10/18/19

Long Term Care Pharmacy Audit

Prevention and Fraud, Waste, and
Abuse Compliance in 2019
Trenton Thiede PharmD, MBA
Chief Operating Officer, PAAS National®

1
 10/18/19

Disclosure

Trenton Thiede is an employee of PAAS National®, a pharmacy audit assistance

and FWA/HIPAA regulatory compliance company. The conflict of interest was
resolved by peer review of the content.

Pharmacist and Pharmacy Technician Learning

Objectives

At the conclusion of this program, you will be able to:

• Discuss consequences of non-compliance with regulations using case examples
• Identify and describe the 7 required elements of an FWA compliance program
• Explain how the CMS’ final rule change for Contract Year 2019 affects
pharmacies
• Discuss unique challenges with LTC pharmacy audits

2
 10/18/19

THIS SESSION WILL BE UTILIZING AUDIENCE

POLLING SOFTWARE
Please go to MEET.PS/LTCAUDIT to answer poll questions

Fraud, Waste, and Abuse Compliance (FWAC)

Laws & Rules
• Federal False Claims Act (FCA)
• 31 U.S.C. § 3729-3733
• Enacted post-Civil War
• Heavily amended in 1986
• Amended multiple times
• Criminal felony to submit a false claim for payment from Federal funds
• Medicare, Medicaid, TRICARE, Federal Employee Program (FEP), grants, etc.
• Includes making or using a false statement
• Civil Money Penalties (CMPs)
• Up to treble (triple) damages plus $11,000 fine per claim filed
• Qui Tam provisions
• Incentives of up to 30% of settlement or judgment may be awarded to whistleblowers
• Protections in place to protect whistleblowers from retaliation of any kind

3
 10/18/19

Whistleblower Cases

• Walgreens’ settlements (1/2019)

• $209.2 Million for refusing to break insulin boxes, forcing pharmacies to override the days’
supply (and then put patients on auto-refill program)
• $60 Million for falsely elevating U&C through Prescription Savings Club
• Cases arose from whistleblowers under the FCA that were former employees
• Could get up to 30% of the $269.2 Million in recovery

• Pharmerica (5/2015)
• Settled alleged violations of Controlled Substance Act $8 Million
• Consequently, treble damages for violations of FCA $23.5 Million
• Whistleblower received $4.3 Million

FWAC Laws & Rules

• Federal Anti-Kickback Statute (AKS)

• 42 U.S.C. § 1320
• Effective 1972
• Prohibits providing or receiving a “kickback” for referral of any product or service paid by
Medicare or Medicaid
• Any remuneration
• Safe Harbors (formerly proposed removal of rebates involving prescription pharmaceuticals and
creation of new point-of-sale reductions in price)
• 5 years in prison
• Fines up to $25,000
• CMPs up to $50,000/kickback, plus three times the remuneration
• Can lead to exclusion from participation

4
 10/18/19

FWAC Laws & Rules

• Anti-Kickback Statute (continued)

• OIG maintains list of Safe Harbor regulations
• Published 42 CFR §1001.952
• Must follow regulations exactly to be “safe”
• OIG will provide advisory opinions in situations that do not meet regulations
• Based on facts provided
• Only opinion
• Doesn’t mean practice is legal
• OIG likely not to prosecute

Violation of Anti-Kickback

• Johnson & Johnson paid $2.2 Billion to resolve criminal and civil liability (11/2013)
• Promoted off-label use of Risperdal®, Invega®, and Natrecor®
• Paid kickbacks to physicians (guise of speaker fees)
• Paid kickbacks to Omnicare (market share rebates, data purchase agreements, grants, and
educational funding)
• Engage Consultants in “active intervention programs”
• J&J viewed consultants as extension of its sales force
• CMP resulted in $1.72 Billion
• False claims resulted in additional payment of $149 Million
• Omnicare paid $98 Million
• Abbott Labs paid $1.5 Billion for similar conduct with Depakote®(5/2012)
• Omnicare paid $28.125 Million

10

5
 10/18/19

Violation of Anti-Kickback

11

Violation of Anti-Kickback

• Omnicare paid $124 Million to settle alleged anti-kickback statue (6/2014)

• Offered improper financial incentives to SNFs in return for continued business
• Entered into below cost contracts to supply prescription medications
• AKS – prohibit offering, paying, soliciting, or receiving remuneration to induce
referrals of items or services
• Whistleblower received $17.24 Million

12

6
 10/18/19

Violation of Anti-Kickback

• Atlanta Nursing Home Chain solicited kickback payments from Omnicare

in exchange for 15-year contract (2/2010)
• Requested $50 Million as a payment
• Omnicare agreed to acquire small business unit with two employees for $50
Million
• Nursing Home paid $14 Million in settlement
• Omnicare paid $98 Million in settlement

13

FWAC Laws & Rules

• Stark Statute
• 42 U.S.C § 1395nn
• “Stark I” – OBRA 1989
• “Stark II” – OBRA 1993
• AKA Physician Self-Referral Law
• Prevent financial incentives for unnecessary medical services
• Prohibits ordering or referring medical services with a financial incentive (ownership)
• Provides for CMP and treble damages

14

7
 10/18/19

FWAC Laws & Rules

• Public Law 104-191, Health Insurance Portability and Accountability Act

(HIPAA) of 1996
• Established the Health Care Fraud and Abuse Control (HCFAC) Program
• Public and private health care
• Under joint direction of the Department of Health and Human Services (HHS), Office of the
Inspector General (OIG) and the Attorney General
• Coordinates Federal, State and local law enforcement

15

FWAC Laws & Rules

• Medicare Modernization Act (MMA) of 2003

• Created Medicare prescription drug program (Part D)
• Requires plan sponsors to have a compliance program
• Covers general compliance and FWAC
• Plan sponsors must assure that their employees, contractors
and first-tier, downstream and related entities (FDRs) meet
requirements
• Pharmacies are FDRs

16

8
 10/18/19

FWAC Laws & Rules

• Deficit Reduction Act (DRA) of 2005

• Enhanced the Federal False Claims Act
(FCA)
• Provides financial incentives to States to
pass their own FCA
• Required FWAC requirements for any
entity with $5 million or more in
revenue per year from Medicaid

Source: https://www.falseclaimsact.com/states-municipalities-fcas

17

FWAC Laws & Rules

• Health Care Fraud Enforcement and Action Teams (HEAT)
• Began May 9, 2009
• CMS, FBI, DEA, OIG, State and local law enforcement working in conjunction
• Medicare Fraud Strike Force, multiple cities
• Baton Rouge and New Orleans, LA; Brooklyn, NY; Chicago, IL; Dallas, TX; Detroit, MI; Houston,
TX; Los Angeles, CA; Miami-Dade, FL; Tampa Bay and Orlando, FL; Washington, DC; Newark, NJ
and Philadelphia, PA (8/2018); Appalachian Region (10/2018); Rio Grande Valley and San
Antonio (8/2019)
• June 2018: National Health Care Fraud Takedown
• 600+ defendants in 58 federal districts charged with fraud (65% increase from 2017)
• $2 billion in false claims
• Exclusion of 2,700 individuals since July 2017
• In FY 2017, government teams recovered $2.6 billion from health care related fraud
• In FY 2018 ‘Impact on Investment’ calculated at $100 to $1

18

9
 10/18/19

FWAC Laws & Rules

• Patient Protection and Affordable Care Act (ACA) of 2010 (Obamacare)

• Expanded the Recovery Audit Contractor (RAC) program to include Medicaid and
Medicare Part C and D
• Additional $350 million to fight FWA
• Expected to be budget neutral
• FWA Recovery ≥ Enforcement Cost
• FY 2015-2017, recovered $4.20 for every $1 spent on investigation

19

FWAC Laws & Rules

• Affordable Care Act (continued)

• Increased provider/supplier review
• Site visits, background checks, licensure checks, fingerprinting
• False applications may lead to exclusion from all Federal programs
• Medicaid termination for unpaid overpayments
• Suspension of payments if fraud is suspected!

20

10
 10/18/19

Please go to MEET.PS/LTCAUDIT to answer poll questions!

21

22

11
 10/18/19

24

What is Fraud?

• Knowingly and willfully executing, or attempting to execute,

a scheme or artifice to defraud any health care benefit
program or to obtain (by means of false or fraudulent
pretenses, representations, or promises) any of the money
or property owned by, or under the custody or control of, a
health care benefit program.
• 18 U.S.C. Section 1347

26

12
 10/18/19

Examples of Possible Fraud

• Intentionally submitting false information in order to get money or a

benefit
• Billing for items that were not purchased or delivered
• Prescription forging, altering or shorting
• Switching to a more expensive dosage form to increase the amount of
reimbursement
• Submitting claims for entire amount on partial fills were the balance is
not picked up
• Reusing medications that were already paid for by Medicare

27

Prison & Fines for Fake Claims

• Pharmacist at A to Z Pharmacy, FL
• Sentenced to 10 years in prison
• $3.2 million in restitution
• $1.4 million in forfeiture
• Paid kickbacks to Medicare, TRICARE, & Medicaid patients
• Compounded pain and scar creams
• Not medically necessary
• Never provided
• Or both

28

13
 10/18/19

What is Waste?

• Waste is the overutilization of services, or other practices that, directly or

indirectly, result in unnecessary costs to the Medicare program. Waste is
generally not considered to be caused by criminally negligent actions but
rather the misuse of resources. (CMS, Prescription Drug Benefit Manual
Chapter 9 – Compliance Program Guidelines, Section 20)

• Waste is a misuse of resources or to spend carelessly

29

Examples of Possible Waste

• Overbilled quantities – submitting for a quantity larger than what is

allowed by the plan or ordered by the prescriber
• Dispensing a 90-day supply that is discontinued after 30 days
• Billing an incorrect day supply resulting in the patient receiving a larger
quantity than allowed
• Dispensing a 60-gram tube of ointment when a 15-gram tube would be
sufficient
• Auto-refills when the previous supplies not exhausted

30

14
 10/18/19

What is Abuse?

• Abuse includes actions that may, directly or indirectly result in:

unnecessary costs to the Medicare program, improper payment,
payment for services that fail to meet professionally recognized
standards of care, or services that are medically unnecessary. Abuse
involves payment for items or services when there is no legal entitlement
to that payment for the provider.
• Abuse may involve obtaining an improper payment, but does not require
the same intent and knowledge as fraud.

31

Examples of Possible Abuse

• Using an override code to force a claim to go through early

• Filling a prescription after expiration

• Splitting prescriptions to obtain additional dispensing fees or to avoid prior

authorization requirements

• Changing to an incorrect diagnosis code in order to receive payment

32

15
 10/18/19

Fraud vs. Abuse

• Did you do it intentionally?

• Can you prove that you didn’t?

• Repeated abuses are often considered to be intentional

frauds in the eyes of the auditors
• Once or twice = oops
• More = Fraud

33

Basics of FWAC

• Prevent! Detect! Correct!

• Required to adopt and implement an effective compliance

program

• CMS requires 7 core elements

• 33 sub-elements

• Much more than just training!

34

16
 10/18/19

The 7 Core Elements are:

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 Risks; and
7. Procedures and System for Prompt Response to Compliance
Issues

35

Policies & Procedures

• Detailed and Specific

• Describe operations of Compliance Program
• Reporting structure
• Training requirements
• Investigation and remediation

36

17
 10/18/19

Standards of Conduct

• AKA “Code of Conduct” (CoC)

• State the principles and values by which you operate
• Expectation that ALL employees will act in an ethical manner
• Noncompliance and potential FWA is reported
• Reported issues are addressed and corrected
• Compliance is everyone’s responsibility!

37

Distribution of P&P and Code of Conduct

• Compliance program not effective unless distributed to employees

• Within 90 days of hire
• Updates
• Annually
• Can distribute manually or electronic
• Need proof of distribution
• Signed acknowledgement

38

18
 10/18/19

Please go to MEET.PS/LTCAUDIT to answer poll questions!

39

40

19
 10/18/19

Compliance Officer

• Should be full-time employee

• Experience with compliance
• Recommend manager or direct report
• Duties:
• Aware of daily activities
• Develop and Implement compliance program
• Coordinate internal reviews and investigations
• Maintain reporting mechanisms
• Exclusion list checking

42

Effective Training and Education

• General Compliance Training

• ALL Employees (includes temps and volunteers)
• Within 90 days of hire and annually
• Classroom, online or attestation that have read and received CoC
and P&P
• Must have proof of training (sign-in, attestation or certificates)

43

20
 10/18/19

Effective Training and Education

• Fraud, Waste and Abuse Training

• Only requirement deemed to have been met thru Part B accreditation
• Only employees that are involved in the administration or delivery of Medicare
benefits
• Within 90 days of hire and annually
• May be required as corrective action for noncompliant employees
• Sponsors required to provide training to FDRs
• Have more latitude on how they meet and oversee FWA training. May require additional
training.

44

Effective Lines of Communication

• Ways to communicate information from the Compliance Officer to others

• Officer’s name, location, and contact information
• Changes to P&P, CoC, laws and regulations
• Methods of communication
• Written, email, website, or meetings
• Communication and Reporting Mechanisms
• Must have P&P and CoC that requires reporting of suspected or detected noncompliance
or FWA
• Must maintain confidentiality
• Allow anonymous reporting
• Prohibit retaliation or retribution (no-tolerance policy)
• User friendly, easy to access

45

21
 10/18/19

Disciplinary Standards

• Clear and specific disciplinary standards

• Contents:
• Expectation to report noncompliant, unethical or illegal behavior
• Participate in required training
• Timely, consistent and effective enforcement
• Disciplinary action must be appropriate to seriousness of the
violation
• Retraining, suspension, termination

46

Enforcing Disciplinary Standards

• Maintain records for 10 years

• Date reported
• Description of violation
• Date of investigation
• Summary of findings
• Disciplinary action taken and date
• CMS encourages that de-identified disciplinary actions be reported to
employees
• Demonstrate importance of Disciplinary Standards

47

22
 10/18/19

Whistleblower Protections

• P&P must include protection from intimidation or retaliation

• Encourage reporting without fear of repercussions
• Required by False Claims Act
• Disciplinary Standards should be enforced against anyone
that violates whistleblower protections
• Can involve law enforcement if necessary

48

Routine Monitoring & Auditing

• Compliance Officer must conduct

• Monitoring = regular review of operations to ensure compliance
• Auditing = formal review based on a set of standards (P&P, laws
and regulations)
• Address areas at risk
• What audits will be performed?
• When will audits be conducted?
• Who will conduct audits?
• How will audits be conducted?

49

23
 10/18/19

Procedures for Prompt Response to

Compliance Issues
• Need to investigate suspected or detected FWA
• Policy should cover process (who, how, etc)
• What happens if there’s an external investigation
• Employee cooperation considerations
• Remediation needs to be taken as soon as possible
• Consider procedural changes for prevention
• Discipline standards for bad actors
• Disciplinary standards need to be well publicized and consistently
enforced

50

Exclusions

• OIG/GSA Exclusion
• OIG LEIE: Office of the Inspector General List of
Excluded Individuals and Entities
• http://exclusions.oig.hhs.gov

• GSA EPLS: General Services Administration Excluded

Parties Lists System
• Moved to SAM (System for Award Management) website
• http://www.sam.gov

• Be mindful if your state has an exclusion list

Source: https://www.exclusionscreening.com/oig-exclusion-list-2/

51

24
 10/18/19

OIG Exclusion

• Search up to 5
individuals at a time
• Allows SSN/EIN
verification
• Provider records
also contain
NPI/UPIN if
available

52

GSA Exclusion

• Search only 1
individual at a time
• Need to contact the
excluding agency to
confirm
• Exclusions often not
related to health
care

53

25
 10/18/19

Exclusions

• OIG/GSA Exclusion (continued)

• “Federal funds may not be used to pay for services, equipment or drugs
prescribed or provided by a provider, supplier, employee or FDR excluded by
OIG or GSA.”

• Must screen PRIOR to hire and at least Monthly

• Any employee, temporary employee, volunteer, consultant, governing body member or
FDR
• Ensure that not excluded or become excluded

54

Exclusions

• OIG/GSA Exclusion (continued)

• Mandatory Exclusions: Previous fraud, patient neglect or abuse, felony
convictions relating to unlawful manufacture, distribution, prescribing or
dispensing of controlled substances

• Permissive Exclusions: Misdemeanor convictions for above, Pharmacy

License suspension for reasons bearing on professional competence,
financial integrity – providing unnecessary or substandard services,
engaging in unlawful kickback arrangements, defaulting on a health
education loan or scholarship obligations

55

26
 10/18/19

Exclusions

• OIG/GSA Exclusion (continued)

• Costs of Employing Excluded Individual
• CMPs of up to $10,000 for each item or service
• Recovery up to three times the amount claimed
• Exclusion
• Self-Disclosure Protocol
• Reduce recovery to 1.5 times amount paid
• Can prevent exclusion
• Limited to $10,000 minimum

56

Examples of Exclusion

• 2012: Hy-Vee Pharmacies, Iowa

• Agreed to pay $831,871.61 for allegedly violating CMP Law
• Employed an individual that they knew or should have known was
excluded
• 2018: Healthways Pharmacy and Surgical, New York
• Employing an excluded individual
• Agreed to pay $204,426.64

57

27
 10/18/19

Please go to MEET.PS/LTCAUDIT to answer poll questions!

58

59

28
 10/18/19

61

FWAC Attestations
• Initially focused on:
• Training
• 2011 Office of Inspector General (OIG) Report
• 87% of pharmacies completed training
• 30% of plan sponsors did not require documentation
• 41% of plan sponsors did not measure effectiveness
• CMS guidance has changed over time
• 2006 – pharmacies can develop own training
• 2008 – sponsors must provide training
• 2009 – sponsor provided or equivalent training
• Avoid duplicate trainings
• 2012 – optional CMS developed training
• 2016 – CMS developed training mandatory
• 2019 – CMS discontinued support of training

63

29
 10/18/19

Training Changes

• April 2018 CMS final rule

• What changed:
• The rule change gives Plan Sponsors (e.g. Humana) more latitude on how they meet and
oversee FWA training and compliance for their contracted pharmacies
• What didn’t change:
• Pharmacies (FDRs) still must have a compliance program that meets all 7 elements required
by CMS.
• Pharmacies are expected to retain records to support FWA training and compliance for at
least 10 years.

64

FWAC Attestations

• Increased focus on other FWA compliance requirements

• Code of Conduct
• Conflict of Interest Statement
• OIG/GSA Exclusion Lists
• Originally - Upon hire and annually
• Current - Prior to hire and at least monthly
• Contractor compliance (downstream entities)

65

30
 10/18/19

Penalties for being noncompliant

• Network TERMINATION!
• Exclusion from Federal health programs.
• CMPs, fines and jail time.

66

Being Compliant

• FWA Training alone is not a compliance strategy

• Appoint experienced, trusted employees to be your
Compliance Officer
• Can be the owner, Pharmacist in Charge (PIC), technician
• Evaluate and revise your policies and procedures regularly
• Know your State and Local laws
• Seek professional and peer advice/assistance
• Compliance is everyone’s responsibility, not just the
Compliance Officer

67

31
 10/18/19

Summary

• Consequences of Non-Compliance with FWA regulations

• False Claims Act
• Pharmerica billing C-IIs without valid orders
• Anti-kickback Statutes
• Drug Manufacturers rebating based on performance
• Omnicare pricing Med A drugs below cost
• CMS final rule for Contract Year 2019
• Plan Sponsors have more latitude about how they meet and
oversee FWA compliance

68

Summary

• Elements of a Compliance Program

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 Risks;
and
7. Procedures and System for Prompt Response to Compliance Issues

69

32
 10/18/19

LTC Pharmacy Audits

70

Why so many audits?

Escalating Healthcare costs

Opioid Epidemic

Contractual Requirement

Fraud, Waste & Abuse

Common Billing Errors

Data Analytics/Outliers

PBM Revenue Source = $$$

71

33
 10/18/19

Audit Penalties

Financial Recovery
Network Termination
Reputation
License
OIG Exclusion
Fines
Prison

72

Audit Trends from 2014 - 2018

Desk % Onsite % Invoice* %

2014 72 27 1
2015 73 26 1
2016 78 20 2
2017 82 16 2
2018 86 12 1
• *Many invoice audits are in addition to desk/onsite audit
• 5-year trend is a 60.3% increase in audits overall
• 2018 started tracking ‘72-hour prescription validation’
requests
• Extrapolated to 10.7% of annual total

73

34
 10/18/19

Big Picture

Do you have a prescription?

Prescription
Is prescription legal/valid per state and federal laws?
Data Entry & Did you fill and bill accurately (including calculable
Filling directions?
Do you have proof of dispensing?
Dispensing
Do you have proof of copay collection?
Did you purchase enough inventory from an appropriate
Other
source?

74

Common Audit Discrepancies

Prescription
• Missing/Invalid Rx
• Altered Rx
Data Entry
• Overbilled Quantity
• Refill Too Soon
• Incorrect DAW Code
Dispensing
• Missing/Invalid Signature Log
• Dispensed > 14 Days
• Copay Collection

75

35
 10/18/19

Please go to MEET.PS/LTCAUDIT to answer poll questions!

76

77

36
 10/18/19

Audit Algorithms ≠ Random

Historical 1. Days’ Supply

Billing/Documentation Errors 2. DAW

1. Controlled Substances – “Pill Mills”

Historical Fraud Targets 2. Compounds

1. Patient
Telemedicine & Delivery –
2. Prescriber
Zip code analysis 3. Pharmacy

79

Workflow Prevention Strategies

Data Entry Filling Verification Delivery Billing

80

37
 10/18/19

Filling

• Match NDC on stock bottle against billing label (including

package size) using barcode technology if possible

• Be careful not to short cycle or break open “Dispense in

Original Container” medications
• e.g. Linzess, many HIV/Oncology medications, etc…

81

Delivery

• Produce delivery Manifests with sufficient detail

• Obtain signature from agent of the Nursing Home, with hand-written
date
• If mailing, you must establish a clear link between the tracking number
and the prescription
• Ensure timely reversal of prescriptions that are refused/returned

82

38
 10/18/19

Billing

• When changing pay types, verify days’ supply on Refill On Demand

prescriptions
• Charge accounts must have good accounting practices with Policies and
Procedures
• When are statements produced
• Describes follow-up on deficient accounts
• When are patients cut-off from services
• Cash application process

83

“Top Eleven” Audit Discrepancies

1. Day Supply – Insulin

2. Day Supply – Topicals
3. Day Supply – Inhalers
4. Day Supply – Eye drops
5. DAW
6. Controlled Substance Prescriptions
7. E-Prescriptions
8. Transfer Prescriptions
9. Compound Prescriptions
10. Proof of Dispensing/Copay Collection
11. Non-FDA approved products or FDA approved devices

84

39
 10/18/19

1. Day Supply – Insulin

• 1 box of pens (15 mL)

• Obtain Max Daily Dose and add a Rx #1
Clinical Note Insulin Lispro U-100
Pen
• Submit accurate DS 15 mL
•Must break boxes if UAD per sliding scale

plan limits 7/29/18 per Kate, RN max daily dose =

30 units EEH

exceeded!!

85

1. Days Supply - Insulin

DOJ Settlement with WAGs
• January 22, 2019 - $209.2 million settlement
• Regarding billing and dispensing of insulin pens (WAGs had Rx system set up to prevent breaking
boxes)
• Forced pharmacies to alter Days’ Supply to plan limits
• Then put patients on auto-refill program leading to early refills
• DOJ cited examples of patients selling insulin on Craigslist
• For Single Patient Use Only
• FDA safety announcement from 2015: guidance regarding HCP utilizing the same pen on multiple
patients and just swapping the pen needles
• Remember to provide Patient Information Handouts
• Seeing PBMs enforce (Humana, EnvisionRx, ESI, OptumRx, and Prime)!

Sources: DOJ https://www.justice.gov/usao-sdny/pr/m anhattan-us-attorney-announces-2692-m illion-recovery-walgreens-two-civil-healthcare

FDA https://www.fda.gov/Drugs/DrugSafety/ucm 435271.htm

86

40
 10/18/19

2. Day Supply – Topicals

• Submit accurate DS if possible Rx #2

• Mathematical instructions for use Calcipotriene
0.005% cream
• Grams per application (if one area
360 GM
only) AAA BID
• Max Daily Dose per MD or expected
7/29/18 per Josie, RN affected area =
day supply both hands and feet EEH
• List of affected areas + Finger Tip Unit
(FTU) Method

87

Finger Tip Unit (FTU) Method

Body Surface # of FTUs

• 1 FTU » 0.5 gram (adult)
Hand 1
• 1 FTU covers one hand (front/back)
Foot 1

Arm + Hand 4 (3+1)

Leg + Foot 8 (7+1)

Buttocks 4

Trunk (front or back) 8 each

Face & Neck 2.5

88

41
 10/18/19

6. Controlled Substances
Federal Law
3 elements as per 21 CFR 1306.05(a) Rx #5
• Patient Address 7/11/2018
• MD Address Homer Simpson
• DEA number 742 Evergreen Terrace, Springfield

Buprenorphine/naloxone 8/2 mg
State Law(s)
film
• Where applicable #60
• Part D Opioid Restrictions 1 film SL BID + 0 refills

Dr. Nick
Buprenorphine/naloxone – DATA 2000 Waiver 123 Main St, Springfield
ID aka “X DEA number” in addition, not in place AB1234567 XB1234567
of

89

9. Compounds

• Rx must match compound log AND Claim

• NDCs
• Quantities
• Ingredient strengths assumed to be “final” unless specified
• E.g. in lidocaine 5% ointment
• Base QS amount – make sure software does not overbill
• LOE codes 11-15
• Be careful with defaults

90

42
 10/18/19

10. Proof of Dispensing & Copay Collection

Proof of Dispensing - Signature Logs

Elements
1. Patient Name
2. Date of Service
3. Rx Number
4. Facility Name
5. Date of Delivery
6. Signature of person accepting delivery, with hand-written date
• “Mail” or “Delivery” will NOT be sufficient
• Do not deliver before billing

91

10. Proof of Dispensing &Copay Collection

Copay Collection
• Contracts require collection WITH PROOF (limited exceptions)
• Documented proof of collection
• Front/Back copies of canceled checks, bank deposits, and even Credit Card Merchant Account
Reporting, including evidence of settlement and payment through bank records
• How could you prove copay collection on a transaction from last year on a specific prescription?
• House Charge Accounts
• Documented Policy and Procedures
• Timely invoice and documented attempts at collection
• How are payments applied
• Bad Debt/Hardships
• Documented Policy and Procedures
• Tax return documentation, etc

92

92

43
 10/18/19

Long Term Care Challenges

Humana offers the most specific guidance on LTC documentation:

• Prescription hard-copy requirements
• Signature Log Requirements
• Cycle Fill

93

Long Term Care Challenges

Humana Prescription hard-copy requirements:
1. Patient Name
2. Date of Issuance
3. Name of Drug
4. Strength of Drug
5. Dosage Form of Drug
6. Directions for use
7. Duration of Therapy (e.g. number of refills, clear start/stop dates or duration written
by prescriber)
8. DEA # (for controls)
9. Prescriber’s signature on the original PO/hard copy

94

44
 10/18/19

Long Term Care Challenges

Humana acceptable prescription hard-copy documentation:

• Original signed PO/Hard copy and refill sticker for the Date of
Service
• Original signed PO/Hard copy and signed PO for month requested
• A prescription drug order, a chart order, progress notes, or a MAR
that clearly contains all 9 elements outline
• Specific prescription discharge orders with a clear duration of
therapy

95

Long Term Care Challenges

Humana Signature Log Requirements
1. Patient name
2. Date of service
3. Rx number
4. Facility name
5. Date of delivery (hand-written by person signing)
6. Signature of person who accepted

• Do not utilize a summary/generic signature page for proof of delivery

• Billing date must be before, or concurrent with, delivery date
• Suggest never providing fill dates or start dates to avoid confusion

96

45
 10/18/19

Long Term Care Challenges

• Humana Cycle Fill Requirements

• May be done at the beginning or end of the month, must be
consistent
• Cannot interfere with normal days’ supply and quantity-limit edits
• If submitting SCC for short-cycle dispensing, must be able to
produce appropriate delivery documents for each dispensing
• 2/2/3 cycle – 12 delivery documents in 28 days

97

Long Term Care Challenges

• Problems with Physician Orders

• Ideal to have refills or valid time frame on form (e.g. All non-
controlled prescriptions are good for 31 days’ supply with 11
refills from written date)
• Controlled substances (DEA requirements)
• Quantity, Pt Address, Prescriber Address, Signature, and DEA
• Prescriber signature on page 4 of PO, prescription on page 2 –
only provide page 2 to auditor
• Happens with delivery logs as well

98

46
 10/18/19

Long Term Care Challenges

• Valid Fax Prescriptions

• LTC nurse takes non-controlled drug order via telephone from prescriber
• Reduces it to writing and sends to pharmacy as new order
• What origin code are you utilizing?
• Fax – Rx has fax header
• PBMs will mark invalid prescription (not valid fax without prescriber
signature), must call to verify

99

Long Term Care Challenges

• Medicare A days’ supply

• Do not ‘fudge’ days supply on Med A “refill on demand”
medications (e.g. Insulin with 1 days’ supply)
• Increased likelihood of billing to Med D incorrectly if changing pay
types
• Short cycle
• Short cycle based on NDA/ANDA (versus Brand/Generic)
• Use caution with medications that need to be dispensed in
original container (e.g. Linzess)

100

47
 10/18/19

Long Term Care Challenges

• Current gap in Medicare Part B Competitive Bid (since 12/31/2018)

• LTC pharmacies can now resume delivery of diabetic testing supplies –
Hooray!!!???
• Must deliver same day as billed (careful with overnight runs)
• DMEPOS Accreditation still applies for those that aren’t exempt
• Be prepared for intense documentation requirements, and AUDITS
• Safety Lancets in ALF – Medicare Part B will not reimburse; facility’s
responsibility to meet OSHA requirements – cannot upcharge patient
directly

101

Long Term Care Challenges

• Beyond Use Dating

• Recommend dispensing in smallest package size when/where appropriate
• Nursing Home practices do not invalidate FDA/manufacturer sterility
testing
• PBMs will not pay for early refills, or will recoup on audits despite nursing home
policies (e.g. throw away all ‘opened’ insulin or eye drops after 28 days)

102

48
 10/18/19

Long Term Care Challenges

• Medicare D audits/reversals due to patient being on a Medicare

Part A stay
• Often 6-12 months in arrears
• Consider contractual language with SNF to correct billing discrepancies
• Engage facility early in relationship and work on communication with
census changes before problems arise
• Think about post-relationship recoupments

103

Long Term Care Challenges

• Transitions in Care
• Do not bill discharge medications prior to day of discharge for Med A
residents
• Careful with SNF to ALF transitions, make sure the date of the move is
accurate
• Facilities are tempted to request medications in advance of patient
transitioning, not understanding the repercussions

104

49
 10/18/19

Long Term Care Challenges

• Agent of the Prescriber

• LTC nurses are not agents of the prescriber and cannot communicate CS
prescriptions to the pharmacy
• Physician may assent manifest to nurse for communicating controlled substances
(pharmacy must have on file)
• PBMs have been known to ask for proof of relationship
• Residence Codes
• Use appropriate codes based on patients’ residence
• 03 – SNF
• 04 – ALF

105

Long Term Care Challenges

• Submission Clarification Codes (CVS/CRK policies)
Override Code Definition Documentation Required Typical
Allowance
04 – Drug Medication cannot be - Copy of MAR, nursing notes, or med pass report that Up to a 5-day
Missing, located or has been has reason for override, supply
Dropped dropped
14 – Leave of Separate dispensing - Copy of prescription order allowing patient to leave, Up to a 5-day
Absence or of small quantities for chart notes with vacation supply requested, or POS supply
Vacation take home use indicating vacation supply requested
Supply
15 – Medication has been - Copy of MAR, nursing notes, or med pass report that Up to a 5-day
Contaminated, spit out or has reason for override, supply
‘Spit Out’ contaminated
18 – Newly admitted - Copy of Admission Sheet that includes date and copy of Multiple fills
Admission / the discharge orders (if applicable) up to a 31-day
Level of Care supply
Change

106

50
 10/18/19

Please go to MEET.PS/LTCAUDIT to answer poll questions!

107

108

51
 10/18/19

Summary

• LTC Audit Challenges

• Valid Prescription Orders/POS
• Delivery Sheets
• Beyond Use Dating
• Medicare A/D
• Submission Clarification Codes

110

LTC Pharmacy Audit Prevention/FWA

Compliance in 2019 - Handout
• The False Claims Act and Anti-Kickback Statutes are
two laws the federal government will use to prosecute
violators of FWA regulations.
• FWA Compliance Training is only one of seven
elements required for a Compliance Program.
• The most challenging aspects for LTC pharmacies when it
comes to audits are valid hard copies and signature
logs .

111

52
 10/18/19

Trenton Thiede PharmD, MBA

Chief Operating Officer – PAAS National®
[email protected]
608-541-8904

112

113

53