Self-Audit Series #8: Compound Prescriptions

1. Prescription
   1. Must have a valid prescription order that meets all state and federal requirementsMedication that is commercially available is generally prohibited from being compounded by the pharmacy. Be sure you have good documentation if there’s a clinical reason the patient cannot use a commercial product. Shortages can be verified on the FDA website: Drug ShortagesPrescription must clearly indicate each ingredient along with the final concentration prescriber is intending. Avoid using abbreviations or common nicknames (e.g., Magic Mouthwash)
   1. Pre-printed prescription forms are prohibited by many PBMs and should be avoided

• Compound Worksheet/Log
  • At a minimum your worksheet/log should include:
    • Link to Rx number it was prepared for
    • Formula name, strength and dosage form
    • Date prepared and total quantity made
    • Beyond Use Date (BUD)
    • Each ingredient name, NDC, quantity, lot and expiration date
  • May also consider including:
    • Each ingredient cost (AWP or U&C)
    • Employee name that prepared and approved the compound
    • Documentation for quality control procedures
    • Certificate of Analysis for bulk powders
    • Specific instructions for the compound process

• Billing for Compounds
  • NDCs billed on the claim must match the NDCs used to prepare the compoundAll ingredients must be included on the claim
    • Do not bypass plan rejects by omitting non-covered ingredientUtilize Submission Clarification Code 08 (Process Compound for Approved Ingredients) when appropriateDo not reduce quantity to bypass any plan rejects due to cost or prior authorization requirementsConfirm pharmacy software is billing accurate quantities for “QS”(quantity sufficient), if needed
    Compounds should only be billed and compounded using USP-NF (United States Pharmacopeia-National Formulary) pharmaceutical grade ingredientsRefer to each PBM Provider Manual for correct Level of Effort (LOE) billing codes
  • Bill an accurate days’ supply based off instructions for use

PAAS Tips:

• See August 2024 Newsline, Do The Math and Avoid the Recoupment
• See July 2024 Newsline, Self-Audit Series #5: Topical Prescriptions
• Utilize the PAAS National^® Rx Days’ Supply Calculator App for assistance with topical days’ supply calculations