Pharmacies with an integrated point of sale (POS) system have an easier time providing proof that a copay collection happened at the point of sale. POS systems can tie the prescription number, date of sale, dollar amount collected and the method of collection all together in one place, typically in the form of a receipt. This data is stored within the pharmacy’s system and can be easily printed when needed. Pharmacies without a POS system often struggle to find any/adequate proof of copay collection.
Aside from ensuring that you have an integrated POS system for convenient data retrieval, there are a few other things to consider when audited for proof of copay collection. PBMs want to know how a copay was collected, and simply listing “cash, check or card” will not suffice.
Credit Card receipts should include the last four digits of the credit card number, the transaction authorization number, and the merchant ID number (PBMs typically prohibit pharmacies from outsourcing copay collection, so the merchant ID should be under the pharmacy’s name).
Check payments may require copies of cancelled checks, front and back.
Payment made by cash may require proof of cash bank deposits being made during the timeframe under audit.
Was a secondary payer involved? This can mean a coupon or secondary insurer was also billed and that may require additional proof including:
- A print screen showing adjudication to the secondary insurer
- Secondary payer plan information like the BIN, PCN, Patient ID, and group number
- Any eVoucher data applied by the switch
- Amount paid and any remaining out of pocket amount
When using a house charge account, pharmacies should be able to produce the following:
- Policy and Procedure for collection of monies due on the account
- Documented attempts to collect payment in the form of dated invoices sent to the patient and logged phone calls attempting to collect
- Itemized Accounts Receivable report showing payment received, tying the payment back to the prescription number, and any outstanding balance remaining
If waiving a copay due to financial hardship, pharmacies will need objective evidence of that hardship, like an application, tax returns, and a formal written Policy and Procedure. Caremark’s Network Provider Manual highlights waivers in section 3.03.08 as well as distinct expectations for pharmacy financial hardship programs in section 3.03.09. Financial hardship cannot be advertised or promoted, nor funded, in whole or in part, by a third party. It must also meet all requirements and restrictions of applicable law.
Non-routine, unadvertised waivers of copayments based on individualized determinations of financial need for patients with Medicaid may be acceptable without a financial hardship Policy and Procedure.
PAAS Tips:
- Consider using an integrated POS system as a convenient way to collect proof of copay data
- It is best practice that all copays should be collected at the time of sale
- Utilizing house charge accounts requires having a strong Policy and Procedure regarding copay collection
- Follow good cash handling policies like:
- Making bank deposits at regular intervals
- Avoid taking money directly from the register for business related expenses
- Balance the register at the end of each day
- For more information, please see the following Newsline articles:
- PAAS Fraud, Waste & Abuse and HIPAA Compliance members should review section 4.1.5 – Copay Collection in your Policy and Procedure Manual
Do You Have Adequate Proof of Patient Copay Collection?
PBMs require pharmacies to not only collect patient copays, but also have documentation to prove it. It is common for PBMs to request proof of copay collection when performing audits. Copays are used by the insurers to help patients understand medication costs and to encourage less costly alternatives. Pharmacies that alter or waive copays set by the PBM are at risk of those claims being recouped, as well as the potential for contract termination.
Pharmacies with an integrated point of sale (POS) system have an easier time providing proof that a copay collection happened at the point of sale. POS systems can tie the prescription number, date of sale, dollar amount collected and the method of collection all together in one place, typically in the form of a receipt. This data is stored within the pharmacy’s system and can be easily printed when needed. Pharmacies without a POS system often struggle to find any/adequate proof of copay collection.
Aside from ensuring that you have an integrated POS system for convenient data retrieval, there are a few other things to consider when audited for proof of copay collection. PBMs want to know how a copay was collected, and simply listing “cash, check or card” will not suffice.
Credit Card receipts should include the last four digits of the credit card number, the transaction authorization number, and the merchant ID number (PBMs typically prohibit pharmacies from outsourcing copay collection, so the merchant ID should be under the pharmacy’s name).
Check payments may require copies of cancelled checks, front and back.
Payment made by cash may require proof of cash bank deposits being made during the timeframe under audit.
Was a secondary payer involved? This can mean a coupon or secondary insurer was also billed and that may require additional proof including:
When using a house charge account, pharmacies should be able to produce the following:
If waiving a copay due to financial hardship, pharmacies will need objective evidence of that hardship, like an application, tax returns, and a formal written Policy and Procedure. Caremark’s Network Provider Manual highlights waivers in section 3.03.08 as well as distinct expectations for pharmacy financial hardship programs in section 3.03.09. Financial hardship cannot be advertised or promoted, nor funded, in whole or in part, by a third party. It must also meet all requirements and restrictions of applicable law.
Non-routine, unadvertised waivers of copayments based on individualized determinations of financial need for patients with Medicaid may be acceptable without a financial hardship Policy and Procedure.
PAAS Tips:
Would Your EPIPEN® Claims Pass an Audit?
PAAS National® continues to see a large number of EPIPEN® prescriptions flagged for audit, as well as targeted on OptumRx prescription validation requests. The PBMs often target EPIPEN® products due to their higher cost and confusion around proper billing practices and product substitution. Adhering to the guidance below can help avoid billing issues and reduce the risk of claim recoupment during an audit.
PAAS Tips:
Flu Shot Season Is Upon Us – Are You Prepared for an Audit?
As the flu shot season starts, PAAS National® wants to make sure you are ready to properly document these routine vaccines in case of an audit. Now is the time to check that you have all required documentation in place for this year’s flu shot season.
What is needed upon an audit:
*Caremark audit notices have started requiring the vaccine NDC and the NPI of the person administering the vaccine.
VAR and VIS forms, and information regarding what the CDC requires for health care providers to record, can be found on the CDC website.
PAAS Tips:
Days’ Supply Mistakes: A Fast Track to Recoupment
Calculating the days’ supply on a claim is something every pharmacy does throughout the workday. With a multitude of claims, clerical errors are bound to happen. What are the audit consequences when a days’ supply is billed incorrectly?
In the best-case scenario, an incorrect days’ supply would be treated as an educational discrepancy with no financial recoupment. This typically happens when the error does not impact the patient’s copay or the pharmacy’s reimbursement, and the auditor simply informs you of the correct days’ supply so that future claims can be submitted accurately.
However, not all payors take this approach. For example, Humana charges a $5 penalty fee for days’ supply errors – even for discrepancies as minor as one day. This fee is often assessed as an administration fee rather than a claim reversal, in an attempt to skirt state audit laws that prevent recoupment on “scrivener’s errors” or “technical discrepancies.”
Full claim recoupment may occur in a billing scenario where the incorrect days’ supply on one claim leads to the medication being refilled early on a subsequent fill. The “refill too soon” rejection will not be appropriately triggered due to the inaccurate days’ supply error on the prior fill. If you bill an inhaler for a 30-day supply (when it should have been a 60-day supply), then refill it a month later, the PBM will recoup that early refill. Additionally, if billing a 60-day supply would have increased the patient’s copay or changed your pharmacy’s reimbursement, the PBM may also look to recoup the difference from the first fill.
What if the insurance only allows a 30-day supply? Unfortunately, it is still up to the pharmacy to ensure refill intervals are appropriate based on the true/calculated days’ supply, not the days’ supply the pharmacy adjudicated due to the plan limit.
Another scenario that may trigger full recoupment involves the potential to bypass a plan limit. This occurs when the PBM rejects the claim stating they will only allow a certain number of doses per day. In an attempt to process the claim, staff may adjust the days’ supply [while keeping the quantity the same] to match the plan’s limit – this drastically increases audit risk! The correct response is to identify and address the underlying rejection message. This may involve contacting the prescriber to get a clarification on quantity per day or initiating a prior authorization process to secure approval for the originally desired dose.
PAAS Tips:
Largest Health Care Fraud Takedown in History
We are living in unprecedented times as the Justice Department announced the outcome of their 2025 National Health Care Fraud Takedown, marking one of the largest enforcement actions of its kind. Criminal charges were filed against 324 individuals, from various health care professions, for their alleged participation in a range of fraud schemes. The total intended losses amount to approximately $14.6 billion – more than double the previous record of $6 billion.
This nationwide effort involved collaboration between federal and state law enforcement agencies across the country including 50 federal districts and 12 State Attorneys General’s Offices. As part of the operation, the government seized over $245 million in cash, luxury vehicles, cryptocurrency, and other assets.
Leading up to the takedown, the CMS suspended or revoked billing privileges for 205 providers, which successfully helped prevent over $4 billion in false and fraudulent claims.
One area of focus in the investigation was the illegal distribution of prescription opioids. Authorities charged 74 individuals in 58 cases involving alleged diversion of more than 15 million pills, including opioids and other controlled substances. In one case, five individuals associated with a Texas pharmacy were charged with unlawfully distributing over 3 million opioid pills, which were allegedly sold through street-level trafficking operations.
Additionally, the DEA reported filing 93 administrative cases over the past six months aimed at revoking the prescribing or dispensing authority of controlled substances of certain pharmacies, medical practitioners, and companies. DEA Acting Administrator Robert Murphy stated:
“We’re targeting the entire ecosystem of fraud — from pill mills in Texas to kickback clinics exploiting Native communities. If you abuse your medical license to push poison or pad your pockets, we will hold you accountable.”
Telemedicine and genetic testing fraud schemes accounted for over $1.17 billion in alleged fraudulent claims billed to Medicare. According to the report, these schemes often intersect with other areas of concern, including durable medical equipment and COVID-19 testing – both of which remain priorities for ongoing enforcement efforts. In addition, approximately $1.84 billion was associated with alleged false and fraudulent claims billed to federally funded plans and private insurance for reasons deemed medically unnecessary, tied to kickbacks and bribes, or not provided at all.
PAAS Tips:
Are You Billing Divigel® Correctly?
Billing packaged products according to their proper size and unit of measure is crucial for pharmacies, as this common pitfall could result in hefty recoupments from PBMs.
When it comes to billing insurance, a medication like Divigel® (estradiol) transdermal gel packets can be confusing for pharmacies, as different strengths use different billing units. Some are measured in “each”, while others use “grams”. So, why the discrepancy?
According to the NCPDP Billing Unit Standard Fact Sheet, “Unit-of-use packages with a quantity less than one milliliter or gram should be billed as ‘one each’. For example, ointment in packets of less than 1 gram or eye drops in dropperettes that are less than 1 mL. This rule does not apply to injectable products.” This rule does apply to Divigel®.
Refer to the table below for a breakdown of the appropriate package sizes and billing units for each strength of Divigel®.
PAAS Tips:
When Medicaid is the Secondary Payor
Billing insurance isn’t always simple, whether it’s formulary issues, step therapy or plan limitations, it’s common for a pharmacy to receive a rejection when trying to bill a patient’s insurance. For patients with Medicaid as secondary coverage, can you simply send the rejected claim to Medicaid? Caution should be exercised.
Medicaid is typically referred to as the “the payor of last resort” because all options must be exhausted through a patient’s primary plan before submitting the full claim to Medicaid. Unfortunately, this isn’t as simple as identifying a primary claim that has rejected the prescription billed and then submitting the full claim to Medicaid so it will process. Pharmacies must first identify if this rejection can be resolved through the patient’s primary insurance (i.e., how would the pharmacy handle the claim if there was no secondary?). For example, if the primary payor is requiring prior authorization, that process must be sought either by receiving an approved prior authorization or a denied one (or changing the therapy to a covered drug product). Only then would it be appropriate to bill the patient’s Medicaid.
Be sure to utilize the Other Coverage Codes (OCC) appropriately. An OCC should be used when billing claims with multiple payors. This ensures the secondary payor reimburses the correct amount. Incorrect or inappropriate use of an OCC can lead to recoupments or even network termination if these errors are intentional. The codes below are typically recognized by third-party payors and used in NCPDP field 308-C8:
It is important to note that if a primary payor rejects a claim, the rejection codes are sent to the secondary payor. As previously mentioned, the first step when facing this predicament would be to resolve the coverage issue with the primary payor, whenever possible. Backing out of the claim and billing the secondary payor as primary may result in audit recoupment due to the secondary payor covering a cost that the primary payor might have paid. But what if OCC 3 is billed? The claim could still be at risk, as this depends on why exactly the primary insurance rejected the claim. Pharmacies should resolve primary payor rejections first by working through rejects like quantity limits, step therapy, formulary selections, or prior authorizations before billing the secondary payor.
PAAS Tips:
Dexcom G6/G7 Sensors: Retail vs DME
PAAS National® analysts have received numerous calls from pharmacies related to continuous glucose monitor (CGM) products made by Dexcom, particularly the G6/G7 sensors. There appears to be two different versions of Dexcom products – those labeled for “Retail” (pharmacy benefit) and those labeled for “DME” (medical benefit). Pharmacies report finding both products on wholesaler websites with different list prices and they aren’t sure which product they can buy, and which payors will pay for what product.
PAAS has spoken with Dexcom officials who confirmed the following:
Here is a list of Dexcom products with associated NDC (or SKU)
PAAS Tips:
GLP-1 Prescriptions Remain in the Crosshairs of Auditors
GLP-1 medications continue to come under scrutiny from PBM auditors for several reasons. High cost, off-label use, rising utilization, and billing irregularities make these easy audit targets. Pharmacies must remain diligent to ensure accuracy and appropriateness when dispensing these medications to avoid recoupments.
The latest in audit recoupments have come from…
prescriptions for “microdosing”. Patients and prescribers have become aware of an internet sensation of injecting smaller doses for titration or maintenance therapy. The concept of using a certain number of clicks on the pen dial may be prescribed to obtain this microdose. Dosing at this level may be an attempt at reducing side effects or saving money.
GLP-1 pens are designed to deliver a specific, measured dose and the manufacturer instructions clearly indicate the pens should only be dialed to the appropriate dose and the number of clicks should not be counted. Pharmacies can refer to DailyMed for each medications’ package insert.
Manufacturers of these GLP-1 medications have not gone through the approval process from the FDA to ensure this practice is safe or effective. Consequently, PBMs may consider these prescriptions experimental or not medically appropriate. Pharmacies should consult with prescribers on the appropriate dosing and obtain new instructions, as needed.
PAAS Tips:
COVID-19 Vaccine Update: Shared Clinical Decision-Making
The CDC recently revised recommendations for COVID-19 vaccination by (i) removing the recommendation for pregnant women to receive the vaccine and (ii) that individuals ages 6 months to 17 years may receive the vaccine using a shared clinical decision-making (SCDM) approach. The SCDM recommendations are meant to be flexible and informed by the characteristics, values, and preferences of the individual patient (or guardian) and the clinical discretion of the health care provider.
There are now five vaccines that follow the SCDM approach rather than routine, catch-up, or risk-based approach where the default is to “vaccinate, unless contraindicated”.
Multiple organizations have objected to these changes and some have even filed lawsuits against the U.S. Department of Health and Human Services.
PAAS Tips: