Pharmacy Compliance: Beyond Med Errors. Overview
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1 Pharmacy Compliance: Beyond Med Errors Daniel P. Fitzgerald, Senior Attorney Litigation & Regulatory Law Department Walgreen Co. James S. Mathis, Esq., Nashville, TN Overview Med Errors & Controlled Substances Oversight Drug Orders Billing Utilization Review/Formulary Management Other Hot Topics 2 1
2 Audience Hospital Retail Institutional PBM/Pharmacy Benefit Manager 3 Fee for service business Historical Programs Focus on getting the correct drug to the patient Focus on controlled substance handling State regulation through Boards of Pharmacy and federal DEA for controlled substances E.g. HCA Compliance Process Review, Pharmacy Director Questionnaire) 4 2
3 Oversight - Many Watchful Eyes ZPICs MA Plans Part D Plans DOJ Commercial Payors CMS RACs MICs Relators Attorneys HealthCare Provider Personal Injury Litigants State Legislatures HHS Whistleblowers State AGs/ Medicaid Fraud Control Units (MFCUs) OIG Congress Press State Medicaid Competitors Recovery Audit Program Requires CMS to contract with Recovery Audit Contractors (RACs) to review Medicare providers, Medicare Advantage and Part D plans, and Medicaid Purposes: o Identify underpayments and overpayments and recover overpayments o Lower CMS error rate o Protect taxpayers and beneficiaries Types of RAC reviews: o Coverage determinations o Coding determinations o Medical necessity determinations Payments to RACs will be made only from amounts recovered on a contingent basis 6 3
4 RAC Limitations Must use targeted review to identify claims for overpayment Issues to be reviewed must be pre-approved by CMS and published on RAC Website Limited to look-back period of 3 years from date claim was paid Must accept imaged medical records Must issue detailed review results letter Must coordinate their audits with other entities to avoid overlapping audits 7 Medicaid Integrity Program Requires CMS to contract with Medicaid Integrity Contractors ( MICs ) to: o Review provider claims o Audit providers o Identify overpayments o Educate with respect to payment integrity and quality of care Provides support and assistance to states: o Support, not supplant, state Medicaid program integrity efforts o Work closely with states o Provide technical assistance and training to state program integrity staff 8 4
5 MICs 3 types of MICs: o Review MICs o Audit MICs o Education MICs Objectives of MICs o Ensure that claims for which providers received payment were: For services that were actually provided and properly documented; and For services properly billed, using correct and appropriate procedure codes 9 Important Features: MICs Not paid on a contingency fee basis Identify only overpayments Permitted to extrapolate CMS is supposed to coordinate MIC audits with other auditors 10 5
6 State Medicaid Audits Each state has its own audit process Some common features: o States have authority to request records to justify payment o States may recoup overpayments o Providers are afforded appeal rights to challenge state findings Some states have historically been more active in oversight and enforcement Others states are becoming more active as a result of increased federal requirements, increased funding, and state budget pressures 11 Prescriber Eligibility Potential Prescriber Eligibility Issues with Prescription Claims: Prescriber state license does not match prescriber last name Prescriber state license expired/inactive Prescriber NPI expired/inactive/invalid Prescriber deceased or sanctioned Prescriber DEA expired/inactive, but still wrote controlled substance prescription 12 6
7 Sufficiency of order Oral vs. Written Electronic vs. Paper Availability to auditor DEA Registrant Agency issues Refills Drug Orders 13 National Council for Prescription Drug Program (NCPDP) helped introduce D.0, an updated version of the HIPAA Standard for electronic pharmacy claims transactions (former version was NCPDP 5.1) D.0 Standard became effective January 1, 2012 New D.0 Standard includes new and updated fields, such as eligibility, claim status, and referrals All covered entities are required to utilize new D.0 Standard when submitting pharmacy claims (ex: physicians, hospitals, pharmacies, dentists, payors) 1414 Billing - NCPDP and D
8 Billing Version 3.0 of NCPDP standard for Medicaid subrogation ICD-10 NDC Codes Patient pick-up or return COB/credit balances Usual & customary pricing 15 Cost drivers Utilization Review Interactions Use of generics Rx for a higher does of quality Modern Healthcare September 12, (analysis shows that hospitals with lower spending on drugs often have improved outcomes and profits) 16 8
9 Formulary Management Effectiveness Off-label (Medically Accepted Indication) Cost reduction Cost analysis to the patient (or payor) may be viewed as program enhancement; cost analysis to provider may be viewed as threatening patient care and unjust enrichment Omnicare settlement (Nov 2006) 17 Other Hot Topics Privacy PHI/Protected Health Information on vials CVS/Rite Aid (Jan 2009/June 2010) Drug abuse Oxycontin See The Obama Administration and Expanded Efforts to Fight Fraud; Fact Sheet Tuesday, December 13, checkdate=&checkkey=&srchtype=1&numdays=0&srchopt=0&srchdata=&keywordtyp e=all&chknewstype=6&intpage=&showall=1&pyear=1&year=2011&desc=&cboorder= date Monitoring of Cardinal Health and threatened suspension of 4 Sanford, FL CVS pharmacies ( Pharmacies Swept into Drug Wars, WSJ, February 15, 2012) 18 9
10 Other Hot Topics Cannabis Drug Donation programs 19 Dan Fitzgerald Questions Jim Mathis 20 10
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