Pharmacy Audits 101 - ncpanet.org · • Fraud, Waste and Abuse Training Completed ... • DAW – 2 Patient DAW (Document Pt requests brand on HC) ... • Medco Allows for some plans:

NCPA Members Forum

Mark Jacobs, R.Ph.

Thursday, February 17, 2011

Pharmacy Audits 101For the Pharmacy Technician

PAAS National ®Mark Jacobs is the Director of the Pharmacy Audit Assistance Service (PAAS), and has worked with pharmacies in audits since 1999. He is a pharmacist with 22 years experience, and currently oversees the PAAS Team responsible for serving over 4500 member pharmacies in 50 states. To date experience includes over 18,000 audits with an estimated savings of over $74 million for member pharmacies.

Pharmacy Audits 101Audits are Serious BusinessAudits are Serious Business

• Audits are performed by a Third-Party Payor• Examples of TP Payors” Medco, Caremark, ESI,

Aetna, Medicaid, Medicare and others• Audits can also be performed by Contractors.

Examples are: ACS, National Audit, MIC’s, RAC’s, ZPIC’s, MAC’s and more

Mark Jacobs 888-870-7227Copyright © PAAS National® 2011

Pharmacy Audits 101Why do Audits Occur?

• Plan Sponsor Requirements• PBM Decision to audit based upon claims data• Compliance with Provider Manual• Member Benefit Limitation


Pharmacy Audits 101Why else do Audits Occur?

• Monitor for Overpayments• Check for Underpayments???• Investigate Fraud

Caution: Audits can result in a loss to the pharmacy of greater than $10,000!


Improper Payment”Definition

• “Improper Payment” – Any payment that should not have been made or that was made in an incorrect amount (including overpayments and underpayments) under statutory, contractual, administrative, or others legally applicable requirements.


Fraud Waste and Abuse (FWA)Why Fraud Control Programs?

• False Claims Act 1986• HIPAA 1996 Health Care Fraud and Abuse

Control Program (HCFAC)• Medicare Part D – FWA Sponsor Requirements• Deficit Reduction Act 2005 – FWA Compliance

Laws


Fraud HotbedsTurning up the HEAT!HEAT!

• A joint initiative between DOJ and OIG• Health Care Fraud Prevention and Enforcement

Action Team = HEAT

•• Hottest Areas Hottest Areas Include: South Florida, Los Angeles, Houston, Detroit, Brooklyn, NY, Baton Rouge, LA and Tampa, FL


Huge Return on InvestmentFinancial Results

$4.00 Returned for Every $1.00 Spent on AuditsFiscal Year 2009

• $1.63 Billion in federal judgments• $2.52 Billion for the Medicare Trust Fund• $441 Million in Federal Medicaid Money


What not to do!

CVS/Caremark: Pays $21.1 million to settle claims that from 2000-2006, the company illegally switched patients from the tablet version of the drug Ranitidine (generic Zantac) to a moreexpensive capsule version for the sole purpose of increasing Medicaid reimbursement.

Price = $79.80 for 60 Ranitidine capsules vs. $17.10 for tablets

Net increase = $62.70 on a single prescription.


Can you Identify Fraud?Pharmacy Issues – Which ones are fraud?

Prescriptions not cancelled within 14 days (10 days for some contracts) that are not picked up

Fake Prescriber ID’s – Dummy DEA#, Wrong NPI#

Incorrect Rx Origin Code

Bill Entire Claim – Only partial quantity provided


Fraud is in RedPharmacy Issues – Which ones are fraud?

Prescriptions that are not picked up and are never cancelled

Fake Prescriber ID’s – Dummy DEA#, Wrong NPI# May be considered Fraud if no legitimate prescriber exists

Incorrect Rx Origin Code – Clerical Error

Bill Entire Claim – Only partial quantity provided Fraud if patient doesn’t receive the balance


Most Audits are not Fraud…But auditors get paid for your mistakes• Clerical error• Missing Signature• Incorrect Date• No documentation• Improper Payments vs. Overpayments

Auditors will take the money!


Pharmacy Techs are Key for preventing audits/chargebacks

Technician Roles Ensure prescription claims are billed properly

Document what the help desk tells you to do

Enter correct Rx origin codes

Goal: Avoid Claim Reversals/Chargebacks


What are we going to learn?Pharmacy Audits 101

• Types of Audits• Audit Triggers• Common Audit Discrepancies • Tips for Documentation• Safe Filling and Billing Practices • Maintain Good Record Keeping Practices


Pharmacy Audits 101Types of Audits

• On-Site• Desk Audit (Fax or Mail-In)• Invoice• Central Review• Concurrent


Preparing for an auditThe Key – A Proactive Approach

• Today’s Prescription Claim is Next Year’s Audit!• Prevent Post-Audit Recoupments

- Frustrating- Time Consuming- Expensive“An ounce of prevention is worth a pound of cure.”


Preparing for an auditIf you receive an audit notice

• Don’t panic – Do prepare• Establish store protocol for audits• Be organized• Assist the Pharmacist as necessary• HIPAA – Auditor rights and responsibilities


On-Site AuditsBe prepared

• Schedule for a specific day and time• Extra staff on audit day can help ensure things

run smoothly – Don’t sacrifice patient care!• Someone should work with the auditor• Take good notes• Insist on a post-audit review


Desk AuditsSubmitting Documentation

• Step 1: Gather Documentation• Step 2: Make Copies (Keep original copy for

your records)• Step 3: Organize and Review• Step 4: Mail or Fax – But always Keep Proof of

Delivery


Invoice AuditsPBM wants to verify the pharmacy

purchased enough of the product they billed for.

Pharmacy Technician Roles:

• Keep invoices organized

• Pharmacy Pricing is often confidential

• Make sure you get invoices from all wholesalers


Other types of AuditsCentral Review – PBM determines they paid you

more than they should have (Often from 3-4 years ago!)

Concurrent Audit - PBM calls and asks you to verify information, reverse and re-submit a claim

Pharmacy Technician Role:

• First let the Pharmacist/Owner know

• Document the name of the help desk person you spoke with on the face of the Rx, your initials, date and time


Audit Triggers - StatisticalPBMs use electronic real time algorithms to

monitor Rx claim information• Generic Dispensing Rate

• Expensive Brand Name Drugs

• DAW Code

• Rx Origin Code

• Quantity vs. Day Supply


Audit Triggers - StatisticalAdditional claims monitoring:• U&C Prices

• Rx Reversal Rates

• Prescriber Profiling

• Controlled Substance Rxs

• Overrides

• Formulary Compliance

• Adding Refills


Audit Triggers – Non-statistical• Plan Sponsor Complaints

• Member Complaints• Fraud, Waste and Abuse Training Completed• Federal Exclusion List Screening of all

Employees Completed• PBM lost plan – Sour Grapes!


Common Audit Discrepancies• DAW-1 vs. DAW-2

• DID Invalid (Dummy DEA# or NPI#)• DID Incorrect (Wrong Prescriber Entered)• Override Code Improper Use/Not Documented• IDS – Incorrect Day Supply (EPL… Disp > Rx)• UUD – Directions not Mathematically Useful• Rx Origin Code Incorrect


Common Audit Discrepancies• Missing Prescriber Signature

• Date Filled Incorrect – Missing Date, Filled Before Written/Authorized

• RXC – Prescription Changed or Altered• UAR – Unauthorized Refill• CPD – Compound (Billed incorrectly or overbilled)• E-Rx – Invalid Electronic Prescription


DAW Codes• DAW – 0 Generic or Single Source Brand (Most Common) • DAW – 1 Physician DAW• DAW – 2 Patient DAW (Document Pt requests brand on HC)• DAW – 3 Pharmacist Selected Brand • DAW – 4 Generic not in stock in pharmacy• DAW – 5 Brand dispensed, Priced as Generic• DAW – 6 (Currently not in use)• DAW – 7 Brand mandated by Law• DAW – 8 Generic not available in Marketplace – Be Careful!• DAW – 9 Other, No meaningful application. Generic pricing

may be applied – You may be subject to recovery by some TP’s!


News Tip: Medco has recently assigned

DAW-9 for Brand Name Formulary

DID “Invalid”• Pharmacy used a Dummy NPI# or DEA# (Even

for Non-Controlled Substances)• Examples (XX1111119, AB5555555, AM1234563)


Make sure all required DIDs are correct

Bonus Tip: Humana, ACS and National Audit will not allow the Pharmacy fill sticker to supply the DEA# for CS Rxs

DID “Incorrect”• Pharmacy used a NPI# or DEA# belonging to

another practitioner

Examples:• Pharmacy transmits Rx from NP/PA under a Physician’s

ID#

• Two Names occur on the Signature Line

• Pharmacy reassigns a Rx with the previous prescriber’s Name and ID’s#

• Two Prescribers with similar names


Override Code• Improper Use of or Reason not Documented

Examples:• Pharmacy enters an override code to force a

prescription to be filled one day early

• Lack of proper documentation on the Prescription when using an override code


Override Codes• Medco Allows for some plans:02 – Maximum Daily Dosage03 – Vacation Supply04 – Lost or Spilled Medication05 – Therapy Change


Tip: Make sure override code is not set to “default”

Incorrect Day Supply• Pharmacy Transmits an Incorrect Day Supply

Pharmacy Transmits 30DS#2 is a 33DS


RxName: Homer Simpson

Albuterol Inhaler#2

Sig: 2 puffs q 4-6 prn

Refills: 6Doctor : S. Williams

Dispensed Greater than Rx• Pharmacy Dispenses More than Authorized

Pharmacy Transmits #90 as a 90DSPlan allows 90DS, but Prescriber did not authorize


RxName: Marge Simpson

Tekturna ™#30

Sig: 1 p.o. q Day

Refills: prnDoctor : J. Andrews

Exceeds Plan Limits• Pharmacy Dispenses More than Allowed by Plan

Pharmacy Transmits #3 vials as 30DS3 vials = 43DS


RxName: Bart Simpson

Humulin N ®

#3 vialsSig: Inject 70 units S.Q. Daily

Refills: prnDoctor : J. Andrews

Use As Directed• Use as Directed is no longer allowed

Sig is not mathematically useful1 vial = ??DSMark Jacobs 888-870-7227

Copyright © PAAS National® 2011

RxName: Maggie Simpson

Humulin N ®

#1 vialsSig: Ut. Dict.

(per SS)Refills: prnDoctor : J. Andrews

Rx Origin Code IncorrectRx Origin Codes – NCPDP Field 419-DJ

1 – Written

2 – Telephone

3 – Electronic

4 – Facsimile

What about Transferred Prescriptions?


Tip: Make sure Rx Origin Code is not set to “default”

Missing Prescriber SignatureAll Prescription Orders require a valid Prescriber

Signature• LTC Rx Orders – Check for date written also• Fax-Back Requests – Nurse cannot sign the order• Faxed Prescriptions – Cannot be “electronically

signed” in some states


Tip: Make sure the Pharmacy fill sticker does not cover the signature

Date Filled is IncorrectExamples:• Missing Date • Filled Before Written• Filled Before Authorized


Tip: Telephone orders should also record time of call, name of caller and RPh

Initials

RXC – Prescription Changed or Altered

An Auditor may consider a Rx changed or altered that…

• Has a number written over• Contains a Scrivener’s Error – A Writing Error • Contains changes that are not documented and

initialed with the date and time of call


Tip: Changes require that you contact the prescriber and are

typically best handled as a new order

Unauthorized Refill

Auditor’s will cite you for:• Adding additional refills to the same Rx Number• Changing the original number of refills

authorized

• Refilling a Prescription more times than the number ordered.


Tip: Beware of the “OK x 5” Authorization…

Is it 1 + 4 additional refills or 1 + 5?

Compound Error

Compounds are high risk for audit. Be sure to:• Set the Compound Flag

• Bill for the highest price NDC# or most active ingredient as required.

• Submit the total quantity dispensed

• Submit your Ingredient Cost and U&C Price


Warning: Prime Therapeutics determines the highest cost ingredient the opposite from other PBMs

E-Rx: Electronic PrescriptionCMS encourages electronic prescribing, however it is

not a cure all for hand written prescriptions.**Be sure you print & file your E-Rxs

Auditors seem to be looking for four common items:

1. Date 2. Time

3. SPI# (Sometimes labeled “Doc ID”)

4. Unique Sender ID# (Sometimes labeled “Unique message ID or “erx trace”)


Warning: Often, the issue with this info not printing is with the software vendor, not the prescriber’s office. The information is said to be “embedded” in the data transmission.

Prescription Blanks with Rules Not Valid for Controlled Substances No more than one prescription per Rx Blank Quantity Range Check Boxes DAW Implications: For example a specific line

required for the prescriber’s signature


Warning: Prime Therapeutics disallows dual signature lines!

Core Concepts of Prescriptions• Patient First and Last Name, Rx Date, RPh Initials

(telephone)• Drug name, strength, metric quantity• mathematically useful directions• Refill Information• Prescriber and their correct ID (NPI# and DEA#)• Rx Origin Code• Ancillary: DAW Code, Override Code, Clinical Notes on

Hard Copy Rx• Printed E-Rxs filed chronologically (preferably)


Safe Filling and Billing Practices• Fill and Bill Rxs as Written with the

Correct Days Supply• Enter the Correct Information• Make sure Hard Copy Rxs are Complete• Follow Plan Limitations• Bill for the NDC# used to fill the Rx


Maintain Good Record Keeping Practices

• Make Sure Records are Filed Correctly• Make Sure all Prescription Records are

present before filing away – Initial Folder• Reverse and Return Rxs Not Picked Up• Make Sure Patient Receives entire Rx• Maintain Organized Sig Logs


Pharmacy Audits 101

THANK YOU!

I will be happy to take questions.


Documents

Pharmacy Audits 101 - ncpanet.org · • Fraud, Waste and Abuse Training Completed ... • DAW – 2 Patient DAW (Document Pt requests brand on HC) ... • Medco Allows for some plans: