and wholesalers cracking down on the dispensing of controlled substances and dangerous drug cocktails (see our July 2020 Newsline article Beware: DEA and Wholesalers are Cracking Down on Controlled Substance Dispensing for additional details), pharmacies might consider revising their controlled substance handling policy. In addition to resources provided by your State Board of Pharmacy or state pharmacy association, another valuable reference is the DEA Pharmacist’s Manual which was recently updated in 2020, and revised in 2022.

For those who have read the 2020 manual and are wondering what has changed, here is a summary of several major updates:

  • Section III Registration Requirements – The DEA has updated several of their processes to be more electronic-based and less reliant on paper forms. DEA form 224 (registration of a new pharmacy) and renewal of a pharmacy license is now only available online. Renewal reminder notices will no longer be sent via US Mail, but pharmacies should receive electronic reminders 60, 45, 30, 15, and 5 days prior to expiration.
  • Section IV Ordering Controlled Substances – Language about utilizing the DEA 222 triplicate form has been removed since the triplicate form was phased out and completely replaced with the single sheet DEA 222 form effective October 15, 2021. The manual does specify that old triplicate DEA 222 forms must still be maintained (separate from other records) and kept available for inspection for a minimum of two years.
  • Section V Inventory Requirements – The 2022 manual added language regarding inventory (initial, biennial, etc.) record retention and spelled out the requirement more clearly that the registered location must maintain the complete and accurate accounting of the inventory in written, typewritten, or printed form for at least two years.
  • Section XIII Combat Methamphetamine Epidemic Act of 2005 – This section discusses the sale of ephedrine, pseudoephedrine, and phenylpropanolamine (also known as “scheduled listed chemical products” or SLCPs). Here you will find language regarding the restriction of selling no more than 3.6 gm of the chemical (base) per calendar day. This language had not changed, however, the following has been added, “regulated sellers, including pharmacies, may not exceed this quantity limit of SLCP base, even if state law mandates that a prescription be issued for the product”. This is pursuant to 21 CFR 1314.20(a). Also added, “regulated sellers, including pharmacies, must maintain a logbook for sales of SLCPs even if state law mandates that the product only be sold by prescription”.
  • Throughout the manual
    • The word “abuse” has been replaced with “misuse” and the phrase “drug abusers” has been replaced with “those individuals seeking to fill fraudulent prescriptions”. This change seems to better encompass those individuals who are inappropriately obtaining, utilizing, and/or distributing controlled substances and not just those who are personally misusing the medication.
    • DEA email addresses listed in the manual have been changed from an “@usdoj.gov” address to an “@dea.gov” address. If you are reaching out to the DEA, be sure to verify the email address you are utilizing is accurate.

Being familiar with the guidance provided in the current version of the DEA Pharmacist’s Manual is recommend for any pharmacy that dispenses controlled substances and the manual would be a great resource to utilize if you are revising or developing policies and procedures for the handling of controlled substances.