Pharmacy Provider Manual For submitting claims under BIN

Transcription

1 Pharmacy Provider Manual For submitting claims under BIN Updated November 2017 Visit for the latest version of this manual

2 Contents Pharmacy Provider Quick Reference... 4 General Information Overview and General Provisions Customer Service Contact Information Network Pharmacy Resources Portal Notification of Changes PHI and HIPAA Eligibility Requirements Medicare Part D 4Rx Data Validation NPI Reporting of Fraud, Waste, and Abuse Member Bill of Rights and Responsibilities Pharmacy Standards of Practice Controlled Substances Tamper Resistant Prescription Pad Drug Supply Chain Security Act Claims Processing Claim Pricing and Reimbursement MAC Invoice Retention Required for Authentication of Drugs Bought From Reliable Source DAW Codes Definition of Maintenance Drugs Bulk Chemicals and Part D Generic Drug Standards Pricing of 340(b) Drugs Point of Sale Electronic Claim Submission Prescription Origin Code E-prescribing Pharmacy Payor Sheet Calculation of Quantity and Days Supply As Directed and Prescriptions Missing or Without Directions Refill Frequency PRN and Days Supply Calculations Durable Medical Equipment Prosthetics Orthotics and Supplies Coordination of Benefits Claims Processing Best Available Evidence Claims Processing Compound Processing Vaccine Processing Paper Claims Reversals Timing Medicare E-1 Eligibility Query Medicare Part D Coverage GAP Discount Program Drug Shortages Partial Fill Claims Processing Guidance Standard Billing Units Medicare Prescription Drug Coverage and Your Rights Medicare Part D Standard Pharmacy Notice Coupons and Copay Cards Trial and Synchronization Fills Pharmacy Audit Billing Errors Pharmacy Audits of Claims Audit Overview Audit Notification Timelines for Submission of Documents- Desktop Audits Medicare Beneficiary Trust Audit Expenses Medicare Drug Integrity Contractor HEAT Task Force Medicare Part D Hospice Patients Medicare Part D End Stage Renal Disease (ESRD) Patients Inspection of Records Audit Findings Audit Adjustments and Reversals Corrective Action Plans Audit Results Audit Appeals Common Reject Code Processing Common Reject Codes DESI Drugs Prescriber Validation Prescriber Not Found OIG Excluded Prescriber Script Over Limit Rejects Non-matched NDC Drug Utilization Review Processing Pharmacy Claims Processing Guidance for DUR Part B versus Part D Overlap Drugs ESRD Drugs Claim Override Processes Vacation Override Lost Scripts/Stolen Override Transition Override Transition Override- Managed Groups Transition Override- Part D Groups Florida Medicaid Hernandez Settlement Refills in Declared States of Emergency or Disasters Group Health Part D Plans Temporary Pharmacy Facilities National Pharmaceutical Services Pharmacy Provider Manual 2

3 Utilization Management Programs Step Therapy Quantity Limits Prior Authorization Pharmacy Provider/Lock-in Program Managed Part D MEDICs Look-Alike, Sound-Alike (LASA) Medications MedWatch Forms General Covered Benefits General Benefit Exclusions Formularies Therapeutic Interchange Medicare Part D Claims Messaging OTC/Nutritional Benefit Programs Group Health Plans Part D Plans Medicaid Plans Processing OTC Benefit Claims Long Term Care Pharmacy Providers Short Cycle Dispensing and Uniform Dispensing Techniques OBRA 90 and Prospective Review Policy on Back-Dating Emergency/Transition Procedures Medicare Covered Drugs CMS/Part D Requirements LTC Rebate Reporting Requirements and Submissions Patient Location Codes and Claims Submissions LTC Timely Claims Submission Requirement Specialized Pharmacy Services Specialty Pharmacy Sterile Compounding Pharmacy Home Infusion Pharmacy Home Infusion Part D Requirements Per Diem Submissions Pharmacy Provider Relations Network Participation Medicare Part D Contracts and Addendums Official Notices Pharmacy Provider Grievance Process Network Pharmacy Compliance Compliance with Laws and Regulations Signature Logs Claim Reversals Other Requirements State Requirements Pharmacy FWA Training Personnel HHS/OIG Exclusion List Review Requirement Diverted Pharmaceuticals Program Requirements Quality Management Programs Pharmacy Payments Payment Cycles Source of Funding Pharmacy Reconciliation Report Pharmacy Payment Status Inquiries Appendices State Regulatory Addendums Common Billing Errors MAC Pricing Appeal Form Pharmacy Audit Appeals Pharmacy Audit Appeal Form Medicare Prescription Drug Coverage and Your Rights 94 Long Term Care Pharmacy Low-Income Subsidy Cost Sharing Collection Certification Attestation National Pharmaceutical Services (NPS) is a fully-integrated pharmacy benefit manager that delivers big-box capabilities with the great service of a specialty partner. Using a proprietary claims processing system, NPS builds custom, end-to-end solutions that effectively manage prescription drug costs and ensure appropriate care for members. Driven by a transparent model pioneered by its founders in 1993, NPS upholds full disclosure of claim accuracy and payments as a baseline in every relationship. This model guarantees, plans deliver on-demand drugs with maximum discounts, and that clients see exactly where every dollar goes. Exemplified by success and growth in this area, NPS strives to balance the benefits of: Clients by delivering efficient, effective, safe, and reliable prescription benefit plans. Members through prescription care that provides education and optimal health outcomes. Pharmacy Providers through solutions that enhance customer satisfaction and trust. Healthcare Providers by offering flexibility to give patients the most appropriate prescription care. The Healthcare Industry by spearheading the future of healthcare management with high integrity. National Pharmaceutical Services Pharmacy Provider Manual 3

4 Pharmacy Provider Quick Reference Processor Contact Information National Pharmaceutical Services For hearing Impaired (TTY) Alternative Language Services Available Hours of Operation The NPS Pharmacy and Member Help Desk Center is open 24 hours a day, 7 days a week Bank Identification Number (BIN): Processor Control Numbers (PCN): Processor Mailing Address Network Pharmacy Contract Questions Commercial/Group Health/Medicaid/All Other: NPS Medicare Part D: DNPS Secondary Claims (if needed) to Part D: NPS2 National Pharmaceutical Services P.O. Box 407 Boys Town, NE pharmacy_relations@pti-nps.com Eligibility Issues MAC Concerns Or via at MAC@pti-nps.com NCPDP Version Supported NCPDP D.0 For Transmission problems, please contact your switch: Network Pharmacy Resources Emdeon/WebMD switching services Relay Health/NDC switching services Registration is required Any requests for an interpretation of the Pharmacy Provider Manual should be submitted in writing. Inquiries regarding this Manual, claims processing, claims adjustments, nonpayment of claims, or professional questions should be directed to: National Pharmaceutical Services Provider Relations Department PO Box 407 Boys Town, NE National Pharmaceutical Services Pharmacy Provider Manual 4

5 General Information 1.1 Overview and General Provisions National Pharmaceutical Services (NPS) is a national prescription claims processor with a nation-wide network of over 63,500 pharmacies. NPS is a division of Pharmaceutical Technologies, Inc. and is headquartered in Omaha, Nebraska. NPS has been servicing member pharmacy benefit plans since its inception in all 50 States and the US Territories. NPS administers several types of prescription benefit programs including group health, Medicare Part D, Managed Medicaid, work related injury, health savings accounts, and consumer pharmacy benefit programs. Each program has its own guidelines for days supply, ingredient cost pricing, copayment/coinsurance, drug coverage, and informational drug utilization messaging. Please refer to the NPS point of sale messaging to receive accurate information regarding the specific patient, group, prescription drug, copayment/coinsurance, and pricing pertaining to the claim submitted. Mission Statement NPS is passionate about improving quality of life by providing flexible, affordable solutions with personalized service to our pharmacy benefit partners. The purpose of this Pharmacy Provider Manual is to explain NPS processing policies and procedures as well as the obligations of Pharmacies. It is the Network Pharmacy Manual as referenced in the Network Pharmacy Agreement. This Manual will be updated at the discretion of NPS. Nothing in this Manual is intended to expand upon the obligations of NPS under the Network Pharmacy Agreement. In the event Pharmacy determines that there is any conflict between different terms in this Manual, or between this Manual and the Network Pharmacy Agreement, Pharmacy should contact NPS for direction. The Manual, at the time of drafting, was prepared in compliance with all appropriate legal and professional standards. Nothing contained herein is intended to authorize or endorse any action which is in violation of any applicable law. Advertising and Promotion Without the prior written consent of NPS, Network Pharmacy must not use words, symbols, trademarks or service marks which NPS uses, in advertising or promotional materials or otherwise, and Network Pharmacy must not advertise or publicly display that it is a NPS Pharmacy without the prior written consent of NPS. Network Pharmacy must immediately cease any and all such usage immediately upon request of NPS or upon termination of this Agreement. NPS may list Network Pharmacy by name, address, and telephone number for each of its locations in applicable directories, brochures, or other publications for distribution and/or use by NPS, Payers, and Eligible Persons. Confidentiality and Proprietary Rights All Eligible Persons information related to Prescription Drug Benefits and other records identifying Eligible Persons shall be treated by Network Pharmacy as confidential and proprietary. Network Pharmacy agrees never to use Eligible Persons information for competitive purposes, nor to provide such information to others for Network Pharmacy s pecuniary gain. Further, this information shall not be given to any third party, except to the extent that disclosure may be required pursuant to Law, or may be permitted by the Payer or NPS in writing. All materials relating to pricing, contracts, programs, services, business practices, and procedures of NPS are proprietary and confidential. Network Pharmacy must maintain the confidential nature of such materials and return them to NPS upon termination of the Agreement. All information contained in the claims system or that was obtained by or through the administration and processing of claims is the property of NPS. Network Pharmacy must promptly notify NPS if it becomes aware of any use of confidential information or data that is not authorized by NPS. Network Pharmacy acknowledges that any unauthorized disclosure or use of information or data obtained from or provided by NPS would cause NPS immediate and irreparable injury or loss that cannot be fully remedied by monetary damages. Accordingly, if Network Pharmacy should fail to abide by these provisions, NPS is entitled to seek and obtain injunctive relief, monetary remedies or other such damages as available by Law against the Network Pharmacy. Court Orders, Subpoenas, Governmental Requests If NPS receives a court order, subpoena, or governmental request relating to Network Pharmacy, NPS may comply with such order, subpoena, or request, and Network Pharmacy must indemnify and hold harmless NPS for, from, and against any and all costs (including reasonable attorneys fees and costs), losses, damages, or other expenses NPS may incur in connection with responding to such order, subpoena, or request. National Pharmaceutical Services Document Title 5

6 1.2 Customer Service Contact Information The NPS Help Desk is open 24 hours a day, seven days a week. The Help Desk may be reached at The Help Desk is designed to assist pharmacies, members, and plan Sponsors with any issue related to pharmacy benefits. The NPS Help Desk can assist callers from a variety of language backgrounds. The TDD/TYY number for the hearing impaired is Network Pharmacy Resources Portal NPS offers an online portal for network pharmacies to access the Pharmacy Provider Manual, pharmacy bulletins, payor sheets, MAC pricing, information on fraud, waste, and abuse (FWA) training, and other resources. The portal, which requires registration, is available at From the home page, follow the link for Network Pharmacy Resources, then click Register on the following page. Users will need the following pharmacy information to register: NPI, NCPDP, federal employer identification, state license, and DEA numbers. City, state, and zip code. address. Any prescription number submitted by the pharmacy and processed by NPS with a date of service in the preceding 72 hours. The pharmacy contract type (independent, affiliate, chain, paper claim only, or special). This Manual is also available without registration at Notification of Changes If your pharmacy has a change in ownership, location, or addition of location, please fax or NPS Provider Relations at Fax: Pharmacy_relations@pti-nps.com In addition, if you have any questions relating to these topics you may call and ask for the Provider Relations department. NPS uses NCPDP as its primary source for updating all pharmacy demographic information such as pharmacy address, telephone number, etc. Please visit to review your current NCPDP record and update any outdate or expired information accordingly. 1.4 PHI and HIPAA NPS will maintain all medical and pharmacy records as private and confidential in accordance with State and Federal health information privacy laws. This policy applies to all medical and pharmacy information, wherever it is collected, stored, processed, transferred or used, no matter the form. NPS will ensure that protected health information (PHI) is used and disclosed in accordance with the Health Insurance Portability and Accountability Act s (HIPAA) privacy rule. Member/beneficiary PHI will only be used or disclosed to a health plan or healthcare provider for purposes of treatment, payment and operations. PHI cannot be used for purposes unrelated to treatment, payment, or health care operations without explicit authorization from the member/beneficiary or as otherwise permitted under the Privacy Rule. In all appropriate instances, NPS will provide only the minimum amount of information necessary to fulfill the purpose of the use or disclosure. Authentication NPS will verify the identity of the entity requesting disclosure of PHI and obtain documentation, statements, or representations (written or oral) that evidence the authority of the requester to access the member/beneficiary s PHI as follows: 1. Member/Beneficiary Identity NPS staff will authenticate a member/beneficiary by verifying his/her name, date of birth, and membership ID number or his/her address against the member/beneficiary s data in the NPS system. If the staff member is not able to match the information in the NPS system with the information provided by the member/beneficiary, PHI will not be used or disclosed. 2. Pharmacy Provider NPS staff will authenticate the identity of all pharmacies by verifying the pharmacy s NABP (National Association of Pharmacy Boards) number or NPI (National Provider Identification) number. a) If the pharmacy s information does not match the information in the NPS system, PHI will not be disclosed to the pharmacy. b) If the pharmacy provides information that matches a provider listed in the NPS system, NPS staff will obtain information from the pharmacy to authenticate the member/beneficiary who is the subject of the inquiry, in accordance with subsection 1 above. In the event that the pharmacy is unable to provide sufficient information to authenticate the member/beneficiary, PHI will not be disclosed to the pharmacy. 3. Health Care Provider NPS staff will authenticate a physician, nurse practitioner, or physician assistant and his/her office staff by verifying his/her name and DEA number or NPI number. National Pharmaceutical Services Pharmacy Provider Manual 6

7 a) If the health care provider s information does not match the information in the NPS system or other information related to the processing of a Coverage Determination request, PHI will not be disclosed to the health care provider. b) If the health care provider supplies information that matches a provider listed in the NPS system, NPS staff will obtain information from the health care provider to authenticate the member/beneficiary who is the subject of the inquiry, in accordance with subsection 1 above. In the event that the health care provider is unable to provide sufficient information to authenticate the member/beneficiary, PHI will not be disclosed to the health care provider. 4. Other Health Care Providers For treatment, payment, and health care operation purposes, NPS will disclose PHI to other health care providers as follows: a representative of a Hospital or Long-Term-Care Facility shall provide NPS with his/her name; the facility s name; the facility s NPI number; and a call-back number for the provider. The provider will also be required to provide information sufficient to authenticate the member/beneficiary in accordance with subsection 1 above. 1.5 Eligibility Requirements The eligibility format used by the majority of NPS s Benefit Sponsors includes the following elements: Covered Person identification (ID) number Date of birth Person Code Group Number Some plan Sponsors require additional information for processing. Please refer to the payor sheet for additional data fields. The ID card does not ensure a Covered Person s eligibility. If a Covered Person does not have a member ID card and Pharmacy is unsure of eligibility, they should call the NPS Help Desk at to obtain accurate member information prior to processing a claim. Members are instructed to present their ID card when obtaining a prescription from a network pharmacy. When submitting a claim for service, it is important that you ask to see the member s ID card and the name of the member. Clients may also have custom prescription drug or integrated medical/prescription drug identification cards. These ID cards will bear the NPS logo as shown below. Process these cards the same as you would any other NPS identification card. Accurate data entry at the time of dispensing ensures the accurate identification of the member/eligible person. Ask the member for his/her current identification card. Submit accurate: Identification number (as listed on card). It is important to confirm that the ID number that you are using is the most current active identifier. Rx Group number Date of birth Gender First Name Relationship code Person code The pharmacy may contact the Pharmacy Help Desk at to verify eligibility. For those instances when a Medicare Part D Member does not have a Member ID card, please follow these steps: Person is at the pharmacy, has no proof of coverage but states is enrolled in a Medicare Part D Plan. Member may present generic marketing materials that were provided with the inquiry kits. 1) E1 transaction initiated to determine eligibility; this is done by the Pharmacist. a) Eligibility validated; Pharmacist processes prescription. b) Eligibility not validated or Pharmacist unable to access E1, move to Step 2. Note: An E1 transaction can be initiated with the member s Social Security Number (SSN) or member s ID. 2) Pharmacist contacts NPS Pharmacy Help Desk 24 hours a day, 7 days a week: a) Pharmacy Help Desk validates eligibility and claim is processed. b) Unable to validate eligibility, move to Step 3. 3) Call center confirms eligibility; Member eligibility entered real-time into NPS system and Pharmacist fills prescription; Or Unable to confirm eligibility or eligibility has been denied; person pays retail for drug; 14-day window to allow for online processing at pharmacy when eligibility issue resolved or person to submit a paper claim for reimbursement; Or Person unwilling to pay retail, prescription not filled. National Pharmaceutical Services Pharmacy Provider Manual 7

8 Person is at the pharmacy, has an acknowledgement or confirmation letter with an enrollee number and states that they are enrolled. 1) E1 transaction initiated to determine eligibility or Pharmacist attempts to process Claim online; this is done by the Pharmacist. a) Eligibility validated; Pharmacist processes prescription online. b) Eligibility not validated or Pharmacist unable to access E1, move to Step 2. 2) Pharmacist contacts NPS Pharmacy Help Desk 24 hours a day, 7 days a week: a) Pharmacy Help Desk validates eligibility and Claim is processed. b) Unable to validate eligibility, move to Step 3. 3) Call center confirms eligibility; Member eligibility entered real-time into NPS system and Pharmacist fills prescription; Or Unable to confirm eligibility or eligibility has been denied; person pays retail for drug; 14-day window to allow for online processing at pharmacy when eligibility issue resolved or person to submit a paper claim for reimbursement; Or Person unwilling to pay retail, prescription not filled. See Section 2.9 Medicare E-1 Eligibility Query for additional guidance on performing an E-1 Query. Retroactive Eligibility Eligibility under a Benefit Plan may change retroactively if: The plan, sponsor, or NPS receives information that an individual is no longer a member; The member s policy or benefit contract has been terminated; The member chooses not to purchase continuation coverage; or The eligibility information received is later determined to be incorrect. As determined by the Centers for Medicare and Medicaid Services (CMS), with respect to Medicaid, Medicare Advantage Prescription Drug (MAPD) or Prescription Drug Plans (PDPs). Involuntary Disenrollment by Benefit Plan/Sponsor Pharmacy shall cooperate with NPS and its Plan Sponsors in gathering and/or providing information on Members for which the Benefit Plan or Sponsor is seeking involuntary disenrollment for conduct considered abusive and disruptive to the point where service is disrupted for the Member or other Members. As a Network Pharmacy Provider, NPS encourages that you keep notes and any documentation concerning abusive and disruptive contact as you may be asked to provide this information at the time you report abusive and disruptive Members Medicare Part D 4Rx Data Validation As specified in Federal regulations at (c)(4), each Medicare Part D Sponsor must assign a unique BIN, PCN combination, and cardholder identification number. Consistent with CMS s guidance, NPS will enforce the 4RX data validation. This validation will include a review of the BIN, PCN, Cardholder ID, and Rx Group ID submitted on the claim. In the event that the submitted member data does not match the information on file, the claim will be rejected using one or more of the following NCPDP Reject Codes: NCPDP Reject 01 Missing/Invalid BIN NCPDP Reject 04 Missing/Invalid PCN NCPDP Reject 06 Missing/Invalid Group NCPDP Reject 07 Missing/Invalid Cardholder ID In addition, the Coordination of Benefits Response Segment will be returned, when applicable, containing the expected data elements to facilitate resubmission of the claim. Always ask to see the member s ID card. The member s identifier, BIN, PCN, and Rx Group number must be submitted for proper claims processing. 1.6 NPI Effective January 1, 2013 in accordance with the CMS regulations and guidance, NPS will require all of its contracted pharmacies to process Medicare Part D prescription claims using the prescriber s NPI. NPS is expanding a point-of-sale edit to ensure the accuracy of pharmacy claims data. The edit will now require the use of a valid prescriber NPI number in the pharmacy claims submission. The submitted prescriber ID must be valid (411- DB). The edit will check to ensure the submitted prescriber ID is valid. If the prescriber ID is invalid, the claim will reject at point of sale. The NCPDP reject for pharmacy claims submitted with an invalid prescriber ID is 56-Non-Matched Prescriber ID. Pharmacies will need to resubmit the claim with a valid prescriber ID. If you determine the prescriber ID is valid from another documentation source, such as If a member presents a prescription without the prescriber s NPI or DEA, please: 1) Call the prescriber s office to request the NPI or DEA; or 2) Obtain the prescriber s NPI from the NPI registry web page: NCPDP Field Requirements: Identifying an incorrect prescriber in the transmitted claim, upon audit, will result in a recoupment of the net amount National Pharmaceutical Services Pharmacy Provider Manual 8

9 paid if the prescriber contests writing the prescription. DO NOT submit the pharmacy s NPI number in the Prescriber ID field. Common Prescriber Identifier Errors Invalid format, check digits submitted (Ex: NPI XXXXXXXXXX, DEA AAXXXXXXX). CMS will not reimburse the Prescription Drug Event (PDE). Invalid Identifier: the NPI must be present in NPPES and the identifier matches the prescriber s last name. Inactive Identifier: the license must be current and the prescriber is not deceased at the time the prescription is written. Invalid DEA for Controlled drugs: the prescriber must have a valid DEA submitted or value that is cross-referenced from the NPI. NPS does not accept claims submitted using a DEA number belonging to a hospital or other facility. Invalid Scope of Practice for Controlled drugs: the controlled drug must be within the prescriber s DEA schedule registration. Just because a prescriber has a DEA license, does not mean an authorization to prescribe any Scheduled Drug. If a prescriber s NPI absolutely cannot be obtained, please contact the NPS Customer Service Center for assistance to prevent Member disruptions. However, we do encourage all pharmacies to use the prescriber NPI when possible. We also advise caution be exercised when searching prescriber DEA or NPI numbers by name only. We have had many instances of a sanctioned provider s NPI or DEA submitted which causes member claims to be rejected due to sanctioned status. Please make every effort to ensure you have the correct DEA or NPI and validate on an address and state license if possible. 1.7 Reporting of Fraud, Waste, and Abuse To find additional information about FWA, go to the CMS website at: How to Report Potential Fraud, Abuse, or Suspicious Activity If you suspect fraud, abuse, or suspicious activity has occurred, is occurring, or will occur, please report it immediately through any of the following ways: 24 hour Toll Free Hotline: 1 (800) Compliance@pti-nps.com Fax Info to NPS Compliance: 1 (402) Mail: National Pharmaceutical Services, Inc. Attn: NPS Compliance PO Box 407 Boys Town, NE In addition to the above reporting resources you may report potential Medicare Part D drug violations to the: HHS OIG: HHS-TIPS ( ) HHSTips@oig.hhs.gov Fax: Medicare Program directly at: Whistleblower protection A whistleblower is an employee, former employee, or member of an organization who reports suspected misconduct. The Federal False Claims Act protects whistleblowers from discharge, demotion, suspension, threats, harassment, and discrimination in the terms and conditions of employment. Whistleblower employment protection under the 1986 Federal False Claims Act Amendments includes reinstatement with seniority status, special damages and double back pay. Whistleblowers filing under the False Claims Act may receive up to 30% of recovered damages, depending on the circumstances of the case. 1.8 Member Bill of Rights and Responsibilities In an effort to recognize the member s rights with respect to healthcare providers, products and pharmacy service, NPS has adopted the following Member Bill of Rights. A MEMBER S RIGHTS INCLUDE, BUT ARE NOT LIMITED TO THE FOLLOWING: To exercise the foregoing rights without regard to age, sex, marital status, sexual orientation, race, color, religion, ethnicity, ancestry, national origin, mental or physical disability, genetic information, health status, source of payment, or utilization of services. To be treated with respect and recognition of their dignity and need for privacy. To have their prescriptions dispensed and pharmacy services provided from their choice of pharmacy in the NPS network. Subject to plan network limitations and restrictions. To know the terms and conditions of their prescription drug benefit plan, the content of preferred drug lists, and the procedures for obtaining exemptions or prior authorizations. To receive any legally prescribed product, realizing this may require them to bear the expense of such a choice. To ask for and receive any supplier s product that will legally fulfill a generically written prescription. To obtain relevant, current, and understandable information concerning their medication therapy and its National Pharmaceutical Services Pharmacy Provider Manual 9

10 relevance in the treatment plan from their healthcare provider. To discuss and request information related to their specific prescribed medication, the possible adverse side effects, and drug interactions. To expect that all records and discussions pertaining to their drug therapy will be treated as confidential. To expect that their specific information regarding pharmaceutical medications will not be extracted, provided, or sold to outside parties without their informed and expressed written consent. To have the opportunity to voice complaints or appeals about NPS, or the care provided at NPS Network Pharmacy Providers, and to an appeals process to ensure fair resolution of a complaint or grievance. A MEMBER S RESPONSIBILITIES INCLUDE, BUT ARE NOT LIMITED TO THE FOLLOWING: Knowing, understanding and abiding by the terms, conditions and provisions of the NPS-administered prescription drug benefit plan. This information is made available through the Plan Summary Document. Paying co-payments, coinsurance, or deductibles as stated in the Plan Summary Document at the time service is provided and accepting financial obligations for services rendered. Being knowledgeable about their prescription drug therapy, including risks and limitations. Complying with their prescribed drug therapy regimen and maintaining a healthy lifestyle. Disclosing relevant information that is necessary for appropriate selection of drug therapy including health status, lifestyle, food and drug allergies, and medication history. To participate effectively in decision making, members must take responsibility for requesting information or clarification about the drugs they are taking when they do not fully understand information and instructions. To accept personal responsibility if they refuse treatments, medications, or services. Carrying their NPS Network SmartCard identification card and identifying themselves as a SmartCard holder prior to receiving pharmaceutical products and/or services. 1.9 Pharmacy Standards of Practice The standards of practice include but are not limited to the following: When a multisource brand drug product is dispensed, process the claim with appropriate Dispense as Written (DAW) Code according to the DAW Code Standards section of this Manual. Reinforce the use of generic and preferred brand products with NPS cardholders and prescribers. When a multisource brand drug is ordered, Pharmacy may contact the prescriber to determine if a generic equivalent can be dispensed as an alternative. Display all Drug Utilization Review (DUR) alerts to the dispensing pharmacist. Inform NPS cardholders as to the proper storage, dosing, side effects, potential interactions, and use of medication dispensed within professional practice guidelines. Submit accurate DEA number, NPI, or other prescriber identifier on all claims in the correct NCPDP data field. Notify NPS within 7 days of any change in the status of the Pharmacy s or Pharmacist s license. Submit claims to the NPS system only for the patient for whom the prescription was written by the prescriber. Maintain at least the level of professional liability insurance required, currently $1,000,000/ $3,000,000. Collect from each Eligible Person the applicable copayment/coinsurance. Use an approved Signature Log or equivalent document for all NPS prescriptions dispensed. Submit the pharmacy s Usual and Customary (U&C) price, which represents the lowest net price a cash patient would have paid on the day that the prescription was dispensed inclusive of all applicable discounts. Pharmacy may not submit prescriptions to pharmaceutical companies for rebates, discounts, or similar programs except as authorized by NPS in writing. (NPS retains the right to submit prescriptions to pharmaceutical companies in connection with its own rebate programs.) Dispense medications from the largest package size on hand and submit the corresponding NDC number. When submitting a claim, the NDC number of the package size used should be transmitted on the claim. Pharmacy must dispense from the most cost-effective NDC with the lowest net cost to the member and plan when appropriate. All authorized refills of any prescription must bear the original prescription number. An on-site registered and licensed pharmacist experienced in third-party procedures will supervise the claims submitted by the pharmacy. All claims submitted by the pharmacy will be in accordance with the metric decimal quantity guidelines established by NCPDP from time to time. Pharmacy shall not process an automatic refill for a Prescription Drug Benefit for an Eligible Person unless and until such refill has been authorized by the Eligible Person. Claims submitted for auto-refill programs must be for only maintenance drugs as defined in Section National Pharmaceutical Services Pharmacy Provider Manual 10

11 Reverse claims for any drug product returned to stock within 14 days of the date the claim was originally billed. Return products to stock for reuse only when product has not left Pharmacy s control. Products that were removed from the pharmacy for delivery by Pharmacy staff, by a Pharmacy-contracted delivery service, or by an approved common carrier and were not deliverable or were refused by the patient may be returned to stock provided that the product remains in the manufacturer s or Pharmacy s packaging, that the appearance of the product indicates integrity and stability has been maintained, and that Pharmacy staff evaluate product to ensure no adulteration or misbranding has occurred. Products that have left Pharmacy control and are returned as part of an established prescription drug repository program may be accepted and subsequently dispensed only according to applicable state regulations, must be maintained in a separate physical inventory, and may not be used to fulfill claims made to NPS. Pharmacy will inform NPS within 14 days of the removal of prescription records from Pharmacy s custody by an authorized Federal, State, or local agency. Upon request, a receipt provided by the agency removing records and/or the name of and phone number of the agent removing the records shall be furnished to NPS Pharmacy Audit Department. Pharmacy will dispense Food and Drug Administration (FDA) approved generic equivalent drugs whenever possible and in accordance with Federal and State laws. Please maximize generic substitution, so that the patient is not charged the difference plus his or her copayment. The lowest copayment is applicable when a generic is dispensed. Contact the prescriber if necessary in order to dispense a generic equivalent drug. Certain drugs with documented dosing problems should not be dispensed generically unless requested by the prescriber. Pharmacy must clarify ambiguous dosage directions prior to dispensing. A use as directed sig should not be assigned an arbitrary days supply. Pharmacy must document in a retrievable document the clarification of the dosage and directions for use used to accurately calculate days supply for the medication. The quantity submitted must reflect the exact quantity dispensed, including metric decimal amounts. All professional services provided by Pharmacy must be rendered only under the direct supervision of a licensed pharmacist, and each prescription must be dispensed in accordance with a lawful prescriber s directions, the terms and conditions contained in Pharmacy s Agreement with NPS and/or communicated via the NPS system, and applicable State and Federal laws. Pharmacy will abide by all applicable Federal, State, and local governmental patient disclosure requirements concerning payment for services, including cognitive services, fees, and rebate programs. Pharmacy will provide Covered Services in compliance with Pharmacy s Agreement with NPS for all eligible persons of all Sponsors to which Pharmacy s Agreement with NPS applies; and will not discriminate in the provision of services, including compounded prescriptions, with respect to any Sponsor(s) or eligible person(s), regardless of the eligible person s right to reimbursement, amount of copayment/coinsurance, or other plan or program terms. Pharmacy must fully cooperate with NPS with prompt reply to any quality assurance issue pertaining to the delivery of Covered Services by the Pharmacy. Pharmacy shall follow all applicable formal procedures for quality assurance programs as may be mandated by state law. If there are no such state law mandates, Pharmacy shall follow the formal procedures for preventing and handling prescription errors as submitted by Pharmacy in its Application to participate in the Network. Professional Judgment Pharmacy is obligated to provide the patients and prescribers whom it serves with an adequate inventory of quality drugs. The pharmacist is by profession uniquely qualified to judge the integrity and the quality of manufactured sources. Where a prescription is written in such a manner that the pharmacy is provided an option with respect to brand name, manufacturing source, or package size of the drug to be supplied, pharmacy will supply and charge for that drug that meets official compendium specifications, if listed therein; that has the lowest ingredient cost; that in the pharmacist s professional judgment fulfills the prescriber s requirements; and that meets formulary requirements. Subject to the pharmacist s professional judgment and availability, pharmacy will dispense an AB-rated generic when dispensing a generic drug. Pharmacy will (i) stock a sufficient number of drugs distributed under their generic names consistent with the prescribing habits of the prescriber in pharmacy s community, communications via the NPS System, or the generic formulary of the State in which pharmacy is located, subject to the pharmacist s professional judgment as to the integrity and quality of the manufacturing source, and (ii) dispense a generic drug wherever possible in accordance with the applicable law or regulations. Pharmacy must clarify and document ambiguous dosage directions regarding utilization prior to dispensing and will not combine prescriber-authorized refills. Pharmacy will at all times exercise good professional judgment in the dispensing of medication and may refuse to dispense any prescription based on the dispensing pharmacist s own professional judgment. Indemnification All liability arising from the provision of drugs, products, and services by Pharmacy will be the sole responsibility of National Pharmaceutical Services Pharmacy Provider Manual 11

12 Pharmacy. NPS and Plan Sponsors will not be liable for and Pharmacy will indemnify, defend, and hold NPS and Plan Sponsors harmless from and against any claim, injury, damage, loss, expense (including reasonable attorney s fees), demand, or judgment in any way resulting from any acts or omissions by Pharmacy in the sale, compounding, dispensing, or use of any prescription drug dispensed by Pharmacy or the providing of any other services or products by Pharmacy. In no event and under no circumstances will NPS or Sponsors be liable to Pharmacy for indirect or consequential damages of any nature, loss of profit, punitive damages, injury to reputation, or loss of customers or business. Terms and conditions of Provider s Agreement with NPS, which by their nature should continue beyond the termination of Provider s Agreement with NPS, will survive the termination Controlled Substances A controlled substance prescription must be issued for a legitimate medical purpose by an individual practitioner acting in the usual course of his professional practice to be valid. Should a pharmacist knowingly fill a purported prescription not issued in the usual course of professional treatment, then that pharmacist is subject to penalties provided for violations relating to controlled substances. Whereas the prescribing practitioner may be held responsible for issuing a bogus controlled substance prescription, a corresponding responsibility and resulting criminal liability rests with the pharmacist who fills such a prescription. Tips for Detecting Forged Prescriptions The following may indicated prescriptions were not issued for a legitimate medical purpose: The prescriber writes significantly more prescriptions (or in larger quantities), compared with other practitioners in the area. The patient appears to be returning too frequently. A prescription, which should last for a month in legitimate use, is being refilled much sooner than the days supply dispensed. The prescriber writes prescriptions for or drug abusers often request antagonistic drugs, such as depressants and stimulants, at the same time. The patient appears presenting prescriptions written in the names of other people. A number of people appear simultaneously, or within a short time, all bearing similar prescriptions from the same physician. Numerous people who are not regular patrons or residents of your community suddenly show up with prescriptions from the same physician. Characteristics of Forged Prescriptions The prescription looks too good; the prescriber s handwriting is too legible. Quantities, directions, or dosages differ from usual medical usage. The prescription does not comply with the acceptable standard abbreviations or appears to be a textbook presentation. The prescription appears to be photocopied. Directions are written in full with no abbreviations. The prescription is written in different-colored inks or written in different handwriting. Schedule II, III, IV, and V Prescription Requirements Insertion of Corrected or Missing Information A pharmacist may add or change the following items on a controlled substance prescription, provided that he or she has received authorization from the prescriber: Dosage form Drug strength Drug quantity Directions for use Issue date Even with the proper authorization, however, documenting his or her actions is imperative for the pharmacist. The pharmacist is permitted to make information additions that the patient or bearer provides, such as the patient's address, but such additions should be verified. The pharmacist is never permitted to make changes to: Patient name The medication prescribed (except for generic substitution permitted by state law) The prescriber s signature Emergency Oral Schedule II Prescriptions An emergency situation can permit the dispensing of a Schedule II drug without meeting the general requirement of a written prescription. An emergency situation is defined as a situation in which: 1) Immediate administration of the controlled substance is necessary for the proper treatment of the patient. 2) No appropriate alternative treatment is available. 3) Provision of a written prescription to the pharmacist prior to dispensing is not reasonably possible for the prescribing physician. In order to comply with the provisions permitting the pharmacist to fill an oral Schedule II emergency prescription, the pharmacist must meet the following requirements: National Pharmaceutical Services Pharmacy Provider Manual 12

13 The quantity prescribed and dispensed is limited to the amount adequate to treat the patient during the emergency period (dispensing beyond the emergency period must be pursuant to a written prescription signed by the prescribing individual practitioner). The prescription shall be immediately reduced to writing by the pharmacist and shall contain all information required for a valid controlled prescription, except for the signature of the prescribing individual practitioner. If the prescribing individual practitioner is not known to the pharmacist, he or she must make a reasonable effort to determine that the oral authorization came from a registered individual practitioner, which may include a callback to the prescribing individual practitioner using his or her phone number as listed in the telephone directory and/or other good-faith efforts to ensure identity. Within 7 days after authorizing an emergency oral prescription, the prescribing individual practitioner shall cause a written prescription for the emergency quantity prescribed to be delivered to the dispensing pharmacist. The prescription shall have written on its face Authorization for Emergency Dispensing and the date of the oral order. The written prescription may be delivered to the pharmacist in person or by mail, but if delivered by mail it must be postmarked within the 7-day period. Upon receipt, the dispensing pharmacist shall attach this prescription to the oral emergency prescription which had earlier been reduced to writing. The pharmacist shall notify the nearest office of the DEA if the prescribing individual fails to deliver a written prescription; failure of the pharmacist to do so shall void the authority conferred by this paragraph to dispense without a written prescription of a prescribing individual practitioner. Central-fill pharmacies shall not be authorized to prepare prescriptions for a controlled substance listed in Schedule II on receiving an oral authorization from a retail pharmacist or an individual practitioner. Partial Filling of Schedule II Prescriptions The partial filling of a prescription for a controlled substance listed in Schedule II is permissible, if the pharmacist is unable to supply the full quantity called for in a written or emergency oral prescription, and if he or she makes a notation of the quantity supplied on the face of the written prescription (or written record of the emergency oral prescription). The remaining portion of the prescription may be filled within 72 hours of the first partial filling; however, if the remaining portion is not or cannot be filled within the 72-hour period, the pharmacist shall so notify the prescribing individual practitioner. No further quantity may be supplied beyond 72 hours without a new prescription. Partial Filling of Schedule II Prescriptions for Long Term Care Facility (LTCF) Residents A prescription for a Schedule II controlled substance written for a patient in an LTCF or for a patient with a medical diagnosis documenting a terminal illness may be filled in partial quantities to include individual dosage units. If any question exists as to whether a patient may be classified as having a terminal illness, the pharmacist must contact the practitioner prior to partially filling the prescription. Both the pharmacist and the prescribing practitioner have a corresponding responsibility to ensure that the controlled substance is for a terminally ill patient. The pharmacist must record on the prescription whether the patient is "terminally ill" or an "LTCF patient." A prescription that is partially filled and does not contain the notation "terminally ill" or "LTCF patient" shall be deemed to have been filled in violation of the Code of Federal Regulations, 21 CFR Section Partial Filling of Prescriptions. For each partial filling, the dispensing pharmacist shall record on the back of the prescription (or on another appropriate record, uniformly maintained, and readily retrievable) the date of the partial filling, quantity dispensed, remaining quantity authorized to be dispensed, and the identification of the dispensing pharmacist. The total quantity of Schedule II controlled substances dispensed in all partial fillings must not exceed the total quantity prescribed. Schedule II prescriptions for patients in an LTCF or for patients with a medical diagnosis documenting a terminal illness shall be valid for a period not to exceed 60 days from the issue date unless terminated sooner by the discontinuance of medication. Information pertaining to current Schedule II prescriptions for patients in an LTCF or for patients with a medical diagnosis documenting a terminal illness may be maintained in a computerized system if this system has the capability to permit: 1) Output (display or printout) of the original prescription number, date of issue, identification of prescribing individual practitioner, identification of patient, address of the LTCF or address of the hospital or residence of the patient, identification of medication authorized (including dosage, form, strength and quantity), listing of the partial fills that have been dispensed under reach prescription and the information required in 21 CFR Section (b). 2) Immediate (real time) updating of the prescription record each time a partial fill of the prescription is conducted. 3) Retrieval of partially filled Schedule II prescription information is the same as required by 21 CFR Section (b)(4) and (5) for Schedule III and IV prescription refill information. Before submitting a claim, it is important to review and verify that all information is complete and accurate to ensure compliance with Medicare Part D auditing requirements and guidelines set forth by CMS. National Pharmaceutical Services Pharmacy Provider Manual 13

14 Quantity dispensed in the claim should match the amount actually dispensed by the pharmacy, and such quantity is supported by records retained at the pharmacy. Days supply submitted in the claim should match actual amount dispensed based upon prescriber s directions written on the prescription. The DAW code should match the prescriber s written instructions as documented on the prescription. The prescriber identifier number reported on the claim should match the prescriber information on the prescription maintained by the pharmacy. The fill number reported on the claim should match the number of refills/partial refills associated with the prescription as documented in records maintained at the pharmacy. The prescription origin code should match the actual method by which the prescription was received by the pharmacy (written, fax, telephone, or electronic). The prescription number in the claim should match the prescription number assigned to the prescription by the pharmacy. Pre or Postdating Schedule II Prescriptions A prescription that is pre-or postdated refers to the fact that the prescription was either (1) written and signed on a different date than when issued or (2) written on the same day as issuance with instructions such as "do not fill until a later date. The refilling of a prescription for a controlled substance listed in Schedule II is prohibited however, as define in Title 21, , an individual practitioner may issue multiple prescriptions authorizing the patient to receive a total of up to a 90-day supply of a Schedule II controlled substance provided the following conditions are met: 1) The individual practitioner properly determines there is a legitimate medical purpose for the patient to be prescribed that controlled substance and the individual practitioner is acting in the usual course of professional practice; 2) The individual practitioner writes instructions on each prescription (other than the first prescription, if the prescribing practitioner intends for that prescription to be filled immediately) indicating the earliest date on which a pharmacy may fill the prescription; 3) The individual practitioner concludes that providing the patient with multiple prescriptions in this manner does not create an undue risk of diversion or abuse; 4) The issuance of multiple prescriptions as described in this section is permissible under the applicable state laws; and 5) The individual practitioner complies fully with all other applicable requirements under the act and these regulations as well as any additional requirements under state law. Partial Filling of Schedule III, IV, and V Prescriptions The partial filling of a prescription for a controlled substance listed in Schedule III, IV, and V is permissible provided that: Each partial filling is recorded in the same manner as a refilling. The total quantity dispensed in all partial fillings does not exceed the total quantity prescribed. No dispensing occurs after 6 months following the date on which the prescription was issued. Controlled Substance Prescribing Authority Per State and Federal regulations, pharmacies must validate the prescriber DEA schedule for controlled substances. CMS and the Office of Inspector General (OIG) have indicated a growing concern about whether prescribers have appropriate prescribing authority to write for controlled substances. Claims for controlled substances in which the Prescriber s registered DEA schedule does not match the Drug s DEA schedule will be rejected at the point of sale. Missing or Invalid Prescriber NPI Effective January 1, 2013, CMS will require an active, valid Prescriber NPI on all Medicare Part D claims. If another prescriber identifier such as the DEA is submitted, NPS will attempt to check its validity. If the submitted prescriber identifier is invalid, inactive or missing, the claim will reject with the following NCPDP Reject Codes: Reject Code EZ 42 Description M/I Prescriber ID Qualifier Plan s Prescriber database indicates the Prescriber ID Submitted is inactive or is not found If the pharmacy believes a prescriber ID is active and valid but the claim is rejected, please reprocess the claim with Submission Clarification Code (SCC) 42 (Prescriber ID Submitted has been validate, is active) in field 420-DK. The claim will then return the approved message code 10 (Submitted Prescriber ID is not found or is inactive or expiredflagged for Retrospective Review) in field 548-6F. If the prescriber s registered DEA schedule is inappropriate for the drug prescribed, the claim will reject with one of the NCPDP reject codes listed in the table below: National Pharmaceutical Services Pharmacy Provider Manual 14

15 Reject Code Description 43 For prescriber ID submitted, associated prescriber DEA Renewed, or In Progress, DEA Authorized Prescriptive Right 44 For prescriber ID submitted, associated prescriber DEA recently licensed ore reactivated 46 For prescriber ID submitted, and associated prescriber DEA, the DEA has authorized prescriptive right for this drug DEA class If you believe the prescriber s DEA schedule is appropriate for the drug prescribed, you may resubmit the claim using one of the following NCPDP Submission Clarification Codes (SCCs) in field 420-DK: Reject Code Description 43 For prescriber ID submitted, associated prescriber DEA Renewed, or In Progress, DEA Authorized Prescriptive Right 44 For prescriber ID submitted, associated prescriber DEA recently licensed ore reactivated 46 For prescriber ID submitted, and associated prescriber DEA, the DEA has authorized prescriptive right for this drug DEA class Claims submitted with SCC 43, 44, 46 will communicate the following approved NCPDP message codes in field 548-6F of the Claim Response: 21- For the Submitted Prescriber ID, the Associated DEA Number is Inactive Flagged for Retrospective Review. The claim paid for a controlled substance however, an active DEA number could not be found within NPS s system using the combination of Prescriber ID qualifier (466-EZ) and Prescriber ID (411-DB) provided on the transaction. 22- For the submitted Prescriber ID, the associated DEA number does not allow this drug DEA schedule Flagged for Retrospective Review. Note: NPS will review claims submitted using SCC 43, 44, and 46 and notify pharmacies in the event the DEA schedule or prescriber ID cannot be validated. Claims not passing prescriber ID validation and/or DEA validation may result in notifications, warnings, claims corrections or reversals. The intent of NPS is to improve the quality of prescriber IDs on Medicare Part D claims without prohibiting beneficiaries access to drugs. Every attempt should be made to obtain the correct Prescriber ID without causing disruption for the member. NPS will contact all pharmacies within 24 hours for all claims rejected with EZ or 42 without an SCC of 42 or other subsequent fill Tamper Resistant Prescription Pad Federal funds to State Medicaid programs require that the tamper-resistant prescription pads be used when prescribing medications, unless the prescription is: a) Faxed to the Network pharmacy b) Emergency fill of any amount up to the full prescription amounts and the prescribing provider submits a compliant tamper-resistant prescription within 72 hours c) E-Prescriptions d) Phone-in Prescriptions e) When a managed care entity pays for the prescription 1.12 Drug Supply Chain Security Act The Drug Supply Chain Security Act (DSCSA) outlines critical steps to build an electronic, interoperable system by November 27, 2023, which will identify and trace certain prescription drugs as they are distributed within the United States. This system will enhance the FDA s ability to help protect U.S. consumers by improving detection and removal of potentially dangerous products from the pharmaceutical distribution supply chain. Starting in 2015, trading partners (manufacturers, wholesale distributors, dispensers and repackagers) are required under the Food Drug & Cosmetic Act to provide the subsequent purchaser with product tracing information when engaging in transactions involving certain prescription drugs. Trading partners are also required to capture the product tracing information and maintain the applicable information for not less than 6 years after the date of the transaction. The FDA recognizes some dispensers may need additional time beyond July 1, 2015, to ensure that the product tracing information required is captured and maintained by dispensers and does not intend to take action against dispensers who, prior to November 1, 2015, accept ownership of product without receiving the product tracing information. This compliance policy does not extend to the requirements that other trading partners (manufacturers, wholesale distributors, and repackagers) provide product tracing information to dispensers. Pharmacies must be compliant with the following elements to meet the DSCSA requirements (see next page): National Pharmaceutical Services Pharmacy Provider Manual 15

16 Authorized Trading Partner Verification (effective 1/1/15) Verify trading partners have a valid licensure and/or registration per federal and/or state law. Suspect/Illegitimate Product Identification and Notification (effective 1/1/15) Identify suspect product currently in inventory and as new product is received. Inform trading partners with regard to identification of suspect product. Quarantine suspect products from the regular inventory until the product is either cleared to be dispensed or removed from the supply chain. Promptly conduct an investigation, in coordination with other trading partners, to determine whether a suspect product is an illegitimate product. Remove, or assist in removing, illegitimate product from the supply chain. Notify FDA and all immediate trading partners within 24 hours after making determination that product is illegitimate. Transaction Data (effective July 1, 2015) Only accept product if the previous owner provides the "3Ts" (Transaction History, Transaction Information, and a Transaction Statement). If selling or loaning product, provide the subsequent owner with the 3Ts. Does not include sales to patients or sales between pharmacies if those sales are for a specific patient need. Trading partners, including pharmacists, capture and maintain the 3Ts for 6 years from date of transaction. National Pharmaceutical Services Pharmacy Provider Manual 16

17 Claims Processing 2.1 Claim Pricing and Reimbursement Pricing Definitions Average Wholesale Price (AWP) - Average Wholesale Price or AWP means the average wholesale price of a Prescription Drug Service at the time a claim is processed as established in the NPS price file and updated no less than weekly by Medi- Span. Dispensing Fee - The term Dispensing Fee shall mean the amount, other than the Average Whole Price minus a discount and any applicable incentives determined by NPS as compensation to the pharmacy for providing Covered Services. Maximum Allowable Cost (MAC) - The amount delineating the maximum per unit reimbursement as established and solely determined by NPS for a multiple source prescription drug, medical product or device at the time a claim is processed. The MAC is subject to review and modification by NPS in its sole discretion. Usual and Customary (U&C) - The lowest price Pharmacy would charge to a particular customer if such customer were paying cash for the identical Prescription Drug Services on the date dispensed. This includes any applicable discounts including, but not limited to, senior discounts, frequent shopper discounts and other special discounts offered to attract customers. A pharmacy cannot have a U&C for prescription drug programs that differs from either cash customers or other third-party programs. Pharmacy must submit the accurate U&C Charge with respect to all claims for Prescription Drug Services. Reimbursement and MAC Pharmacy will be reimbursed for Covered Services based on the lesser of the Pharmacy s U&C, MAC or Ingredient Cost plus a Dispensing Fee less the Participant s copayment, coinsurance or deductible. NPS uses the following compendia and sources for information and research related to the MAC program: a) Medi-Span s National Drug Database Files with sources of information on AWP, updated on a business day basis b) Medi-Span s State Drug MAC Files SMAC c) Medi-Span s Reported WAC costs for drug products. d) Listing of Federal Multiple Source Drug Limits FUL as published and available from the CMS website at e) Actual Retail Pharmacy Acquisition Costs from Major Drug Wholesales. Prices are researched using wholesale information (prices and availability). At least three National wholesaler conducting business nationwide are utilized to ensure multiple sources are available. f) Actual Retail Pharmacy Acquisition Costs from major Generic Drug Distributors. g) Average Actual Acquisition Cost Lists as available from Myers & Stauffer Medi-Span AWP is used to calculate MAC rates. NPS reserves the right to change any pricing source at any time. Please note, the submission of a paid claim is NOT required to obtain MAC pricing information. Pharmacies may submit a MAC Pricing Request through the Network Pharmacy Resources portal on the NPS web site. Pharmacies must register for access to the portal as described in Section MAC prices are available instantly upon submission of the form. MAC pricing information is the confidential and proprietary information of NPS. Pricing information is accurate as of the response date and is subject to change. By submitting this MAC pricing request, you agree to maintain the confidentiality of the information provided and refrain from transferring, disclosing, sharing and/or discussing the information with any third party without our prior written consent. You further authorize that the unauthorized disclosure of MAC list pricing may subject your pharmacy to immediate termination from the pharmacy network. NPS will deduct Participant copayments, coinsurances, and deductibles from Pharmacy reimbursement. Pharmacy is contractually obligated to collect the full amount of the Participant s copayment, coinsurance or deductible as determined by the Online System. Copayments, coinsurances and deductibles are not eligible to be discounted or excused/waived other than as permitted by CMS regulations. Initial attempt to collect copay must be made within 30 days of dispensed date. Prescription information sheets, medication guides or other paper handouts that come with medications and merely reference applicable copays and insurance cost sharing, are not sufficient evidence of attempted copay collection. Pharmacy may not charge Participants a copay, coinsurance, or deductible in excess of that set by the plan. Pharmacy may not collect copayments, coinsurances and deductibles in excess of Pharmacy s U&C. National Pharmaceutical Services Pharmacy Provider Manual 17

18 Pharmacy may not bill dually eligible individuals in the Qualified Medicare Beneficiary Program for Medicare costsharing, regardless of whether the State reimburses providers for the full Medicare cost-sharing amounts. NPS s MAC Appeal Process Pharmacies may complete a MAC Appeal Form and submit it to MAC@pti-nps.com or may register on our website to submit a MAC appeal. Please refer to the Appendix for an example of the MAC Appeal Form. Criteria for a MAC Review Request: 1. Claim was paid based on MAC pricing. 2. Total paid (NPS payment plus patient copay plus dispensing fee) must be less than the acquisition cost. Documentation required for MAC Review 1. Claim Information: Rx number, NCPDP number and pharmacy name, Rx date, drug name, and drug NDC. 2. Contact name and contact information for individual appealing. 3. May be requested - Copy of invoice for specific NDC you are requesting to be reviewed. If MAC appeals are being sent by Chains, Third party networks, or Affiliations, it is expected that they will be screened PRIOR to being forwarded to NPS. Claims reimbursed at contracted rates based on AWP discounts, usual and customary or ingredient costs submitted by the pharmacies do NOT qualify for MAC review unless it is suspected that our claims adjudication system processed incorrectly. Requests for MAC reviews can be submitted to the NPS Help Desk Center by contacting Appeals made without documentation (invoices) of acquisition cost are less likely to be approved for pricing changes especially in cases where the only data available supports NPS s current position. NPS reserves the right to classify medications as generics, provided the medications meet certain criteria. It is the pharmacy s responsibility to collect applicable sales and use taxes (imposed at the county, city, township or business district level) of a covered drug. If permitted by the terms of NPS s contract with the Plan Sponsor, NPS will bill the Plan Sponsor or member for applicable sales and use taxes of a covered drug to a member at the point-of-sale and will remit to the Pharmacy any taxes collected from the Plan Sponsor. Pharmacies are to remit any such taxes to the appropriate taxing authority MAC Invoice Retention Required for Authentication of Drugs Bought From Reliable Source Wholesalers and manufacturers invoices must be maintained for 2 years. To substantiate that the drugs dispensed were purchased from an authorized source, NPS may request that the pharmacy give authorization to the wholesaler or manufacturer to release invoices for purchase verification. The pharmacy must promptly comply with such requests. If the pharmacy fails to provide authorization NPS has the right to charge back 100 percent of the amount paid for any claims in question DAW Codes In States that have dual signature lines, signature on line stating DAW will not be accepted. Prescriber must write Brand Medically Necessary on hard copy. NPS will not accept signature on the DAW line as valid documentation. DAW Codes NPS recognizes the Standard NCPDP Codes: 0 = No product selection indicated 1 = Substitution not allowed by prescriber 2 = Substitution allowed - patient requested product dispensed 3 = Substitution allowed - pharmacist selected product dispensed 4 = Substitution allowed - generic drug not in stock 5 = Substitution allowed - brand drug dispensed as a generic 6 = Override 7 = Substitution not allowed - brand drug mandated by law 8 = Substitution allowed - generic drug not available in marketplace 9 = Other Submission of DAW 0 should be utilized when dispensing a prescribed generic drug. Additionally, single-source brands should be submitted with a DAW 0. Plans mandate that generic pricing is applied when DAW 0 is submitted for a multisource brand medication. DAW 1 should be submitted when the prescriber has indicated only the brand-name drug may be dispensed, and is documented on the hard-copy prescription. For telephone orders, the DAW brand only, no generic substitution per prescriber must be documented accordingly on the hard copy. Pharmacy software should never default to DAW 1. DAW 2 should be submitted when the member requests the brand drug and the pharmacy should document the hard copy accordingly. Patient requested brands may impact the copayment/co-insurance to the patient. DAW 3 should be submitted when the prescriber indicates that a generic substitution is permitted and the pharmacist determines that a brand-name medication should be dispensed. Certain plans may mandate that generic pricing be applied when DAW 3 is cited for a multi-source brand medication. National Pharmaceutical Services Pharmacy Provider Manual 18

19 DAW 4 should be reserved for situations in which generic substitution is permitted and the brand product is dispensed since a generic is not stocked by the pharmacy. Certain plans may mandate that generic pricing be applied in these situations as it exists due to the buying habits of the pharmacy and not due to availability issues with the generic product. DAW 5 should be submitted when the prescriber has indicated a generic substitution is permitted, and the pharmacist utilizes a brand-name drug as a generic entity. Certain plans may mandate that generic pricing or a generic copayment be applied when DAW 5 is cited for a multi-source medication. DAW 6 NCPDP-override code has no meaningful application by NPS. Certain plans may mandate that generic pricing be applied when DAW 6 is cited for a multisource brand medication. DAW 7 is reserved for use when the prescriber has indicated that generic substitution is permitted, however prevailing law or regulation prohibits the substitution of a brand product even though the generic versions of the product are available. DAW 8 is utilized when the generic product is not currently manufactured, distributed, or temporarily unavailable. DAW 9 Reserved with no meaningful application by NPS. Certain plans may mandate that generic pricing be applied when DAW 9 is cited for a multisource brand medication. Individual plan Sponsors do dictate which DAW codes are allowed and the associated payment parameters on each specific plan parameters. DAW codes other than 0 must be annotated on the prescription hardcopy along with the reason for use of the DAW code. Incorrectly submitted prescription claims or claims lacking the proper DAW documentation may result in charge back. Failure to submit appropriate DAW-coded claims may result in the removal from the network Definition of Maintenance Drugs Some benefit plans may allow for extended days supply dispensing of maintenance medications. A maintenance drug is a drug ordered on a regular, ongoing, scheduled basis. Criteria for a Maintenance Medication: 1. A medication that does not exceed 60 or 90 days in supply is considered a maintenance drug. 2. The drug has a low probability for dosage or therapy changes due to side effects, serum drug concentration monitoring, or therapeutic response over a course of prolonged therapy. Therefore, it is cost-effective to dispense the drug in quantities greater than the standard 30 days supply. 3. The drug s most common use is to treat a chronic disease state. A drug may have an indication for maintenance therapy but lacks the maintenance drug code if that indication is not the most common use of the drug. 4. Therapy with the drug is not considered curative or promoting of recovery. 5. The drug is administered continuously rather than intermittently Bulk Chemicals and Part D Bulk chemicals are not covered under Medicare Part D because they are not prescription drug products that are approved under sections 505, 505(j) or 507 of the Federal Food Drug and Cosmetic Act Generic Drug Standards Health professionals and consumers can be assured that the FDA-approved generic drugs meet the same rigid standards as the brand-name drugs. To gain FDA approval, a generic drug must: Contain the same active ingredients as the brand-name drug Be identical in strength, dosage form and route of administration Have the same use indications Be bioequivalent to the referenced brand Meet the same batch requirements for identity, strength, purity, and quality Be manufactured under the same strict standards of the FDA s good manufacturing practice regulations required for brand-name products Pricing of 340(b) Drugs NPS requires all claims processed for 340(b) drugs to be identified as such per NCPDP guidelines. To indicate this, Pharmacy should submit claims for 340(b) drugs using a submission clarification code (420-DK) value of 20. Claims submitted for non-covered entities or for inappropriate reimbursement to manufacturers under the 340(b) program are subject to claim reversal and recoupment. 2.2 Point of Sale Electronic Claim Submission All prescriptions filled for NPS members must be submitted to NPS regardless of adjudication status. This includes prescriptions for members in which no reimbursement from the plan is due to the pharmacy. NPS performs drug utilization review for all members. All prescriptions filled for National Pharmaceutical Services Pharmacy Provider Manual 19

20 NPS members must be submitted to NPS regardless of the review to have maximum benefit impact (i.e., TrOOP accumulation); all prescriptions filled for members must be available. All submission should be through an online point of sale (POS) system compatible with NCPDP Version D.0. Medicare Part D claims must be submitted within 90 days of the fill date; for exceptions applicable to long-term care pharmacy, see Section 8.9. POS System means the online or real time telecommunication system used to communicate information regarding covered drugs, eligible members, claims, drug utilization, co-pays, and/or other amounts to be collected from an eligible member by the pharmacy and the amounts payable to the pharmacy. Pharmacy Vendor and POS System: Point-of-sale claims can be submitted to NPS through a pharmacy computer system or POS System. Please contact your pharmacy system or POS System vendor if you have any questions about how to submit claims. More information can also be obtained at Troubleshooting: If your pharmacy system or POS System is unable to make a connection with the claim processor s computer system, contact your communication network vendor or switch vendor. If you have any questions regarding a rejected claim or reimbursement please contact the Member Services Department ( ). Please have your NCPDP number and other relevant claims processing information. Online System Downtime Transmission Procedures: In the rare instance that the Online System is inoperable, the Pharmacy should attempt to resubmit the claim at a later date, but within 30 days of the fill date. Circumstances, however, may arise which will prevent prescription drug claims from being transmitted through the on-line claims processing system. It will still be necessary to provide prescription services to customers during such times. It is expected that pharmacies will use data available in their computer systems to assist in making appropriate decisions about dispensing a prescription when the on-line claims processing system cannot be accessed. Pharmacists should offer to fill the prescription for a minimal quantity of drug and offer refunds once the entire prescription can be electronically processed through the on-line claims processing system. Alternatively Pharmacy may also submit manual claims to NPS for processing in these rare cases as well. This may be necessary in situations where customers have limited funds and need medication. Professional judgment is highly encouraged. Drug Data: It is the Pharmacy s obligation to submit claims using accurate drug information, including the NDC of the package size used, quantity, prescriber directions, and days supply of the product dispensed. When submitting a claim, the NDC number of the package size dispensed or the package size used should be transmitted on the claim. Pharmacy must dispense from the most cost-effective NDC with the lowest net cost to the member and plan, when appropriate Prescription Origin Code The Origin Code is a value submitted with the prescription by the pharmacy to the processor. This value indicates how the pharmacy received the script from the prescribing physician. NCPDP Field 419-DJ Segment & Field Name Claim Segment: Prescription Origin Code 403-D3 Claim Segment: Fill Number Required for Original Fill Medicare Part D Transactions 1 - Written 2 - Telephone 3 - Electronic 4 - Facsimile 0 - Original dispensing In order to monitor progress of the implementation and usage of eprescribing, CMS is requiring that all pharmacies submit a valid Origin Code indicating the source for the prescription to the pharmacy; 0 - Unspecified is NOT an acceptable value to meet the CMS requirement. CMS believes that the migration to electronic prescribing has the potential to significantly reduce administrative inefficiencies and errors that are caused by a paper-based process. As a result of this requirement, NPS has built controls to enforce this during claims processing for all Medicare Part D prescription claims, Medicaid claims, and certain commercial plan s claims E-prescribing Pharmacies shall utilize NCPDP Field 419 DJ Prescription Origin Code for each claim submitted to NPS so that the source of origin for prescriptions can be identified and reported. Pharmacies shall support and comply with electronic prescription standards adopted by CMS as such final standards are effective with respect to Eligible Persons, and as such standards may be revised from time to time, including but not limited to: (i) NCPDP Script for communications concerning prescriptions or prescriptionrelated information between Member Pharmacy and prescribers; (ii) NCPDP Script 8.1 for communications concerning medication history between NPS, Pharmacies and prescribers and refill status between Pharmacies and prescribers; (iii) NCPDP Telecommunication Standard for communications concerning eligibility between NPS and Member Pharmacy; (iv) the prescriber s NPI; and (v) additionally, for electronic prescriptions of controlled substances, The Department of Justice, DEA s Electronic National Pharmaceutical Services Pharmacy Provider Manual 20

21 Prescriptions for Controlled Substances Final Rule, 75 FR (March 31, 2010). Without limiting the generality of the foregoing, in addition, Member Pharmacy shall ensure that all electronic prescription claims include Member Pharmacy s and the prescribers NPIs (if the prescriber s NPI is not available, another non-npi identifier such as the prescriber s DEA number or the prescriber s state license number, as permitted by state Law, must be included). NPS has contracted with SureScripts the e-prescribing vendor. SureScripts has helpful hints to ensure local providers know that your pharmacy has the capability to accept e- prescriptions that are available at Pharmacy Payor Sheet A payor sheet that lists each field in the POS claims transaction and the requirements for each field is available upon request by calling the NPS Help Desk. Please refer to this document if you are experiencing difficulty with point-ofsale transmissions Calculation of Quantity and Days Supply The pharmacy must submit the correct days supply, based upon directions for use, to avoid an audit chargeback. The pharmacy should submit the number of consecutive days the prescription drug will last. Overstating the days supply may affect future refills, while understating the days supply may exceed the Covered Person s benefit. The most common days-supply errors occur when dispensing inhalers, insulin, and medications with dosing limitations such as mefloquine, alendronate and medroxyprogesterone. The pharmacy is responsible for submitting the correct days supply. Example: Medroxyprogesterone is typically prescribed to be taken for 10 consecutive days per month. In this case, 30 tablets is equal to a 90-day supply. Example: Mefloquine is typically prescribed to be taken once per week. In this case, 7 tablets should be submitted as a 49- day supply. Prescriptions written for an entire family on one prescription form should be processed as separate claims for each Covered Person. Accurate Quantity The quantity dispensed must be entered exactly as written. Quantities should be submitted as metric quantity (including decimal points) using the NCPDP version D.0 compatible software. The pharmacy must enter the exact metric decimal quantity, no rounding up or down on claims. Failure to do so may result in a 100 percent charge back. Please refer to the Appendix on Common Days Supply Calculation Errors. Days Supply Exceeding Plan Allowable Limit For some medications, duration of therapy for the smallest available marketed package size (SAMPS) will exceed the plan s allowable limit. In such a case, Pharmacy should submit the number of consecutive days for the duration of therapy as long as plan benefit parameters allow. Example: Seasonale and Seasonique oral contraceptives are supplied in 91-day packages. In this case, 91 tablets should be submitted with a days supply of 91. Example: Boniva 3 mg/3 ml is administered as 1 injection every 6 months. In this case, 1 syringe should be submitted with a days supply of 180. If the claim rejects for days supply exceeding plan limit, Pharmacy should contact the NPS Help Desk for assistance As Directed and Prescriptions Missing or Without Directions Prescriptions indicated with as directed or missing directions must be clarified with the prescriber and/or member. The pharmacy must verify, document, and submit the appropriate quantity and days supply for the prescription claim. As directed and prescribed claims lacking instructional documentation or clarification may be subject to chargeback Refill Frequency NPS monitors the frequency of prescription refills. Prescription claims submitted with a reported days supply inconsistent with the quantity are subject to review. Prescriptions refilled at a too frequent interval, based upon days supply reported, will be rejected. When an emergency or an unusual circumstance occurs requiring that a prescription be refilled before the days supply reported with the last fill, the Pharmacy should contact NPS to review the Refill Too Soon rejection. Most prescriptions can be refilled after 75% of the days supply for the prescription is utilized. Certain medications may require that the member use 90% of the medication before another claim is allowed PRN and Days Supply Calculations The days supply submitted should correlate to the number of days the medication will last the patient when taken according to directions and in accordance with the actual medication specifications and the client-specific plan design limitations. Insulin- Prescription claims for insulin products must be submitted for each individually prescribed insulin or insulin product. If the directions are as directed, missing, or indicate a sliding scale, the pharmacy should verify the maximum number of units prescribed daily with the prescriber or member, and document accordingly on the prescription hard copy. Inhalers - Prescription claims for inhalers must be submitted with the appropriate metric decimal quantity per prescribed quantity and in accordance with the actual drug specifications and the client-specific plan design limitations. National Pharmaceutical Services Pharmacy Provider Manual 21

22 Ophthalmic Drops- Ophthalmic drop products should be calculated according to a standard of drops/ml or according to the actual drug specifications and in accordance with client-specific plan design limitations Durable Medical Equipment Prosthetics Orthotics and Supplies Durable medical equipment (DME) product distribution has been restricted by CMS to only be distributed by properly accredited pharmacies. As a result NPS has implemented POS controls to enforce this restriction. Products that fall into the DME category are designated and managed by NPS. DME Pharmacy Accreditation CMS issued guidance regarding Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) furnished by certain health care professionals and persons. The Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) required all DMEPOS suppliers to meet quality standards for Medicare accreditation. The accreditation requirement for pharmacies, as suppliers of Medicare items and services (including DME) must be granted by a CMS approved accreditation organization. If the group enforces the DMEPOS restriction and the pharmacy wants to process a DME product, it must have the proper accreditation. If the pharmacy has obtained this accreditation, it must provide this information to NPS. For more information on DME POS accreditation please visit S_DeemedAccreditationOrganizations.asp#TopOfPage. 2.3 Coordination of Benefits Claims Processing If a NPS member has other primary insurance, the pharmacy must bill the primary insurance first. Coordination of benefits (COB) is administered according to the member s benefit plan and in accordance with applicable statutes and regulations. NPS can accept secondary claims electronically. Bill NPS as a Secondary Insurer After filing an initial claim to the primary insurer, pharmacies should submit a secondary COB claim for the remaining unpaid copayment portion to NPS. The claim will fully adjudicate and NPS will pay the difference between what the primary insurer pays and up to what the health plan allows. The Other Payment field should reflect what the primary insurer paid on the claim. Pharmacy can denote other coverage in the transaction to NPS. Please use the following standard NCPDP standard codes for submitting secondary claims for NPS members in the NCPDP Other Coverage Code NCPDP Field 308-C8: ØØ=Not specified Ø1=No other coverage Ø2=Other coverage exists-payment collected Ø3=Other coverage exists- claim not covered Ø4=Other coverage exists-payment not collected Ø5=Managed care plan denial Ø6=Other coverage denied-not participating provider Ø7=Other coverage exists-not in effect on DOS Ø8=Claim is for billing Copay If any prior payment has been made, NPS will process the claim as a secondary payer claim. If there are unacceptable reject reasons from the prior payer, then the claim may also be rejected. Differences in Primary/Secondary Insurer Coverage Some drugs covered by the primary insurer may not be covered by NPS. In these instances, NPS will not issue any secondary payment. Required NCPDP COB Fields COB claims require Field 339-6C (Other Payer ID Qualifier), field 340-7C (Other Payer ID), and 443-E8 (Other Payer Date). Values 03 (BIN) and 05 (Medicare Carrier Number) are accepted in Field 340-7C (Other Payer ID). Field 342-HC (Other Payer Amount Paid Qualifier in the COB Segment, Value 10 = Sales Tax is an acceptable value for COB claims. 2.4 Best Available Evidence Claims Processing NPS will provide access to Part D drugs at the correct Low Income Subsidy (LIS) cost-sharing level when presented with evidence of LIS eligibility, even if NPS systems and CMS systems do not yet reflect that eligibility. NPS will accept and use best available evidence (BAE) to substantiate the beneficiary s correct LIS cost-sharing level and correct the cost-sharing level. NPS is required to accept any of the following forms of evidence to establish the subsidy status of a full benefit dual eligible beneficiary when provided by the beneficiary or the beneficiary s pharmacist, advocate, representative, family member or other individual acting on behalf of the beneficiary: A copy of the beneficiary s Medicaid card that includes the beneficiary s name and eligibility date during a month after June of the previous calendar year; A copy of a State document that confirms active Medicaid status during a month after June of the previous calendar year; A printout from the State electronic enrollment file showing Medicaid status during a month after June of the previous calendar year; National Pharmaceutical Services Pharmacy Provider Manual 22

23 A screen print from the State s Medicaid systems showing Medicaid status during a month after June of the previous calendar year; Other documentation provided by the State showing Medicaid status during a month after June of the previous calendar year; or For individuals who are not deemed eligible, but who apply and are found LIS eligible, a copy of the SSA award letter. To establish that the full benefit dual eligible individual is institutionalized and qualifies for a zero cost-sharing level, NPS must accept any one of the following forms of proof: A remittance from the facility showing Medicaid payment for a full calendar month for that individual during a month after June of the previous calendar year; A copy of a State document that confirms Medicaid payment on behalf of the individual to the facility for a full calendar month after June of the previous year; or A screen print from the State s Medicaid systems showing that individual s institutional status based on at least a full calendar month stay for Medicaid payment during a month after June of the previous calendar year. Under Title XIX of the Affordable Care Act, the elimination of Part D cost sharing applies to full-benefit dual-eligible individuals who would be institutionalized individuals, if they were not receiving home- and community-based services (HCBS). Part D sponsors must accept any of the following documents that may be used as best available evidence for demonstrating receipt of HCBS: A copy of a State-issued Notice of Action, Notice of Determination, or Notice of Enrollment that includes the beneficiary s name and HCBS eligibility date during a month after June of the previous calendar year; A copy of a State-approved HCBS Service Plan that includes the beneficiary s name and effective date beginning during a month after June of the previous calendar year; A copy of a State-issued prior authorization approval letter for HCBS that includes the beneficiary s name and effective date beginning during a month after June of the previous calendar year; Other documentation provided by the State showing HCBS eligibility status during a month after June of the previous calendar year. A beneficiary or the beneficiary s pharmacist, advocate, representative, family member or other individual acting on behalf of the beneficiary may submit new LIS information to NPS at BAEADJUST@PTI-NPS.com (retro LIS adjustments may also be submitted to this address) or by contacting the NPS Help Desk at Compound Processing Compound Prescription means a prescription where two or more medications are mixed together. One of these drugs must be a Federal Legend drug. Reconstitution or admixtures is not considered compounding per Martindale s. Pre-mixed infusion solutions cannot be billed as a compounded drug. Multi-ingredient compound claims that include National Drug Codes (NDCs) from the pre-mixed infusion solutions will deny. All network pharmacies are contractually obligated to submit compounded prescription claims online via the NPS system. Pharmacy will collect only the applicable copayment or coinsurance as indicated. Requirements for Compounded Prescription Claims The end product must not be available in an equivalent commercial form. A prescription will not be considered a compound prescription if it is reconstituted or if only water, alcohol, or sodium chloride solutions are added to the active ingredient. 1. The Compound drug must contain at least one Federal legend ingredient. A Federal legend drug by law is one that can be obtained only by prescription and bears the label Caution, Federal Law prohibits dispensing without a prescription, or Rx Only. 2. All legend products contained in the compound must have a valid NDC number. 3. NCPDP Partial Fill functionality is not allowed. 4. If one or more ingredients submitted in the compound is not covered, the claim will reject. 5. All compounds must have a minimum of 2 ingredients single-line compounds will not be accepted. 6. A maximum of 25 ingredients are allowed per compound prescription. 7. All Point of Sale (POS) edits apply to each NDC on the claim. Each claim will count toward the respective prescription fill limits, if applicable. 8. The NDC number of the most expensive legend ingredient must be submitted on the claim. 9. The quantity of the entire compound should be submitted. 10. The AWP for the entire compound s combined ingredients should be submitted. 11. The pharmacy should flag the claim as a compound drug in its system prior to adjudication. 12. Bioequivalent compounds of a manufactured product are not covered. 13. Sustained-release and extended-release compounds are not covered. 14. Syringes cannot be billed as a compound. National Pharmaceutical Services Pharmacy Provider Manual 23

24 15. Compounded capsules are covered only if a tablet or capsule commercial version of the drug is not available in the strength prescribed, and if the appropriate strength cannot be achieved using half or quarter tablets. 16. Compounded topical products are not covered when a product that contains the same combination of active ingredients in the same strengths is commercially available from a pharmaceutical manufacturer, regardless of the package size that is commercially available. 17. Compounded liquid oral drugs (e.g., solutions, suspensions, emulsions) are covered only for children and for aphagic adult recipients, and only when a commercial liquid version of the drug is not available. 18. Reimbursement for reasonable waste only includes associated volumes necessary in compounding the prescription which are not used within additional compound preparation. Coverage will not occur for the following: Compounds which include ingredients that are not approved for human use Sustained release products Medications requiring reconstitution prior to dispensing (e.g., commercially available powdered oral antibiotics, powder for injection antibiotics reconstituted with sterile water for oral consumption, topical acne preparations, etc.), are not recognized as compounded medications The following prescription types shall not be considered compounded prescriptions: Any prescription that includes finished products that contain the identical prescription ingredient and strength that is available commercially Any prescription that is sub-divided into unit dose Injectable prescriptions that are drawn into syringes for injection Any finished product that does not include a Federal Legend Drug as an ingredient The end product must not be available in commercial form or in therapeutic form Some compounded prescriptions may require a compound review. Please contact the NPS Help Desk to request authorization.. Be sure to have the following information available when you call: 1. NDC and quantity of each ingredient. 2. Reason for the compounded drug. Compound Processing Please refer to NPS Payor Sheets for required fields. Make sure to process compound claims using "multiple ingredient functionality." In the claim segment, enter " " as the Product ID and "00" as the Product ID Qualifier to identify the claim as a compound claim. In the compound segment, report the National Drug Code (NDC) and quantity for each ingredient detail Pharmacy has the ability to set their best price for this claim type to reflect their current cost to compound by placing the value in the U&C field. NPS accepts that value as the cost of that compound for that pharmacy making the product for our member (made to specific individual needs). The price that is charged may increase or decrease due to the cost submitted in the U&C field by the pharmacy that compounds medications. The pharmacy may choose to provide the compound at its previous price charged our member and will simply need to submit that price in the U&C field to reflect that choice. Therefore, prices may vary as the ingredient costs increase or decrease or the time component to make increases or decreases in cost and the U&C prices are populated by the Pharmacy solely and then accepted by NPS. Usual and Customary Charge (U&C): The lowest price the pharmacy would charge to a particular customer if such customer were paying cash for the identical prescription drug services on the date dispensed. This includes any applicable discounts including, but not limited to, senior discounts, frequent shopper discounts, and other special discounts offered to attract customers. A pharmacy cannot have a U&C charge for prescription drug programs that differs from either cash customers or other third-party programs. The pharmacy must submit the accurate U&C charge with respect to all claims for prescription drug services. Pharmacies are expected to observe applicable State and Federal laws, relevant US Pharmacopoeia (USP) Guidelines, professional standard, and FDA communications when preparing and dispensing compounded drugs. Evidence of unprofessional or unsafe compounding will be reported to the Applicable State Board of Pharmacy, the FDA, and/or may result in termination of the Pharmacy Agreement. The following types of compounded drugs are generally not covered by plan sponsors: Modified-release compounds Any compound that contains active ingredients not approved by the FDA A compound for which the stability is unknown at the time of dispensing or cannot be determined by the reference of an USP-approved reference material Compound components, methods of administration, or other criteria that do not satisfy the definition of a Part D drug (as applicable) Experimental/investigational items, product, and/or services National Pharmaceutical Services Pharmacy Provider Manual 24

25 Pharmacy may choose to accept payment for only the covered ingredients. Using the 419-DJ Submission Clarification Code 08=Process Compound for Approved Ingredients will provide reimbursement for only the approved ingredients. The pharmacy must flag the claim in the system. Do not include costs for labor, equipment, professional fees, or flavoring. Syringes cannot be billed as a compound. If the physician writes a prescription for a compounded prescription and the NDC number for a brand is submitted but the compound prescription does not contain the branded product, this will result in 100 percent charge back to the pharmacy and could result in the termination of the pharmacy from the network. For Medicare Part D Compounds, the following denotes Claims Submission Recommendations To determine if any drugs are not covered by Part D, the Pharmacy should initially bill without Submission Clarification Code (SCC) of 8. (A value 8 is resubmitted on a rejected compound prescription when the pharmacist decides to accept payment for all other ingredients, except those not covered by the plan.) If no drugs are covered by Part D, then coverage determination processes may be followed and Pharmacy should provide the beneficiary with the Notice of Medicare Coverage and Your Rights. If the Pharmacy chooses to accept reimbursement for covered ingredients, resubmit with SCC of 8. Part D Compound Claims submitted in NCPDP Version D.0 1. Only compounds that contain at least one ingredient that independently meets the definition of a Part D drug may be covered under Part D. If the compound contains at least one Part D drug and the pharmacy accepts reimbursement for only the covered Part D ingredients, the compound should be covered under Part D. Compound prescription claims must be submitted using the compound segment and will allow for the transition of up to 25 individual ingredients to be submitted. 2. If the Plan Sponsor accepts compounds under the benefit, sponsor can determine if all compounds are on or off formulary, or make a determination at an individual claim level. 3. If a compound is On-formulary, then all Part D ingredients are considered On-Formulary (even if the drug would be non-formulary as a single drug claim). 4. If a compound is Off-formulary, transition rules apply. Under transition all Part D ingredients in the compound must become payable as a result of that transition fill. If an exception is approved for an Off-Formulary compound, all Part D ingredients, but only Part D ingredients, are covered under the exception. Plans may contract to pay other components but may not charge cost sharing for non-part D ingredients (per CMS policy). 5. Compounds can only be covered under one Medicare benefit. (e.g. If a Compound contains at least one ingredient confirmed to be covered under Part B ingredient, the claim will be considered a Part B Compound and coverage will depend upon the Plan Sponsor.) If a compound contains an ingredient that might be covered under Part B (B vs. D determination) but needs further analysis (e.g. prior authorization, place of residence, diagnosis), the compound may be rejected. Compounds that contain at least one Part D ingredient will be covered under Part D. NOTE: Plan Sponsors may determine if they will/will not cover an enhanced drug or an OTC as part of a compound that are normally covered as a single drug claim. 6. Individual Part D sponsors determine which benefit copay or coinsurance applies to compounds. For LICS/Catastrophic Copay/Coinsurance cost-sharing for copays is defined by statute. 7. Multi-ingredient compound claims and reversals must be submitted as a single transaction. Compound claims included in a multi-script transaction will cause the multiclaim transaction to reject. 8. Multi-ingredient compound claims must be identified as a compound by submitting a Compound Code of 2 in the appropriate field. 9. Each ingredient in the compound must be submitted with the NDC of the product used. The quantity of each specific ingredient, the cost of each individual ingredient and the basis of cost determination must also be submitted. 10. It is important to submit the quantity dispensed to the member as the total metric quantity of the finished product (not a total of the individual ingredients). 11. Submit the sum of all individual ingredient costs, as the Pharmacy s Ingredient Cost Submitted for the compounded prescription and also submit the Pharmacy s U&C price for the compounded prescription. 2.6 Vaccine Processing 1. Pharmacies that are administering Part D vaccines, where allowed by State law, shall abide by all applicable State and Federal laws, regulations, and guidelines governing vaccine products and administration. 2. The terms and conditions relating to payment for the Prescription Drug Services including the vaccine administration fee are governed by the National Pharmaceutical Services Network Pharmacy Agreement. 3. Pharmacies must submit claims for the vaccine administration fee electronically (online), together with the related vaccine claim for payment as a single claim. National Pharmaceutical Services Pharmacy Provider Manual 25

26 4. Pharmacies may submit vaccine only claims if the beneficiary is going to have the vaccine administered by another healthcare provider. 5. Pharmacies will not be allowed to submit vaccine administration fee only claims without the immediate presence of a claim for a vaccine. If for some reason a pharmacy is submitting a claim for a vaccine administration only and a vaccine claim has not immediately preceded the claim in transaction processing, these claims will either need to be prior authorized or submitted manually for claims review. Manual claims should be sent to: Medicare Part D Paper Claims, PO Box 407, Boys Town, NE Beneficiaries may be responsible for a flat copay or a percent co-insurance depending upon the plan design. There will only be one patient copay charged for claims submitted with a vaccine and vaccine administration fee. If the plan has a percent co-insurance, the beneficiary liability will be inclusive of the administration fee and the vaccine. Separate copay or co-insurance amounts may apply if two claims are coming from two separate healthcare providers and the claims have not been coordinated in any manner. 7. Low income subsidy eligible individuals will always pay one copay for a vaccine and all related charges, even if the vaccine and its administration are billed separately. Pharmacy Claims Processing Requirements In order to submit vaccine and vaccine administration fee claims as one transaction, Pharmacy will need to utilize the DUR/PPS segment in the NCPDP Version D.0 Telecommunications Standard. These are standard fields in NCPDP. Any pharmacy that is having trouble accessing these fields should contact their software vendor for further clarification. INTEGRATED CLAIM WITH THE VACCINE AND ADMINISTRATION FEE IN ONE CLAIM Populate the NCPDP Telecommunications Standard Required Fields as per normal claims and also populate the following fields: Field Field Name Value to Populate 473-7E* DUR/PPS Code Counter* 440-E5* Professional Service Code* 438-E3* Incentive Fee Submitted* *Mandatory Field Additional Information 1 Must equal a value of 1 MA Submitted Administration Fee MA= Medication Administered VACCINE ADMINISTRATION FEE ONLY CLAIM Populate the NCPDP Telecommunications Standard Required Fields as per normal claims submission utilizing the following placeholder NDC to signify that the claim is for an administration fee only claim. Pharmacies may populate the days supply field with a 1 and the metric decimal quantity field with a 1. Pharmacies may also populate the DUR/PPS segment as noted below or leave it blank. Field Field Name 473-7E* 440- E5* 438- E3* DUR/PPS Code Counter* Professional Service Code* Incentive Fee Submitted* *Mandatory Field Value to Populate Additional Information 1 Must equal a value of 1 MA Submitted Administration Fee MA= Medication Administered Submitting Secondary Claims for Vaccine Administration (COB) When submitting secondary/tertiary claims when dispensing and administering a vaccine medication you are required to submit MA in the Professional Service Code Field in order for the appropriate reimbursement to occur. Pharmacy Claims Rejection and Error Handling If a valid Part D vaccine drug and Incentive Amount are submitted, but the Professional Service Code is not submitted, the following reject will occur. PROF SVC CODE REQD FOR VACCINE INC FEE o To correct this error, pharmacies will need to populate MA for Medication Administered in the Professional Service Code (NCPDP field ID 440-E5) field. If a valid Part D vaccine drug is submitted and the Incentive Amount submitted is zero or not submitted and the Professional Service Code of MA is populated, the following reject will occur: NON 0 VALUE REQD FOR VACCINE ADMIN o To correct this error, pharmacies will need to populate Incentive fee submitted field (NCPDP field ID 438- E3) with a valid Incentive fee amount versus a zero or blank amount. Unknown or Uncertain Vaccination Status Vaccination providers frequently encounter persons who do not have adequate documentation of vaccinations. With the exception of influenza vaccines and Pneumovax, providers should only accept written dated records as evidence of vaccination. In cases where vaccination status is uncertain, providers should conduct reasonable outreach in an effort to obtain this information. National Pharmaceutical Services Pharmacy Provider Manual 26

27 2.7 Paper Claims If Pharmacy has a situation that requires the submission of a paper claim, such as COB, and the Benefit Sponsors Benefit Plan allows for it, Pharmacy should submit the claim to NPS on a Universal Claim Form (UCF) only if the pharmacy is unable to process the claim electronically. Pharmacy will assume all risks including, but not limited to, eligibility, drug coverage, copayment, etc. for a paper claim. The submission window for paper claims varies within each group, for more information on the submission time line of paper claims call the NPS Help Desk at New versions of the NCPDP Telecommunication vd.0 Continuous Feed (PUCF- D02PT) and Laser Universal Claim Form (PUCF-D01PT) were implemented in 2013 due to changes required for Medicare Part D claim processing. Medicare Part D sponsors were required to submit additional fields based on the CMS notice dated October 1, 2012, referencing Revised Reporting Requirements for Prescriber Identifiers and Other Prescription Drug Event Fields. The following modifications were made: Designation of "Version /2013" in top right box. Pharmacy Service Type (147-U7) has been added. Patient Residence Code (384-4X) has been added. Submission Clarification Code (420-DK) box allows for the submission of three values. Quantity Prescribed (460-ET) has been added. Fields IDs have been renumbered to accommodate the additions. In addition, the following fields were added to support Long Term Care appropriate dispensing (short cycle): Special Packaging Indicator (429-DT) CMS Part D Qualified Facility (997-G2) The forms are copyrighted and cannot be printed/reproduced without appropriate licensing. Instructions for ordering Universal Claim Forms from NCPDP s vendor, CommuniForm, are online at All UCFs must be legible, accurate, and complete. Please type or neatly print all the UCF information. Claims and corrections to prior claims must be forwarded to NPS via firstclass mail. Claims information submitted in any manner other than the procedure described above may be subject to loss, processing delays, or rejection. To assure receipt by the proper department, the following address should be used when mailing claims information: NPS PO Box 407 Boys Town, NE Reversals Timing Prescriptions not dispensed to the member, or the member s authorized representative, within 14 calendar days must be reversed by the pharmacy at point-of-sale. Failure to abide by this practice may result in charge backs, additional financial penalties, and/or possible removal from the network. 2.9 Medicare E-1 Eligibility Query The E1 Eligibility Query is a transaction utilized by CMS to assist pharmacies in determining payer order for a given member when the information is not known. Members may not know their Medicare ID number or their coverage order. This transaction is specifically designed to assist pharmacist in these types of situations. It is in CMS interest to ensure that E1 transactions, and the data provided in the responses, are accessed and used appropriately. That is, the transactions are requested by a pharmacy for Medicare purposes and the data are used to support coordination of benefits. Coordination of benefits would include confirming payer order; therefore, E1 requests, for example, those used to permit States to coordinate benefits payable under Medicaid, are appropriate. Coupons (as defined in Section 2.15) are not considered prescription drug coverage. Thus, the E1 cannot be used for the purpose ruling out Medicare coverage in order to ensure that Coupon use would not violate the antikickback statute (Section 1128B(b) of the Social Security Act). E1 transactions are submitted to a CMS subcontractor, called the TrOOP facilitator, Relay Health. Additional information on E1 transaction can be found at: The TrOOP Facilitation contractor will accept NCPDP version D.0 E1 transactions. On that date, pharmacies will be able to submit Medicare Part D as well as Medicare Part A/B eligibility queries in either NCPDP format. Payor sheets and an explanation of the changes will be available on the TrOOP Facilitation website at 1) How will the new E1 matching logic affect the pharmacy? Under the new matching logic, a Cardholder ID with the Patient Last Name and at least the first character of the Patient First Name and the Patient Date of Birth are required in the E1 request to the TrOOP Facilitation contractor. Pharmacists MUST include at a minimum the following patient information in the E1 request for a match to occur: 1) Cardholder ID, which can be any one of the following: Medicare Part A/B ID Card Number; Nine-digit Social Security Number (SSN); Railroad Retirement Board (RRB) number; or Last four digits of the SSN; 2) Patient Last Name; National Pharmaceutical Services Pharmacy Provider Manual 27

28 3) At least the first character of the Patient First Name; 4) Patient Date of Birth. NOTE: If all required information is not provided, the E1 response will be Missing Required Field even if the submitted Cardholder ID information is correct. 2) How may a pharmacy increase the chances of successfully matching a patient? Submission of the most accurate data significantly increases the likelihood of receiving a successful match. Submitting the full SSN, HICN or Railroad Board Number as the Cardholder ID is the most direct method of matching a patient When submitting the last four digits of SSN as the Cardholder ID, the likelihood of a match increases as more information is provided including: Full Patient First Name Zip/Postal Code. 3) What fields are required and which ones are optional? You must always submit a cardholder ID populated with either the: Full SSN, HICN, or Railroad Board Number or The Last four digits of the SSN Field Name Cardholder ID Full Last Name Full First Name First Initial of First Name Date of Birth ZIP/Postal Code Required Fields Optional Fields When submitting the last four digits of the SSN as the cardholder ID, inclusion of the optional fields increases the chances for a match. 4) Will the E1 response be affected by the changes to the matching logic? No. The E1 will continue to return the following fields to the pharmacy for each Plan: Billing Order BIN PCN Group Cardholder ID Person Code Plan s Help Desk Telephone Number Patient s First and Last Name Patient s Birth Date Part D Plan s Contract ID Part D Plan s Plan Benefit Package (PBP) Number Effective and Termination Dates for Part D coverage (Dependent upon requested Date of Service) Relationship Code for Other Health Insurance (OH I) Coverage Low Income Cost Sharing (LICS) Indicator (Yes or No) 5) Do the changes to the matching logic affect the E1 functionality? No. The E1 functionality will remain unchanged. Pharmacies will continue to be able to enter a date in the E1 request to identify Plan enrollment information within 90 days of the date the request is submitted, providing past, current and prospective enrollment information. Additionally, the response information currently provided will continue without change. 6) What is the cost of the Eligibility (E1) transaction? The cost of the Eligibility service is still $0.015/transaction, excluding non-matched transactions, for both the current and existing services. Normal routing fees will also be charged for the transaction. So, for example, if your routing fee is $0.10, you will pay a total of $0.115 for transmitting the Eligibility transaction and for receiving the Eligibility service. This fee is not charged by NPS. 7) Where is further information available? For more information, please go to or call the RelayHealth Help Desk at (800) The RelayHealth Help Desk may assist with technical questions related to the E1 transaction and getting signed up for the E1 service. The Help Desk is equipped to handle pharmacy calls, but not patient calls. Additionally, while the help desk may assist pharmacists use of the E1 by viewing previous E1 requests and responses, they do not have access to the necessary databases to determine why patient data returned by the plan has its particular value Medicare Part D Coverage GAP Discount Program Eligible Medicare Part D members will receive a 50% discount under the Medicare Part D Coverage Gap Discount Program on applicable formulary brand drugs at the point of sale when the beneficiary is partially or entirely in the Coverage Gap stage of his/her plan. This will result in a lower coinsurance/co-payment for the beneficiary. The Coverage Gap Program is a result of CMS having signed agreements National Pharmaceutical Services Pharmacy Provider Manual 28

29 with certain manufacturers of brand-name and biological Part D drug products. The labeler codes for the participating manufacturers are now available on the CMS Part D Manufacturer Web page: Coverage/PrescriptionDrugCovGenIn/Pharma.html. Using the CMS website listed above, pharmacies are encouraged to review the list of approved labeler codes (manufacturers) to determine if they have adequate inventories of approved Medicare Part D drugs, based on the manufacturer labeling codes that will be eligible for coverage under the Medicare Part D benefit. The CMS list can be used to guide inventory purchases in the upcoming months for applicable Part D drugs that will continue to be covered under Medicare Part D. In order to ensure that beneficiaries receive access to the Part D Coverage GAP Discount Program, it is important that pharmacies submit claims via NPS at the Point of Sale Drug Shortages NPS is aware of market conditions that do not allow pharmacies to dispense the medication that may have been originally written by providers. NPS will make best attempts to evaluate and reevaluate drugs that may in shortage situations to provide pharmacies with alternatives. The potential alternatives that may be employed include the following: Suspension of copay differentials or ancillary changes Formulary status tier placement Relaxation of utilization management strategies such as prior authorization, step therapy programs, and/or quantity limitations. Claims Processing messaging Therapeutic Substitution Programs NPS will retrospectively monitor drug utilization patterns to evaluate and interpret prescribing patterns for drugs that are currently in short supply Partial Fill Claims Processing Guidance A Partial Fill claim occurs when a pharmacy attempts to fill a script and determines that there is not enough of the drug in stock to provide the entire prescribed quantity/days supply. The partial fill functionality is used when the total quantity of a prescribed drug is not initially dispensed to a member due to a shortage in inventory. The member returns to the pharmacy to receive the remainder of the prescribed drug that was not initially dispensed. NPS Network Pharmacy Providers will have two options in billing and being reimbursed for partially filled prescription drug(s) when there is a shortage in inventory or when a member receives small quantities of prescribed drugs (including controlled substances) due to terminal illness or residing in a nursing facility. The two options are: 1) The pharmacy can continue to dispense a partial quantity of a prescribed drug and bill the total quantity of the drug listed on the prescription and later dispense the remainder of the prescribed drug to the member when more stock is available or 2) Employ the NCPDP Partial Fill Functionality. The following is guidance from NPS (BIN ; PCN DNPS or NPS) for partial fill claims processing. Pharmacist Guidance for the Partial Fill Process 1) The reimbursement of the drug for subsequent and complete fill transactions will be the same price as the initial fill transaction, even if the base drug price has fluctuated. 2) Partial and complete fill transactions must be performed by the same pharmacy. 3) Pharmacy to pharmacy transfer of a partially filled prescription is prohibited. 4) Two partial fill transactions cannot be submitted on the same day. 5) The date of service must be different for each partial and complete fill transaction. 6) The coordination of benefits for partial fill transactions cannot be used if: a) The primary payer does not utilize this functionality. b) The claim is for a compounded drug. 7) All partial fill claims must contain the same NDC or equivalent NDC that has the same Generic Product Identifier (i.e. same product, strength, dosage formulation). 8) The copayment may vary for the partial fill claim depending upon the Plan Sponsor s benefit settings: a) The member s co-payment/co-insurance may be prorated based on the fractional percentage of the quantity dispensed compared to the quantity prescribed. b) The member s co-payment/co-insurance may be calculated based upon the whole quantity prescribed and applied to the initial partial claim or c) The member s co-payment/co-insurance may be calculated based upon the completion clam submission. 9) The dispensing fee paid may vary for the partial fill claim depending upon the Plan Sponsor s benefit settings. National Pharmaceutical Services Pharmacy Provider Manual 29

30 Claims will either be paid at a prorated amount based on the fractional percentage of the quantity dispensed compared to the quantity prescribed or with the full dispensing fee paid on the completed claim. 10) NPS will not accept partial fill transactions for Workers Compensation business. 11) Partial fill functionality cannot be used when submitting Multi-Ingredient Compound claims. 12) The Intended field information will be edited in order to notify the pharmacy when the intended days supply or quantity would cause the claim to reject if the claim had been submitted as a full claim 13) The Actual Days Supply and Quantity will be edited according to the member s benefit. 14) The Completed Claim will be edited based on balancing exactly to the Intended Days Supply and Quantity. 15) The Partial and Completed Claim will be counted as one filled script. 16) The Refill Too Soon and Quantity Limit edits will apply to the Partial and Completed Claim since a full claim could be filled between these two transactions. 17) A Completed Claim does need to be submitted in order to fill a subsequent full claim 18) A pharmacist may partially fill a prescription for a controlled substance listed in schedule II after reviewing applicable state and federal regulations: a) If the pharmacist is unable to supply the full quantity called for in a written or emergency oral prescription and he makes a notation of the quantity supplied on the face of the written prescription or written record of the emergency oral prescription. The remaining portion of the prescription may be filled within 72 hours after the first partial filling. If the remaining portion is not or cannot be filled within the 72-hour period, the pharmacist shall notify the prescribing practitioner. No further quantity may be supplied beyond the 72-hour period without a new prescription. b) For a patient in a facility for long-term care or for a patient who has been diagnosed as having a terminal illness. The pharmacist shall record on the prescription that the patient is a LTC patient or terminally ill. The date of the partial filling, the quantity of the medication that is dispensed, the remaining quantity which is authorized to be dispensed, and the signature or initials of the pharmacist must be recorded on the back of the prescription. The total quantity of the controlled substance that is dispensed in all partial fillings must not exceed the total quantity of the controlled substance that is prescribed. A prescription is valid for 60 days after the date of the prescription unless the prescription is terminated earlier by the discontinuance of medication. 19) A pharmacist may partially fill a prescription for a controlled substance listed in schedule III, IV or V after reviewing applicable state and federal regulations: if: a) Each partial filling is recorded in the same manner as a refilling b) The total quantity dispensed in all partial fillings does not exceed the total quantity prescribed; and c) No such filling occurs more than 6 months after the date on which the prescription was issued If a member receives only a partial amount of his/her covered prescription, the pharmacy must modify the claim within 14 days to accurately represent the quantity of medication received and billed. Pharmacies will be audited for claim reversals. Pharmacy Claims Processing Requirements In order to submit a partial fill claim, the fields listed below are required to be populated in the NCPDP Telecommunications Standard. These are standard fields in NCPDP. Any pharmacy that is having trouble accessing these fields should contact their software vendor for further clarification. The table on the following page is a sequential depiction (from left to right) of the population of fields from the INTIAL FILL TO THE PARTIAL FILL TO THE COMPLETION FILL. *The actual quantity dispensed and days supply dispensed must be less than the values submitted in the Quantity Intended to Be Dispensed and Days Supply Intended to Be Dispensed fields. When billing a subsequent partial fill transaction, Quantity Intended to Be Dispensed (NCPDP field 344-HF) and Days Supply Intended to Be Dispensed (NCPDP 345-HG) are not required. However, if either field is submitted, then both fields are required. Reversal Billing of Partial Fill Transaction When the pharmacy wants to reverse a partial fill transaction, the most recent transaction must be reversed first. If both P and C transactions have been accepted, then the C transaction must be reversed before reversing the P transaction. The Dispensing Status field is not required. If a pharmacy must submit a partial fill transaction of a complete fill transaction on the same service date, a reversal of the partial fill transaction with the same service date must be done and a resubmission of the partial fill transaction as a combined amount must occur. National Pharmaceutical Services Pharmacy Provider Manual 30

31 Claims Submission Process NCPDP Field Field Name Initial Fill Subsequent Partial Fill Completion of Partial Fill 442-E7 Quantity *Enter actual Quantity Dispensed Enter actual Quantity Dispensed Enter actual Quantity Dispensed 405-D5 Days Supply *Enter actual Days Supply Enter actual Days Supply Enter actual Days Supply 456-EN 457-EP 343-HD 344-HF 345-HG Associated Prescription Service Reference Number Associated Prescription Service Leave blank or report zeros Leave blank or report zeros Dispensing Status Enter Dispensing Status Value - P Quantity Intended to be Dispensed Days Supply Intended to be Dispensed *Enter Quantity Intended to be Dispensed = the total prescribed amount for the Rx. *Enter Days Supply Intended to be Dispensed = the total days supply from the Rx. Enter Associated Enter Associated Prescription/ Prescription/ Service Service Reference # = the Reference # = the prescription number from the prescription number from the initial partial fill. initial partial fill. Enter Associated Prescription/Service Date = the date of service of the most recent partial fill in the series Enter Dispensing Status Value - P Enter Quantity Intended to be Dispensed = the total prescribed amount for the Rx. Enter Days Supply Intended to be Dispensed = the total days supply from the Rx. Enter Associated Prescription/Service Date = the date of service of the most recent partial fill in the series Enter Dispensing Status Value - C Enter Quantity Intended to be Dispensed = the total prescribed amount for the Rx. Enter Days Supply Intended to be Dispensed = the total days supply from the rx Pharmacy Claims Rejection and Error Handling Below are a few tips to assist pharmacies in error processing and rejected claims submissions handling. 1) The fill number (NCPDP field 4Ø3-D3) must be the same for the partial and complete fill transactions. 2) The initial fill of a partial fill can exist without a completion fill but a completion fill cannot exist without an initial fill. 3) If the Dispensing Status value is P and either no or an invalid associated prescription reference number has been submitted, the claim will reject with the NCPDP error code RT - Missing/Invalid Associated Prescription/Service Reference Number on Partial Fill Transactions. If an accumulation of dispensed quantity and dispensed days supply for all claims does not equal the values reported in the Quantity Intended To Be Dispensed or Days Supply Intended To Be Dispensed fields, the transaction will reject with the NCPDP reject code E7 - Missing/Invalid Quantity Dispensed or 19 - Missing/Invalid Days Supply 2.13 Standard Billing Units NPS follows the NCPDP Guide for Standard Billing Units. The NCPDP Billing Unit Standard was developed in an effort to resolve the conflict between manufacturers, CMS, and the state programs because of improper billing. Billing Unit Standard The guiding principle of the standard is that there are only three billing units necessary to describe all drug products: EA, ML, and GM. EA (each) is used when the product is dispensed in discreet units. These products are not measured by volume or weight. EA is also used to address exceptions where GM and ML are not applicable. Examples: Tablets, Capsule, Suppositories, Transdermal patches, Non-filled syringes, Tapes. ML (milliliter) is used when a product is measured by its liquid volume. Examples: Liquid non-injectable products of 1 ml or greater, liquid injectable products in vials/ampules/syringes, reconstitutible non-injectable products at the final volume after reconstitution except when they are in powder packets, Inhalers (when labeled as milliliters on the product). National Pharmaceutical Services Pharmacy Provider Manual 31

32 GM (gram) is used when a product is measured by its weight. Examples: Creams (of 1 gram or greater), Ointments (of 1 gram or greater), Inhalers (when labeled as grams on the product). The generally used billing units for given dosage forms are noted in the following table: Dosage Form EA ML GM Tablet (all forms) Capsule (all forms) Non-Injectable Liquid* ( 1 ml) Non-Injectable Liquid* (< 1 ml) Injectable Liquid* Non-Injectable Solution or Suspension for Reconstitution Injectable Solution or Suspension for Reconstitution Cream/Ointment ( 1 gm) Cream/Ointment (< 1 gm) Powder Powder Packet Suppositories Aerosol inhalers (gm or ml specified by manufacturer) Gel Transdermal Patches Lotion Strips Device Kits Bulk chemicals (liquid) Bulk chemicals (solid) *Liquid i.e., Solution/Liquid/Suspension. General Rules The following general rules must apply and are issues as billing instructions to pharmacists. When billing third party programs, values must be expressed in metric decimal units. Note: Earlier versions of the standard allowed rounding. This is no longer acceptable. The billing unit and quantity are taken from the product labeling affixed to the product. If the package size differs between the package label and the package insert, the size noted on the package label is to be used. Standard apothecary conversions must be used in determining billed quantities (i.e., 1 ounce liquid equals 30 milliliters, 1 ounce solid equals 30 grams) unless the package label specifically states otherwise (i.e., 28.4 grams). Special Considerations Kits are defined as products that contain: at least two distinct drug items with different billing units one drug product packaged with medicated or unmedicated swabs, wipes, and/or cotton swabs/balls meters packaged with test strips Kits carry a single NDC for the combined items. Kits are designed with the intent to be dispensed and billed as a unit of each. If a kit contains separate, distinct trays within the kit, the billing unit is an each, but the quantity is the number of trays rather than 1. Bulk Chemicals are stock containers of chemicals used in compounding. The Billing Unit can vary based upon the physical components inside the container. Bulk Chemicals that are labeled in grams have a billing unit of GM Bulk Chemicals that are labeled in milliliters have a billing unit of ML Bulk Chemicals with variable potencies are billed as one each Antihemophilic products activity level can differ from batch to batch or it can be specific. Products derived from biologic sources where the strength or volume is variable from lot to lot shall be billed as 1 each. In the case where strength varies from lot to lot, the number of strength units shall be the package size. In the case where volume varies from lot to lot and the strength remains constant, the billing unit shall be 1 each per packaged product. NovoSeven and Kogenate are billed as an EA using the number of UNITS dispensed (i.e. International units or micrograms) Alpha-1 proteinase inhibitors (such as Prolastin) are billed as an each using the number of MILLIGRAMS dispensed (each; 1 MG= 1 EA) not eaches of a kit RhoGAM has a varying volume and is billed as 1 EA for the entire vial regardless of the number of milliliters or grams Exceptions Several products don t fit into any of the above categories or were assigned billing units before the standard specifically addressed the product type. The following products have been grandfathered into this standard as exceptions: National Pharmaceutical Services Pharmacy Provider Manual 32

33 Product Epinephrine single dose injection devices (EpiPen, EpiPen Jr, Auvi-Q) Imitrex Kit Refill and generics of Imitrex Kit Refill Prevpac and generics of Prevpac Helidac and generics of Helidac Pulmicort Inhaler and generics of Pulmicort Inhaler QUIC Form Billing Unit 1 EA 1 EA 14 EA 56 EA 1 EA The Quantity Unit Information Communication (QUIC) form is used to request clarification of and/or suggest modifications to the NCPDP Billing Unit Standard and can be found on the NCPDP web site at Also available on-line is the Billing Unit Decision Tree used to determine the billing unit standard. If the decision tree does not yield a response, then a QUIC form should be submitted. Please refer to the NPS Common Billing Errors table located in the Pharmacy Provider Manual appendices for drug specific correct method of billing 2.14 Medicare Prescription Drug Coverage and Your Rights Medicare Part D Standard Pharmacy Notice Pharmacies (including mail-order and specialty pharmacies) must distribute this notice to Part D enrollees when a prescription cannot be covered ( filled ) under the Medicare Part D benefit at the POS. The notice must be provided to the enrollee if the pharmacy receives a transaction response (rejected or paid) indicating the claim is not covered by Part D. The notice instructs enrollees about their right to contact their Part D plan to request a coverage determination, including an exception. This notice fulfills the requirements at 42 CFR (a)(3) and (b)(7)(iii). The pharmacy notice must be provided to the enrollee if the pharmacy receives a transaction response indicating the claim is not covered by Part D and the designated NCPDP response code is returned. The designated NCPDP response code is NOT returned in the following scenarios: The claim rejects only because it does not contain all necessary data elements for adjudication; The drug in question is an over the counter (OTC) drug that is not covered by the enrollee s Part D plan sponsor; The prescription is written by a sanctioned provider who has been excluded from participation in the Medicare program; The drug is not listed on the participating CMS Manufacturer Labeler Code List; The drug is not listed on the FDA Electronic List- NDC Structured Product Labeling Data Elements File (NSDE); The Part D plan rejects the claim for the drug in question only because of a refill too soon/early refill edit; or The drug in question is not covered by the Part D plan benefit, but is covered by a co-administered insured benefit managed by a single processor. In this scenario, the pharmacy submits a single claim transaction for the drug and the drug is covered by the co-administered insured benefit after being rejected by part D and processed in accordance with the benefits offered by the supplemental payer. NOTE: If the drug is not covered by the Part D plan, but the enrollee pays for the cost of the drug pursuant to plan-sponsored negotiated pricing or a discount card program (which may provide a lower price but leaves the enrollee responsible for 100% of the drug cost), a designated NCPDP response code will be returned notifying the pharmacy to provide the enrollee with a copy of the pharmacy notice. This is a standardized notice, the content of which may not be altered. Printing the pharmacy notice on prescription label stock or an integrated prescription receipt is permitted, so long as the notice is provided in at-least 12 point font. Electronic distribution of the notice is permitted if the enrollee or the enrollee s appointed representative has provided an address or fax number and has indicated a preference for that method of communication. The OMB control number must be displayed in the upper right corner of the notice. The fields for the enrollee s name and the drug and prescription number are optional and may be populated by the pharmacy. NPS will prompt or remind pharmacies to provide this notice by using the NCPDP Fields outlined below or special response messaging as applicable. If the member is not eligible for transition and has been prescribed a drug that is subject to transition requirement coverage, NCPDP Reject code #569 Provide Beneficiary with CMS Notice of Appeal will be messaged. If the beneficiary is enrolled in a plan for which the supplemental benefits are co-administered with Part D, and the Part D plan does not cover the medication but the supplemental payer does, NCPDP Approved message Code #18 Provide Beneficiary with CMS Notice of Appeal will be messaged. Failure to distribute the standardized pharmacy notice does not in any way limit an enrollee s right to request a coverage determination from their plan sponsor. A sample of this notice is provided in the Appendix to this manual or available at Grievances/MedPrescriptDrugApplGriev/PlanNoticesAndDocu ments.html. National Pharmaceutical Services Pharmacy Provider Manual 33

34 NPS has internal controls and audit procedures in place to ensure network pharmacies are complying with the requirement to distribute the standardized pharmacy notice including periodic communication with network pharmacies regarding the requirement to distribute and investigation and compliance actions regarding enrollee complaints about a failure to receive the pharmacy notice. Mail Order Pharmacies Mail-order pharmacies must distribute the standardized pharmacy notice to the enrollee if a prescription cannot be covered ( filled ) under the Medicare Part D benefit as described above. The mail-order pharmacy has the option of working with the plan and the prescriber to resolve the matter and provide the needed medication or an appropriate substitute. If the issue cannot be resolved and the pharmacy cannot fill the prescription, the notice must be provided to the enrollee via the enrollee s preferred method of communication (fax, electronic, or first class mail) as expeditiously as the enrollee s health condition requires, but no later than 72 hours from the pharmacy s receipt of the original transaction response indicating the claim is not covered by Part D. Home Infusion Pharmacies If a prescription cannot be covered ( filled ) under the Medicare Part D program as described above, the home infusion pharmacy must distribute the standardized pharmacy notice to the enrollee either electronically, by fax, in-person, or by first class mail. The home infusion pharmacy has the option of working with the plan and the prescriber to resolve the matter and provide the needed medication or an appropriate substitute. If the pharmacy cannot fill the prescription, the notice must be provided to the enrollee as expeditiously as the enrollee s health condition requires, but no later than 72 hours from the pharmacy s receipt of the original transaction response indicating the claim is not covered by Part D. For enrollees brought on service by the home infusion pharmacy, the pharmacy can also choose to deliver the notice in person with delivery of home infusion drugs or through an infusion nurse, as long as the next scheduled visit is within 72 hours of the receipt of the transaction code indicating the claim cannot be covered by Part D. Pharmacies Serving Long-Term-Care Facilities Given the uniqueness of the long-term-care (LTC) setting, there is typically no point-of-sale encounter between the pharmacy and the enrollee (LTC resident) and, therefore, not practical means for the pharmacy to provide the notice directly to the enrollee. CMS expects that the pharmacist will contact the prescriber or an appropriate staff person at the LTC facility to resolve the matter and ensure the resident receives the needed medication or an appropriate substitute, obviating the need to deliver the notice. If the pharmacy must fax or otherwise deliver the notice to the enrollee, the enrollee s representative, prescriber or an appropriate staff person at the LTC facility as expeditiously as the enrollee s health condition requires, but no later than 72 hours from the pharmacy s receipt of the original transaction response indicating the claim is not covered by Part D. NOTE: If the enrollee is a self-pay resident, and the pharmacy cannot fill the prescription under the Part D benefit, the pharmacy must, upon receipt of the transaction response, fax or otherwise deliver the notice to the enrollee, the enrollee s representative, prescriber or an appropriate staff person at the LTC facility. After distribution of the notice, the LTC pharmacy should continue to work with the prescriber or facility to resolve the matter and ensure the resident receives the needed medication or an appropriate substitute. Indian Health Service (IHS), Tribe and Tribal Organization and Urban Indian Organization (I/T/U) Pharmacies Because IHS members prescription drugs, when dispensed through I/T/U pharmacies, are filled and dispensed at no cost to the enrollee regardless of whether the drug is rejected at POS by the Part D plan, I/T/U pharmacies are exempt from the requirement to distribute the pharmacy notice. NOTE: This exemption applies only to I/T/U pharmacies that dispense prescriptions at no cost to the enrollee. Any network commercial pharmacy providing services to IHSeligible Part D enrollees must distribute the notice in accordance with the requirements outlined in this memorandum Coupons and Copay Cards As used in this section, Coupon means any item or mechanism, including but not limited to paper coupons, copay cards, e-vouchers, mail-in rebates, and electronic coupon codes that reduces the member s portion of the cost of a prescription. Coupons may be funded by a manufacturer, repackager, or supplier of pharmaceutical products, by a payment assistance program, or by other sources. Pharmacy may accept Coupons to reduce a member s cost only if all of the following conditions are met: 1. Pharmacy has complied with all terms and conditions of the Coupon program, including but not limited to program prohibitions on the use of a Coupon in connection with covered items reimbursed by a governmental healthcare program. 2. The covered item is not a compounded drug. 3. The covered item either is approved by the FDA, is an over-the-counter drug, or is a grandfathered drug marketed that was marketed pre-1938 or pre-1962 or otherwise deemed Generally Recognized as Safe and Effective by the FDA. Coupons may not be applied to claims that are submitted to Medicare Advantage or Medicare Part D plans. Pharmacy s National Pharmaceutical Services Pharmacy Provider Manual 34

35 application of a Coupon in violation of this section constitutes a prohibited waiver of the obligation of Pharmacy to collect copays, coinsurance, and deductibles as per Section Trial and Synchronization Fills Effective January 1, 2014, CMS issued a final rule that allowed for the prorating of copays for less than a 30-day supply on prescriptions for Medicare Part D beneficiaries. In response, NCPCP created two new submission clarification codes: 47 Shortened Days Supply Fill only used to request an override to plan limitations when a shortened days supply is being dispensed. 48 Fill Subsequent to a Shortened Days Supply Fill only used to request an override to plan limitations when a fill subsequent to a shortened days supply is being dispensed. These codes should be utilized only in the cases of trial fills and refill synchronization. NPS monitors claims processed with these codes to detect and address potential FWA associated with their use. Inappropriate usage of these codes may result in claim reversals. National Pharmaceutical Services Pharmacy Provider Manual 35

36 Pharmacy Audit 3.1 Billing Errors Claims submitted incorrectly by the pharmacy may precipitate an audit. Common billing errors in violation of the Network Pharmacy Agreement include, but are not limited to: Incorrect days supply - Overstating the days supply may affect future refills, while understating the days supply may exceed the covered person s benefit. Participating pharmacy must submit the correct days supply, based upon directions for use and benefit limitations, to avoid an audit recovery. Reversal of claims - All prescriptions not received by the covered person within 14 days must be reversed through the electronic claims system. Use as directed - Participating pharmacy must determine the specific dosing directions to accurately calculate the days supply and correctly submit the claim to NPS. Participating pharmacy must contact prescribing provider to clarify any ambiguous directions (i.e., Use as Directed, no direction documentation, or As Needed ) and document them on the prescription. If the prescribing provider is unavailable, communication with the covered person is acceptable and must be documented. When specific dosing directions are not obtained, the accuracy of the amount paid to the participating pharmacy cannot be substantiated and is subject to audit recovery. Unacceptable Practices Based on the claims submission requirements, the following are examples of unacceptable actions which are in breach of the Network Pharmacy Agreement and, in some cases, fraudulent practices: Billing for a legend drug without a prescription or benefitsponsored voucher. Submitting incorrect information on claims which may lead to inappropriate bypass of benefit exclusions, DUR messages, or other plan edits. Billing for a quantity of a legend drug that is greater than the quantity prescribed. Billing for a higher priced drug when a lower priced drug was prescribed and dispensed to covered person. Dispensing a brand-name drug, billing for the generic, and then charging the covered person for the difference. Submitting a claim with an NDC other than the NDC from the package from which the product was dispensed. Dispensing a smaller quantity than was prescribed, that results in the collection of more than one professional dispensing fee (prescription splitting). If a covered person requests a smaller amount, a notation must be made on the hard copy of the prescription prior to dispensing. Billing more than once per month for maintenance drugs for covered persons in nursing facilities. A maintenance drug is a drug ordered on a regular, on-going, scheduled basis. This limitation does not apply to treatment medications or drugs ordered with a stop date of less than 30 days. Overriding DUR rejects without properly resolving and documenting the resolution. Incorrectly billing Part A or Part B eligible drugs to a Part D program. Billing compound products in a manner inconsistent with the compound billing requirements. Misrepresenting U&C. Please refer to the appendix for a listing of common billing errors. If you have any questions in regard to proper submission and billing of claims please call our Help Desk at and speak to a customer service representative. Extensions of the audit timelines set forth herein may be granted by the Network Pharmacy Agreement or by NPS in its sole discretion. NPS may make an adjustment to any claim where it is indicated that Pharmacy received an incorrect amount for Covered Services provided. The review of claim reimbursements to participating pharmacies by the plan administrator is a part of all thirdparty prescription drug benefit programs. Audits verify the integrity of claims submitted to NPS and payments made to the participating pharmacy. They also confirm the accuracy of claim information 3.2 Pharmacy Audits of Claims Audit Overview NPS conducts pre-payment daily claims reviews as well as maintains a pharmacy audit program on behalf of and as a service to Sponsors, in order to ensure compliance with program guidelines and to protect against abuses of the prescription programs. The review of claim reimbursements National Pharmaceutical Services Pharmacy Provider Manual 36

37 to participating pharmacies by the plan administrator is a part of all third-party prescription drug benefit programs. Audits verify the integrity of claims submitted to NPS and payments made to the participating pharmacy. They also confirm the accuracy of claim information submitted to identify instances of potential FWA. Audits comply with Federal and State laws to ensure privacy and confidentiality of all patient records. Audits also comply with HIPAA guidelines related to disclosure for treatment, payment or health care operations. Pharmacy acknowledges that HIPAA specifically permits a covered entity (e.g., a Pharmacy) to disclose protected health information to another covered entity for audit purposes. Specifically, as indicated in section 506(c)(4)(ii) of HIPAA, Pharmacy may disclose protected health information to NPS for the purpose of healthcare fraud and abuse detection or compliance. Several situations could trigger an audit, including but not limited to: Request or inquiry by a Benefit Sponsor or Covered Person. Pharmacy billing history. Pharmacy does not respond to or has significant issues identified through the pre-payment inquiry or prepayment daily claims review. Referral from NPS compliance hotline. Routine audit of pharmacies selected on a random basis. Audits may take the form of a phone call, letter, on-site visit, desktop or internal claims review. Claims submitted by the pharmacy and adjudicated by NPS are subject to desktop and/or onsite audits. NPS performs routine audits to determine the level of compliance with operating guidelines and the pharmacy network agreement. NPS has the right to review, inspect, and obtain copies of prescription files, records, and signature logs. Pharmacy will cooperate with NPS and Sponsors and comply with all applicable laws and regulations regarding complaints and grievances from Eligible Persons. Pharmacy will comply with the complaint and grievances procedures and programs established by NPS and Plan Sponsors. Similarly, regulatory and oversight entities and agencies may request that NPS supply documents from Providers. Provider must cooperate with NPS to supply the requested documentation in a timely manner. Because different regulatory agencies may give NPS or a Sponsor a different amount of time to respond to a request, what is timely may vary from request to request. The amount of time allowed to respond will be stated in the request from NPS. Types of Audit Activities 1) Pre-payment Daily Claims Review NPS monitors daily claims data to correct individual quantity and pricing errors on a pre-payment basis. This process educates participating pharmacies and helps avoid retroactive audit recoveries that may occur through a pharmacy desktop or on-site audit. The pre-payment daily claims review complements the desktop and on-site audit processes and is not intended to review all audit elements considered in a desk or on-site audit. If a claim is identified for review, NPS will contact the participating pharmacy via telephone, or fax to inquire about the validity of the claim. If, after the review of the claim and/or prescription hard copy, a determination is made that there is a billing error, NPS will request that the pharmacy reverse and correctly submit the claim. 2) Desktop Audits When a desktop audit is initiated, the participating pharmacy is contacted via fax, or US mail. Participating pharmacy is asked to provide photocopies of specific prescriptions in question, related to claims paid to the participating pharmacy during a specified time period. Requested documentation may include, but is not limited to: original prescriptions, signature or delivery logs, computer records, compound information including all ingredients with NDCs and quantities, and wholesaler, manufacturer, and return vendor invoices. 3) On-site Audits NPS conducts on-site audits of participating pharmacies. A written audit notification is provided to the participating pharmacy prior to a scheduled audit date. NPS will present Network Pharmacy with three suggested audit dates and times for on-site audits. This notification includes the audit timeframe and types of documentation that will be reviewed during the on-site audit. While on site, the auditor observes the participating pharmacy practices and reviews documentation. An interview is completed, preferably with the Pharmacist in Charge (PIC). Requested documentation may include, but is not limited to: original prescriptions, signature or delivery logs, computer records, insurance information, license information, compound information including all ingredients with NDCs and quantities and wholesaler, manufacturer and return vendor invoices. The auditor will verify that the hard copy matches the claim submitted and that the prescription was billed correctly. Other elements the auditor may request or observe are proper documentation, stock on hand, return-to-stock procedures and credits, and that the pharmacy is following the plan dispensing requirements. To prepare for an audit, the pharmacy should have its files in order, prepare any necessary documentation, assign an internal contact and resolve as much as possible before the auditor leaves the premises Audit Notification Desktop audit requests are sent via fax and/or electronic to respective pharmacies or a designated pharmacy National Pharmaceutical Services Pharmacy Provider Manual 37

38 chain contact such as a Third Party Claims department. For on-site audits, every effort is made to ensure pharmacies are notified approximately 30 days in advance and the pharmacy is contacted to schedule an appointment. Advanced notice may not be provided during fraud investigations, as allowed by law. During the audit, the pharmacy will be required to have available prescriptions and/or invoices for the time period specified in the audit letter or specified claims in question. If participating pharmacy cannot accommodate an on-site audit on the scheduled date and previous arrangements have not been agreed to by NPS for alternatives, NPS reserves the right to assess a full recovery of any unverified claims. Additionally, if a participating pharmacy is uncooperative during an audit, a full recovery of any unverified claims may be assessed. Pharmacy will provide NPS, Sponsors, governmental agencies and departments and/or their representatives or agents, during normal business hours, access to examine, audit, and copy any and all records deemed by NPS, in NPS s sole discretion, necessary to determine compliance with the terms of Pharmacy s Agreement with NPS, the NPS System, and other NPS guidelines and requirements. Pharmacy will, in addition to the above, provide NPS, within 14 calendar days of a request, any information requested as necessary for NPS to verify and/or substantiate Pharmacy s compliance with Pharmacy s Agreement with NPS. Audit Timeframe Standard on-site audits generally include prescriptions billed to NPS within the previous 24 months. Desktop audits generally include prescriptions billed to NPS within the previous 12 months. However, NPS has the right to audit claims for up to 7 years from the date of service for commercial claims and up to 10 years from the date of service for Medicare claims, or as otherwise permitted by law. Record Access NPS may determine the information required to address audit discrepancies, including, but not limited to, pharmacy s records not directly related to NPS claims that may have a bearing on determining potential discrepancies; for example, Usual and Customary Prices and dispensing patterns. In addition, when an NPS auditor calls upon an NPS pharmacy provider who has an inordinately large quantity of highpriced prescription drugs, the auditor will ask to see invoices substantiating the purchase of those drugs. To substantiate that the drugs dispensed were purchased from an authorized source, NPS may request that the participating pharmacy give authorization to the wholesaler or manufacturer to release invoices for purchase verification. Participating pharmacy must promptly comply with such requests. If the participating pharmacy fails to provide authorization, NPS has the right to assess a full recovery of the amount paid for any claims in question. Pharmacy agrees to process all claims with the unique NPS provider identification number of the dispensing pharmacy. Prescription claims submitted with an NPS provider number other than the dispensing pharmacy s NPS provider number are subject to full charge back. Pharmacy will maintain the confidentiality of all records relating to services provided by pharmacy to eligible persons. NPS s right to audit pharmacy records relating to services provided and the reporting of findings will survive the termination of Pharmacy s Agreement with NPS. NPS may report its examination/audit findings to appropriate governmental bodies, claims processors and payer, regulatory agencies, professional review and audit reporting organizations and other such entities Timelines for Submission of Documents- Desktop Audits Initial claim verification documentation for claims processed within the last year is requested within 72 hours. If the appropriate documentation is not received by the deadline a second request or a call to the pharmacy will be made. For claims processed greater than one year from the date of the request the documentation is requested within 7 days. NPS understands claims processed greater than one year from the date of request may possess special challenges in retrieving documentation and will work in cooperation with the pharmacy until such documentation can be furnished. Pharmacy may either fax or mail copies of requested documentation. A participating pharmacy s failure to submit the requested documentation by the due date may result in full or partial recovery of the amount paid, escalation to an on-site audit, or termination of the Pharmacy Participating Agreement Medicare Beneficiary Trust NPS, on behalf of Medicare plan sponsors, may conduct audits as a direct request from CMS to audit Prescription Drug Event data utilized for claims from the Medicare Beneficiary Trust fund. Pharmacies are required to retain records for paid claims for a timeframe of 10 years. Provisions set forth by 42 C.F.R. Section , Contract Provisions, states in part: (2) Maintenance of Records. The Part D plan Sponsor agrees to maintain, for 10 years from the end of final contract period or from completion of an audit, books, records, documents, and other evidence of accounting procedures and practices (d) include records of the following (xi) all prescription drug claims for the current contract period and 10 prior periods. Financial reports and source records may be stored in the original paper format or preserved in micromedia or electronic format. Providers must also maintain an office National Pharmaceutical Services Pharmacy Provider Manual 38

39 policy and procedure relating to the storage of various types of records. In the event that CMS later adopts a longer period of record retention or audit cooperation, providers will be expected to comply with those additional time periods. Prescription Medication Fraud, Waste, and Abuse CMS requires appropriate FWA training be conducted by first tier, downstream, and related entities on an annual basis. A first tier entity is a party that enters into a written arrangement with a plan sponsor to provide services under a Medicare Part C or Part D program; Medicare Advantage organizations and Medicare Part D sponsors are first tier entities. A downstream entity is a party below the level of first-tier entity that enters into a written arrangement to provide such services; pharmacies are downstream entities. It is the responsibility of the pharmacy to ensure appropriate training is provided in order to meet the requirements of CMS. Guidance on Medicare Part D Fraud, Waste, and Abuse can be obtained from CMS s Chapter 9 Part D Program to Control Fraud, Waste and Abuse of the Prescription Drug Benefit Manual. If you suspect fraud, abuse, or suspicious activity has occurred, is occurring, or will occur, please report it immediately by contacting the NPS Compliance officer at compliance@pti-nps.com. HHS OIG: HHS-TIPS ( ) HHSTips@oig.hhs.gov Fax: Medicare Program directly at 1(877) All reports are treated as confidential and will be investigated as appropriate, including applicable referral to law enforcement and regulatory bodies. Reports may be made anonymously. Potentially Fraudulent Prescription Referrals According to government estimates, healthcare fraud may represent 5% of the healthcare dollar. Together, NPS and participating pharmacies can coordinate efforts to provide an effective prescription benefit while also helping to deter fraudulent claims. Pharmacy will notify NPS if pharmacy has reason to believe potentially fraudulent prescriptions or inappropriate claims activity, such as the following, is occurring: An eligible person is presenting a prescription not written by the prescriber identified. An eligible person is presenting a forged or altered prescription, calling in their own prescriptions, or may be over-utilizing prescriptions. Medication is inconsistent with practice or specialty of prescriber. Fraudulent original prescriptions involve many types of medications (antibiotics, antifungals, antivirals, cardiac, cholesterol lowering, etc.), not just controlled substances. NPS has also seen an increase in the number of prescriptions inappropriately telephoned to pharmacies by patients posing to be prescribers. A Pharmacy must know their patient and prescriber. Pharmacy should verify the prescription with the prescriber and the identity of the patient before dispensing. Prescriptions not authorized by a prescriber are not valid prescriptions and are subject to recovery from the pharmacy. When potential fraudulent activities are identified the following information should be forwarded to the NPS Audit department by telephone at option 3 then option 2. The eligible person (member ID number), prescriber (DEA or NPI number, if possible), pharmacy (NABP or NPI number), and the fraudulent prescriptions or inappropriate claims activity. Potential fraudulent claims may also be forwarded by mail to: National Pharmaceutical Services Pharmacy Audits PO Box 407 Boys Town, NE Audit Expenses Participating Pharmacy may not charge NPS for pharmacy personnel time involved in performing an audit. Each Participating Pharmacy is responsible for its own expenses and Participating Pharmacy shall bear the expense of providing records to NPS Medicare Drug Integrity Contractor The Medicare Drug Integrity Contractor (MEDIC) investigates any suspected FWA in Medicare Part D. Any suspected FWA in Medicare Part D should be referred to the MEDIC. Fraud cases may involve beneficiaries, pharmacies, physicians or other providers, health plans, or other organizations. CMS requires referrals for fraud cases to be made within 30 days of detection. What Cases Should be Referred? Potential criminal, civil, or administrative law violations, allegations involving known patterns of fraud, patterns of fraud or abuse threatening the life or wellbeing of beneficiaries, schemes with large financial risk to the Medicare Program or beneficiaries, and allegations extending beyond the PDP/MAPD, involving multiple health plans, multiple states, or widespread schemes should be referred to the MEDIC. What Not to Refer to the MEDIC? Non Part D FWA issues Premium refunds: Refer to Social Security Administration (SSA) Non-receipt of an EOB/Medicare Summary Notice Complaints or inquiries regarding Medicare coverage policy General complaints concerning the program, individuals or organizations National Pharmaceutical Services Pharmacy Provider Manual 39

40 Lost Medicare cards (refer to SSA) Complaints regarding the appeals process/status. Complaints over the status of a PDE. Requests for beneficiary Medicare plan disenrollments due to plan changes, beneficiary no longer wants Medicare coverage, etc. (refer to CMS Regional Office). Complaints alleging malpractice or poor quality of care may or may not involve a FWA situation and need to be assessed on a case-by-case basis. Health Integrity, LLC is the National Benefit Integrity MEDIC. Because specific information may include data protected by HIPAA or the Privacy Act, referrals should be transmitted by one of the following methods: 1. Call the MEDIC at 877-7SafeRX and provide the information to the complaint specialists who will record the information into a database, acknowledge and follow up on the complaint. 2. If reporting potential theft of a beneficiary s HICN or a prescribers identifier (often called compromised identifiers), please complete and fax a MEDIC Compromised ID Report Form. 3. Complete and fax a Fraud Referral Form to the MEDIC at (410) or mail to: Health Integrity, LLC 9240 Centreville Rd. Easton, MD Attn: MEDIC Call 877-7SafeRX to verify receipt of the referral and discuss specifics related to the case. The MEDIC Compromised ID Report and Fraud Referral Form are also available in PDF at: HEAT Task Force The Health Care Fraud Prevention and Enforcement Action Team (HEAT) Task Forces was created by the Department of Justice (DOJ) and the Health and Human Services Office of Inspector General (OIG) in May It is a multi-agency team of federal, state, and local investigators designed to combat Medicare fraud through the use of data analysis techniques and an increased focus on community policing in geographic areas at high risk for fraud. There are currently nine HEAT Strike Force Teams which are located in Miami-Dade, Los Angeles, Detroit, Houston, Brooklyn, Baton Rouge, Tampa, Dallas and Chicago. In an effort to prevent FWA of the Medicare Beneficiary Trust, NPS targets the HEAT Strike Force locations as high risk areas. NPS periodically audits pharmacies within a geographic distance of the zip codes associated with the HEAT Strike Force locations. Pharmacies within the identified geographic regions should have heightened awareness to potential fraud perpetrators and take additional action necessary to prevent FWA. In addition to the nine Medicare Fraud Strike Force Team locations, NPS periodically monitors the following counties that have been identified as high risk areas: Broward (FL), Harris (TX), Kings (NY), Wayne (MI) and Pinellas (FL). The following are key characteristics which represent some patterns and trends noted in cases within certain Part D schemes: Prescriber contact information often will not match with the contact information from the NPI registry or DEA registration Individuals representing medical clinics will present prescriptions to pharmacy and make pick-up arrangements indicating they will deliver filled prescriptions to beneficiaries Beneficiary s address often located over 100 miles from medical clinic and pharmacy Multiple prescriptions for multiple patients being presented at one time Prescriptions for target high-cost medications If you believe your pharmacy has been impacted or is in the process of filling a suspected fraudulent prescription, immediately contact the prescriber and/or member to verify prescription. If you have identified a fraudulent prescription and the suspect is still in your pharmacy or will be returning, call local law enforcement or dial 911. If an arrest occurs, contact the Department of Justice HEAT Task Force within your geographic region Medicare Part D Hospice Patients NPS conducts audits for Medicare Part D plan sponsors to validate if claims for beneficiaries which CMS has reported are within a period of hospice coverage and were billed appropriately to the Part D benefit. NPS will notify pharmacies via fax and will include the claims. NPS will require a response from the pharmacy to validate that the claim was billed to Part D appropriately or if the claim was associated with the hospice care and should be reversed from the part D plan sponsor. Pharmacy will be asked to submit documentation to support the claim was appropriately billed to the Medicare Part D coverage. The pharmacy should work with the Hospice facility and prescriber to validate if the prescription was part of the hospice program and document this information within the response to the NPS Audit Department Medicare Part D End Stage Renal Disease (ESRD) Patients NPS conducts audits for Medicare part D plan sponsors to validate that claims were billed appropriately. NPS will notify pharmacies related to potential. NPS will notify pharmacies via fax which will include the ESRD patient claims billed to National Pharmaceutical Services Pharmacy Provider Manual 40

41 Part D plans. NPS will require a response from the pharmacy to validate that the claim was billed to Part D appropriately or if the claim was associated with the ESRD facility payment bundle (Part B) and should be reversed from the Part D plan sponsor. It should be noted that this requirement is to maintain compliance with the expectations set forth by CMS and failure to comply may result in additional actions, including Corrective Action Plan submission by the pharmacy. Pharmacy will be asked to submit documentation to support the claim was appropriately billed to the Medicare Part D coverage. The pharmacy should work with the ESRD facility and prescriber to validate if the prescription should have been part of the ESRD payment bundle. The pharmacy must document this information within the response to the NPS Audit Department. The pharmacy claim will be reversed if documentation indicates the medication was a Part B covered drug. 3.3 Inspection of Records The pharmacy is required to furnish NPS with the following documentation upon request: Photocopy of the original hard copy prescription (front and back) for each prescription number. This should include the micro-tag or computer generated sticker that summarizes the prescription information for the date of service indicated. Photocopy of the signature log, shipping record or delivery manifest for the prescription and date of service requested. This may be submitted as an image of a hard copy signature log, a printout from electronic signature capture or a printout from the pharmacy s software indicating the prescription sale/receipt. Prescription record screenshot from pharmacy s computer system. This record should include patient name, drug name and strength, date of service, DAW code, quantity, days supply, product service ID, prescriber ID and prescription number. Evidence that any required member copay or coinsurance was collected. This may take the form of a sales receipt, a statement of account, or a similar document. It must include the prescription number and date of service, the amount collected, the payment type, and the date of payment. Prescription Requirements and Auditable Records Prescription hard copies include written prescriptions, refill authorizations, institutional orders (verbal or telephoned orders, prescription transfers, and electronic prescriptions relied on by Pharmacy). Electronic documentation must be noted prior to dispensing and have a system assigned user, date and time stamp in order to take the place of hard copy documentation. All prescriptions, including oral, telephone, and/or computer-generated prescriptions, must include, but not limited to, the following information: Full name, address and date of birth for whom the prescription was written by the prescriber. Full name, NPI and telephone number of the prescribing provider and, if the prescription is for a controlled substance, the prescribing provider s DEA number. If the prescribing provider did not include their NPI/DEA number(s) on the prescription, the participating pharmacy must call the prescribing provider to verify that the prescription is valid and obtain the NPI/DEA number(s) of the prescribing provider. This action should be noted on the original prescription. Name and strength of medication prescribed. Quantity authorized by the prescribing provider. Specific dosing directions. If the prescribing provider writes Use as Directed, participating pharmacy must obtain specific directions and document them on the hard copy before filling prescription. Substitution instructions with appropriate documentation. When medically necessary, the prescribing provider may write Dispense as Written on the prescription, or in the case of a telephoned prescription, the pharmacist must manually write Dispense as Written on the written prescription order. If the covered person requests brandname, participating pharmacy must document the request on the original hard copy. Refill instructions. If there are no refills indicated by the prescriber, the participating pharmacy will assume no refills. If refills are added to a prescription, participating pharmacy must retain written documentation of the authorization and assign a new prescription number. Should a pharmacy refill a prescription early, documentation as to why it is refilled early (e.g., lost prescription, therapy change, vacation supply, etc.) is necessary. Prescription hard copy must be labeled with the corresponding prescription number. If the prescription is for a drug under a federally regulated program (for example, ipledge or S.T.E.P.S.), the authorization number obtained from the program must be documented on the prescription hard copy before dispensing. Medication pricing brochures for cash customers (paper, Internet or other format). The name and metric quantity for each component utilized to prepare a compounded prescription. Documentation of verbal or telephoned prescription orders must contain the date and time the prescription was received, the name of the caller, and the name or initials of the pharmacy staff member who received the prescription. National Pharmaceutical Services Pharmacy Provider Manual 41

42 Documentation of any changes or additions to the prescription, including, but not limited to, revisions to the medication s strength, daily dosage, quantity of medication prescribed, refill authorization, or generic substitution instructions; along with the date and name of the person at the prescriber s office who authorized the change. Prescription hard copies that are missing one or more required elements may be considered invalid and subject to audit recovery. For Medicare Part B Covered Services dispensed under a Medicare Part D plan, the patient s diagnosis must be noted on the prescription. For Covered Services dispensed to a patient in a Long-Term Care facility, the level of service (skilled nursing, assisted living facility, etc.) provided to the patient must be noted. For Medicare Part D Covered Services dispensed to a home infusion patient, the date the patient was discharged from the hospital or other acute care facility must be documented. Scanned Prescriptions You are required to maintain a prescription record for each Covered Service you dispense. You may keep either a hardcopy prescription or a scanned image of the prescription. If you keep scanned images, you must meet the following requirements: The scanned image must meet all applicable pharmacy and Federal laws, rules and regulations. For Covered Services that are controlled substances (Schedules II, III, IV, and V) and for Covered Services dispensed to Medicare Part D beneficiaries, you must also retain the hard-copy paper prescriptions. You must scan and retain both sides of the hard-copy prescription. The scanned image must include any notes regarding the dispensing (i.e., overrides). Pharmacy will maintain, in accordance with industry and Sponsor standards and applicable laws, rules and regulations (or 7 years, whichever is greater) in a readily retrievable manner during NPS s audit, the records necessary to determine compliance with the terms of Pharmacy s Agreement with NPS, NPS and Sponsor Quality Assurance and/or Utilization Review Committee standards, and/or other NPS guidelines and requirements. If records are maintained at a location other than the pharmacy, the pharmacy shall retrieve all such records prior to the audit and make them available at the pharmacy during the audit. Such records will include but not be limited to: 1) Paper prescription records, signature logs, quality assurance plans or dispensing procedures, daily prescription logs, refill data, prescriber information, patient information, transfer of prescription stock between pharmacies, pharmacy records stored electronically, compounded prescriptions (quantities and components) dispensed by pharmacy, medication pricing brochures for cash customers (paper, Internet or other format) and wholesaler, manufacturer and distributor invoices. Signature Claim Log Pharmacy will maintain a signature log for all prescriptions. Signature logs must contain the elements listed in Section Pharmacy is required to maintain the signature log in a retrievable manner by date of service at the pharmacy for a period of 7 years for managed groups and the current contract year plus 10 years for Medicare groups. Pharmacy is not entitled to payment for any claim for which there is no signature of the member or authorized representative on the signature log. Pharmacies that are approved to dispense prescriptions by mail or other remote carrier shall maintain either a signature log or a record of shipment, including tracking numbers where applicable. Such records must reference prescription numbers and fill dates. 3.4 Audit Findings Audit Adjustments and Reversals Claims that were submitted incorrectly or were deemed fraudulent may result in reversals or adjustments, and NPS may reclaim overpayments made to the pharmacy. For certain discrepancy types, such as incorrect quantity, incorrect days supply, overpriced compound, or brand-name drug dispensed in place of generic, the pharmacy may be entitled to an adjusted payment amount. In these cases, the recovery amount will be the difference between the original reimbursement and the corrected reimbursement; otherwise, the full amount of the original reimbursement will be recovered. NPS does not do charge backs on an allocation basis; all charge backs are prescription specific. Corrected reimbursements will be applied as a credit memo to Pharmacy s claims remittance beginning with the next reconciliation. Discrepancy Type Prescription not on file No record of fill Wrong patient Member not eligible Prescription expired or postdated Use as directed sig Refill not authorized by prescriber Documentation Required to Address Discrepancy* Prescriber attestation Not addressable Not addressable Not addressable Not addressable Prescriber attestation Prescriber attestation National Pharmaceutical Services Pharmacy Provider Manual 42

43 Discrepancy Type Invalid prescriber ID Controlled substance prescription missing DEA number Telephone prescription missing required element Prescriber contests authorizing prescription Prescription altered Invalid prescription, other Dispensed product or quantity inconsistent with prescription Dispensed product or quantity inconsistent with claim Documentation Required to Address Discrepancy* Not addressable Not addressable Prescriber attestation Prescriber attestation Prescriber attestation Case-dependent Not addressable Not addressable Inappropriate use of DAW code Not addressable Incorrect days supply Exceeds plan limits Refill too soon Mail order refill not authorized by member Failure to reverse Missing signature log Patient contests receipt Unsolicited telephone contact Overpriced compound Pharmacy error Pharmacy non-response to documentation request Failure to collect copay Pharmacy not properly credentialed Not addressable Not addressable Not addressable Member attestation Evidence of reversal or not timely dispensing Member attestation Member attestation Documentation of permission to contact Not addressable Not addressable Requested documentation Evidence of timely copay collection Not addressable Violation of Network Agreement Case-dependent Other Case-dependent *These items are guidelines only, and documentation submitted by the pharmacy will be reviewed on a case-bycase basis. Member attestations must include the member s name, address, telephone number and date of birth, must clearly reference the medication name(s), date(s) filled, and date(s) received, and must be signed and dated by the member. Prescriber attestations must be on the prescriber s own letterhead or prescription blank, must include the member s name and date of birth, the prescriber s name, address and telephone number, the medication name(s) and details of the prescription(s) in question, and must be signed and dated by the prescriber. In cases where the member contested receipt or the prescriber contested authorizing the prescription, an explanation for the discrepancy must be provided. Telephone prescriptions or prescriptions otherwise generated by the pharmacy will not be accepted as post-audit documentation Corrective Action Plans When an audit reveals a pattern of discrepancies, a pharmacy may be required to submit a Corrective Action Plan (CAP). The form a CAP takes will vary on a case-by-case basis. CAP requirements will be communicated by fax, and pharmacies must submit the required items within 21 calendar days after the request is made. Pharmacies placed on CAPs are monitored to determine whether the identified issues have been remedied. If issues are not resolved, NPS may take additional action as permitted by the Agreement Audit Results If a discrepancy is identified, notification of adjusted or reversed claims will be sent via certified U.S. mail or secure electronic mail to the pharmacy manager or the designated pharmacy chain contact. NPS will furnish detailed audit findings upon request. Such a request must be made in writing and may be faxed to NPS Pharmacy Integrity at Audit reports will include details of any discrepancies identified in claims submissions and of any issues of non-compliance with Federal and State regulations, the Pharmacy Network Agreement, the NPS Pharmacy Provider Manuals. The report will also include recovery amounts and details of reversed or adjusted claims will be included in the report Audit Appeals Pharmacies have 60 days from the date of notification of audit findings to submit an appeal, or an extended time frame as required by regulation. Appeals must be submitted in writing in accordance with the NPS Pharmacy Audit Appeal Form and must include Pharmacy name, claims or prescriptions in question and an explanation of the appeal. The pharmacy may provide documentation to support or justify the identified discrepant audited claims. Documentation that is required to be available at the time of dispensing will not be accepted post-audit. Requests for audit appeals will be reviewed according to NPS audit guidelines. False or incomplete documentation will result in charge backs and possible suspension and/or removal from the NPS pharmacy network. Please refer to the Appendix for an example of the NPS Pharmacy Audit Appeal Form. National Pharmaceutical Services Pharmacy Provider Manual 43

44 Common Reject Code Processing 4.1 Common Reject Codes Common Rejection Codes are noted below: Reject Message "M/I PRESCRIPTION ORIGIN CODE" "PRESCRIPTION ORIGIN CODE REQUIRED" "PRESCRIPTION ORIGIN CODE SENT NOT VALID OPTION" DUR rejection "NDC ON FDA NON- MATCHED NDC LIST" or "Non-Matched Product/Service ID Number" "PHARMACY NOT CERTIFIED FOR DME PRODUCTS" or "PROVIDER NOT ELIGIBLE TO PERFORM/DISPENSE PRODUCT" PROF SVC CODE REQD FOR VACCINE INC FEE Explanation Value sent in NCPDP Field 419 DJ Prescription Origin Code is not valid, please resubmit with codes 1, 2, 3, or 4. For more information see section titled E-prescribing in this document. Please populate the DUR/PPS segment in the NCPDP with the proper DUR codes, for more information see the section titled DUR processing in this document. Please see section 4.5- Non-Matched NDC in this document for more information. Pharmacy is not listed in NPS system as DME POS accredited, if a pharmacy is accredited please call the NPS Help Desk at For more information see the section titled DME POS in this document. To correct this error, Pharmacy will need to populate MA for Medication Administered in the Professional Service Code (NCPDP field ID 440-E5) field NON 0 VALUE REQD To correct this error, Pharmacy will FOR VACCINE ADMIN need to populate Incentive fee submitted field (NCPDP field ID 438- E3) with a valid Incentive fee amount versus a zero or blank amount Reject Message Step Therapy Required Prior Authorization Required Explanation Prescription will require prior authorization for the medication submitted, please call NPS Help Desk at for assistance or refer the Coverage Determination Form (prior authorization form) to the prescriber. Do not advise the participant that the drug is not covered, as coverage is based on medical necessity. Script limit exceeded The cost of the prescription requires that it be reviewed by the NPS clinical team prior to payment. Please call the Help Desk at for assistance or refer the Coverage Determination Form (prior authorization form) to the prescriber. Quantity Limit Days Supply Exceeded The prescription is being submitted for a quantity which exceeds the limits set by the group for this medication. Either reduce the quantity to within the quantity limit accepted value or call the Help Desk at for assistance or refer the Coverage Determination Form (prior authorization form) to the prescriber. Plan may limit fills to 30-day or 90-day supplies. Reprocess for these quantities or call NPS Help Desk at for assistance in determining days supply limit. Compound over Limit The cost of the compound requires that it be reviewed by the NPS clinical team prior to payment. Please call the Help Desk at for assistance. Prescriber not found Please call the NPS Help Desk at for assistance with this rejection. 4.2 DESI Drugs In 1962, the Federal Food, Drug, and Cosmetic Act was amended to require that drugs sold in the United States be regulated more closely. Under the provisions of the Drugs Amendments of 1962 (Public Law ), all new drugs must National Pharmaceutical Services Pharmacy Provider Manual 44

45 be shown by adequate studies to be both safe and effective before they can be marketed. This legislation also applied retroactively to all drugs approved as safe from 1938 to However, the pre-1962 drugs were allowed to remain on the market while evidence of their effectiveness was reviewed. The program established under which the Federal Drug FDA would review the effectiveness of drugs approved between 1938 and 1962 was named the Drug Efficacy Study Implementation program (DESI). The DESI program made rulings on most of the drugs marketed between 1938 and Most of the drugs were allowed to remain on the market, while only a few were removed. DESI drugs are classified numerically into five groups by the Federal Health Care Administration. DESI Group Definitions Group 2: Drug is determined to be safe and effective for indicated uses and for which Medicaid will receive Federal matching funds. Group 3: Drug is classified as largely effective for indicated uses and for which Medicaid will receive Federal matching funds. Example: Lipitor is classified as a DESI level 2 drug. Studies have shown that as a result of taking this medication, it has proven to be safe for use and effectively reduces cholesterol levels. *These two groups are the most effective drugs and all Medicare Part D plans are set at DESI level 3, which means the plan will cover level 3 and lower drugs. Group 4: Drugs classified as possibly effective for indicated uses and for which Medicaid will occasionally receive Federal matching funds. The effectiveness of this type of drug is questionable Group 5: Drugs classified as not effective for indicated uses and for which Medicaid will not receive Federal matching funds. Group 6: New drugs not classified and for which Medicaid will not receive Federal matching funds. *These drugs have proven to have little or no effectiveness. Some examples of this type of drug include: Certain estrogen products Certain suppositories for hemorrhoids and nausea Certain cough and cold medications Certain migraine medications Some Morphine products 4) Frequently Asked Questions: How do I explain the DESI level rejection? Medicare has excluded drugs that are classified as less than effective according to the DESI scale. Federal program funds such as Medicare and Medicaid group funding cannot be used to pay for these types of medications. Therefore, these medications are blocked and there is no way that we can process them for this group. There are no prior authorizations for DESI medications at this time. The member will have to discuss other treatment options with their physician or pay full price (with the knowledge that payment will not apply to their deductible, TrOOP, or total amount spent on their plan). 4.3 Prescriber Validation Pursuant to 42 CFR (k), Part D Plan sponsors must provide certification as to the accuracy, completion, and truthfulness of the claims data submitted for payment purposes which includes requirements on plan sponsors with regard to Part D claims for Scheduled drugs. In order to achieve this requirement, NPS utilizes a system of internal controls to enforce the submission of valid prescriber identifiers from their network pharmacies for these drugs in addition to ensuring that network pharmacies enforce state and federal laws concerning prescriber scope of practice with respect to authority to prescribe controlled substances. These edits are done at point of sale during the adjudication process. NPS will enforce these edits at the point of sale by providing messaging to pharmacies at the point of sale. The following are some of the messages that may be provided: CHECK PHYSICIAN ID, GROUP RESTRICTS MD; PRESCRIBER RESTRICTED FOR SCHEDULED DRUG PRESCRIBER NOT ALLOWED TO WRITE PRODUCT PRESCRIBER ID NOT FOUND - CALL PRESCRIBER ID REQUIRED Additionally, Section 1862(e)(1) of the Act and Federal regulations at 42 CFR (b)(1) prohibit payment under Medicare, Medicaid, and other Federal health care programs for prescriptions written by physicians or other health care professionals who are excluded from Federal health care programs (excluded providers) when the person dispensing the prescription knows or has reason to know of the exclusion until these providers are reinstated. NPS will deny claims for prescriptions written by excluded providers. Pharmacies are required to submit valid prescriber identifiers on all claims submitted. NPS accepts DEA and NPI numbers as valid prescriber identifiers. Whichever type of identifier is used, however, the identifier must be valid and pharmacists are required to ensure that scope of practice and all federal and pharmacy laws are complied with at point of dispensing. Retrospective audits to ensure the validity of claims submissions may be done to ensure the information provided as a part of the claims submission matches the actual prescription record. National Pharmaceutical Services Pharmacy Provider Manual 45

46 The following point of sale edits will continue to be in place and enforced. Point of Sale Edit DEA NPI Check digit validation Prescriber ID Required on Submission i.e., a null submission from pharmacy Correct Field Placement and Identifiers in NCPDP Claims Processing Field must be populated with correct prescriber ID qualifier OIG LEIE Exclusion Valid Prescriber i.e., NPIs and DEAs for pharmacies or facilities are not allowed Controlled Substance Authority Drug is within scope of practice Any of the above noted events will cause a point of sale reject for the prescriber of the claim. NPS is NOT rejecting if a DEA is supplied. NPS does utilize the OIG List of Excluded Individuals and Entities (LEIE) to determine if a prescriber is excluded from participating in Medicare D or other governmental programs. PTI-NPS will exclude any provider on the LEIE from participating in the Medicare D and other government programs that PTI-NPS manages. Updates are coordinated and reconciled monthly or as provided by the OIG. If there is a conflict between the database and the information provided by OIG, NPS will employ secondary source verification to confirm or rule out a match. These methods will include, but are not limited to: h) Reviewing the database of the State Board covering the provider s area of practice and address listed i) Using a search engine to locate other information regarding the provider j) Checking the provider s information in an online telephone directory k) Contacting by phone, , or fax the state board covering the provider s area of practice to verify identity l) Contacting the provider s office by phone to verify by date of birth, UPIN, DEA number, or specialty m) Reviewing the expiration date of the provider s license NPS may also, at its discretion, exclude providers who are sanctioned by state Medicaid programs or named in CMS fraud alerts from serving its Medicare Advantage and Medicare Part D beneficiaries. Alternatively, NPS may enact a payment suspension protocol in the case of claims made by such providers. In the event of payment suspension, NPS will notify Pharmacies according to Section Prescriber Not Found When a pharmacy receives a rejection for prescriber not found they should contact the NPS Help Desk for assistance with adding this prescriber to the NPS system. NPS will credential the provider prior to allowing claims processing OIG Excluded Prescriber The Office OIG was established in the U.S. Department of Health and Human Services to identify and eliminate FWA in the Department's programs and to promote efficiency and economy in Departmental operations. The OIG established a program to exclude individuals and entities affected by various legal authorities, contained in sections 1128 and 1156 of the Social Security Act, and maintains a list of all currently excluded parties called the List of Excluded Individuals/Entities. Basis for exclusion include convictions for program-related fraud and patient abuse, licensing board actions and default on Health Education Assistance Loans. The effect of an exclusion (not being able to participate) is: No payment will be made by any Federal health care program for any items or services furnished, ordered, or prescribed by an excluded individual or entity. Federal health care programs include Medicare, Medicaid, and all other plans and programs that provide health benefits funded directly or indirectly by the United States (other than the Federal Employees Health Benefits Plan). For exclusions implemented prior to August 4, 1997, the exclusion covers the following Federal health care programs: Medicare (Title XVIII), Medicaid (Title XIX), Maternal and Child Health Services Block Grant (Title V), Block Grants to States for Social Services (Title XX) and State Children's Health Insurance (Title XXI) programs. No program payment will be made for anything that an excluded person furnishes, orders, or prescribes. This payment prohibition applies to the excluded person, anyone who employs or contracts with the excluded person, any hospital or other provider where the excluded person provides services, and anyone else. The exclusion applies regardless of who submits the claims and applies to all administrative and management services furnished by the excluded person. There is a limited exception to exclusions for the provision of certain emergency items or services not provided in a hospital emergency room. See regulations at 42 CFR (c). NPS will not allow claims to process for beneficiaries if they have been ordered by an individual on the LEIE. NPS will also not process claims submitted by pharmacies or other providers if they are on the LEIE. If appropriate, inform the member that the prescriber is ineligible and the prescription National Pharmaceutical Services Pharmacy Provider Manual 46

47 is not covered under the Medicare Part D program. For more information go to: Script Over Limit Rejects Plans may have pre-determined limits set at which a prescription will reject if it costs more than a certain amount. Pharmacies will receive a rejection of script limit exceeded. If this occurs please call the NPS Help Desk at for assistance with processing these rejections. 4.5 Non-matched NDC CMS enforces the statutory definition of a covered Part D drug (as specified in Section 1860D-2(e)(1)(A) of the Social Security Act) at the NDC level. There are currently several thousand NDCs that are utilized in the market which do not have proper licensure with the FDA as required by law. Without proper licensure from the FDA, the product cannot affirmatively be established as meeting the FDA review requirements for safety and efficacy and thus would not meet the statutory definition of a covered Part D drug. Therefore, CMS believes it is a best practice for Part D Sponsors to consider the proper listing of a drug product with the FDA as a prerequisite for making a determination on the Part D status of a drug. Owners or operators of establishments engaged in the manufacture, preparation, propagation, compounding, or processing of a drug or drugs must register their establishments and list all drug products for commercial distribution through the FDA drug registration and listing system. Requirements for drug establishment registration and listing are set forth in section 510 of the Federal Food, Drug, and Cosmetic Act (the Act) and section 351 of the Public Health Service Act (the PHS Act), and 21 CFR Part 207. Prescription drug products that are properly listed will appear in the FDA s NDC Directory. Neither the assignment of an NDC number nor inclusion on the NDC Directory denotes FDA approval of the product. Similarly, CMS has not determined that all prescription drug product NDCs listed on the FDA s NDC Directory satisfy the definition of a Part D drug, nor has CMS determined that all non-listed prescription drug product NDCs fail to satisfy the definition of a Part D drug. However, CMS relies on the FDA to make regulatory status determinations regarding drug products and the FDA can only make these determinations if a drug is properly listed. NPS will institute edits that will reject NDCs that are submitted for reimbursement for Medicare Part D plans for NDCs that are not listed on the FDA NDC directory. These NDCs will be determined non-payable. NPS will monitor the FDA NDC Directory and ensure that edits are in place to reflect the most current version of this list as they become available. Claims submitted for any Medicare Part D member covered under NPS s Part D Sponsors with an NDC that is listed on the Non-matched NDC list will reject with: Non-Matched NDC Steps for Pharmacies 1. To determine if a drug product is FDA approved, pharmacies can use the following sources of information: a. Drugs@FDA This listing contains most FDA -approved drug products. b. The National Drug Code (NDC) Directory m htm This listing is limited to prescription drugs and insulin products. Search results from the NDC directory include a column marked Application Number. FDA -Approved products will have an associated NDA or ANDA number in this column. Identification of a drug product as other indicated that the product has not been FDA -approved. c. The Orange Book In this listing, if the product is FDA approved, then the search results will list approved products by dosage form, route, and name of applicant. If the product is not in the FDA approved list, then the results will state no matching records found. 2. If you believe an NDC should be included on the FDA NDC directory and is not, please contact the FDA s Drug Registration and Listing Team at (301) or nonlisted@fda.hhs.gov. You will be asked to provide information on the application of the manufacturer to support your inquiry. 3. If you find an NDC listed on the FDA NDC directory and you feel NPS is improperly rejecting the NDC, please fax a copy of the screen print from the FDA NDC directory along with your contact information to ATTN: NDC Verification. NPS is encouraging all of its network pharmacies to avoid purchasing and stocking prescription drug products for Medicare Part D enrollees that potentially do not meet the statutory definition of a covered Part D drug. It is imperative that pharmacies review their inventory to determine if adjustments in your drug purchasing are needed. Pharmacies can also work proactively with their wholesalers to educate and inform them to work with manufacturers of products that have NDCs that are not properly listed or registered with the FDA. A list of the most current Non-Matched NDC list is available on the CMS website. ( ting_formularyguidance.asp). National Pharmaceutical Services Pharmacy Provider Manual 47

48 4.6 Drug Utilization Review Processing Pharmacies are required to dispense prescriptions to eligible persons in accordance with its pharmacist s professional judgment, quality practice standards, generic drug programs, formulary compliance, disease state management and other clinical management programs implemented by NPS as communicated to the pharmacy via POS technology and all applicable laws and regulations in accordance with Sponsor plan designs. The following are descriptions of the various clinical messages and opportunities displayed via NPS system: drug utilization review messaging, clinical management programs, maximum daily dosage (MDD), drugto-drug interaction, refill too soon edits, DUR conflict, intervention, and outcomes codes and descriptions. Participating pharmacies are required to operate a computer system that provides for the recording of patient drug and medical history as allowed by law and sound pharmacy practice. NPS may require that pharmacies send to NPS, via the online, real-time NPS system, other patient information as might be collected by the pharmacy, under applicable State law, such as diseases, medical conditions, nonreimbursable medications (e.g., OTCs), and allergies. This information should be compatible with DUR messaging received via the NPS system when a claim is being adjudicated. Messaging includes DUR, formulary, and intervention messages transmitted via the NPS system. Participating pharmacies are required, subject to professional judgment, to act upon DUR information provided by message alerts transmitted to the pharmacy via the NPS system. The DUR messaging may not be complete; therefore, the pharmacy should perform its own individual utilization review. Pharmacy s claims transmission system must comply fully with the current standard recognized by the NCPDP (see Appendix). Pharmacies are required to provide intervention resolution and outcome codes to NPS informing NPS of the resolution of DUR alerts and messages transmitted via the NPS system. The DUR reason for service, professional service, and result of service codes follow at the end of this section and are also available from NCPDP and systems software vendors Pharmacy Claims Processing Guidance for DUR In order to maintain safe and effective therapy, NPS will utilize point of sale DUR edits. Depending upon the Plan Sponsor, certain DUR edits may reject or message only. All claims submitted to NPS for processing are subject to point of sale DUR checking to detect potential therapeutic problems. DUR alert messages are returned to the pharmacist for problems discovered by this review. DUR alert messages issued by NPS contain NCPDP standardized codes and language, but may be displayed in various ways, depending on the pharmacy software in use. The purpose of DUR is not to replace professional judgment or individualized patient care in the delivery of health care services but, to enhance it with additional information. The following is guidance from NPS for point of sale DUR edit processing. Pharmacists will be able to use their professional judgment to review and override certain DUR rejections/interactions by identifying and entering the appropriate conflict, intervention and outcome codes for each component. The following illustrates the process for pharmacies to review and respond to point of sale DUR messages. Pharmacist Point of Sale DUR Reject Review Process 1. Pharmacy electronically submits a claim and receives a DUR reject. The DUR reject response will explain the causative factors for the claim reject. 2. The Pharmacist reviews the DUR and will perform an intervention as required by the specific DUR message to resolve the therapeutic issue presented by utilizing one of the following methods: by contacting the prescriber, talking with the patient, and/or using other resources or professional judgment. 3. If the pharmacist decides not to dispense the prescription, the pharmacist accepts the reject and does not resubmit claim and does not receive payment for the claim. The pharmacist will then take appropriate action to discuss the claim and the reason for not filling with the patient and/or prescriber and utilize the pharmacist s professional judgment. 4. If the pharmacist decides to resolve the DUR and dispense the prescription, the pharmacist resubmits the claim with a DUR Conflict/Reason for Service Code, DUR Intervention code, and DUR Outcome code populated on the claim. In some cases, correcting the claim, if an invalid days supply or dosage was entered, may resolve the DUR edit entirely and not require the submission of the DUR claim segment. 5. If the response is appropriate for the intervention provided, the pharmacist will receive a paid claim if the DUR documentation provided on the claim was accepted. 6. Pharmacists are responsible for documenting any discussion with the prescriber and/or member in a written format that the Pharmacy can readily retrieve to support the clinical interaction and outcome completed as a result of the DUR edit. Pharmacy Claims Processing Requirements In order to override point of sale DUR rejection edits, the pharmacy provider will need to utilize the DUR/PPS segment in the NCPDP Telecommunications Standard. These are standard fields in NCPDP. Any pharmacy provider that is having trouble accessing these fields should contact their software vendor for further clarification. 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49 NCPDP Field Field Name Description Acceptable Values (value to be populated bolded) 439-E4 DUR Conflict/Reason for Service Code 440-E5 DUR Professional Service Code This code identified the type of conflict detected or the reason for the therapeutic issue. This code defines the pharmacist s intervention when a conflict code has been identified. DA Drug Allergy Alert DD Drug/Drug Interaction ER Overuse Precaution HD HI Dose Alert ID Ingredient Duplication LD Low Dose Alert MC Drug/Disease Alert MN Insufficient Duration MX Excessive Duration PA Drug/Age Precaution PG Drug/Pregnancy Alert SX Drug/Gender Alert TD Therapeutic Duplication M0 - Prescriber consulted PE - Patient education P0 - Patient consulted R0 - Pharmacist consulted other source 441-E6 DUR Outcome Code/Result of Service Code This code defines an action by the pharmacist in response to a conflict code, or the result of a pharmacist s professional service. 1A - filled as is, false positive 1B - filled prescription as is 1C - filled with different dose 1D - filled with different directions 1F - filled with different quantity 1G - filled with prescriber approval NOTE: Intervention Codes contain the number zero. M(zero), P(zero), R(zero). Using the letter O will cause the claim to deny. If you have any questions about our DUR point of sale edit processing policy please contact Help Desks at , 24 hours a day, 7 days a week. TTY/TDD users should call Clarified DUR Definitions: Reason for Service Codes and Descriptions DA: Drug Allergy- Indicates that an adverse immune event may occur due to the patient s previously demonstrated heightened allergic response to the drug product in question. DD: Drug-to-Drug Interaction - Detects drug combinations in which the net pharmacological response may be different from the result expected when each drug is given separately. ER: Overuse Early Refill or Refill Too Soon - Detects prescription refills that occur before the days supply of the previous filling should have been exhausted. HD: High Dose (Exceeds Maximum Daily Dose) - Detects drug doses that fall above the standard dosing range. ID: Ingredient Duplication - Detects simultaneous use of drug products containing one or more identical generic chemical entities. MC: Drug Disease (Reported/Actual) - Indicates that the use of the drug may be inappropriate in light of a specific medical condition that the patient has. Information about the specific medical condition was provided by the prescriber, patient or pharmacist. MN: Insufficient Duration - Detects regimens that are shorter than the minimal limit of therapy for the drug product based on the product s common uses. MX: Excessive Duration - Detects regimens that are longer than the maximal limit of therapy for the drug product based on the product s common uses. PA: Drug Age - Detects when a prescribed drug is contraindicated based on the patient s age. PG: Drug Pregnancy - Detects when a prescribed drug is contraindicated for use by a pregnant woman. This information is intended to assist in weighing the therapeutic value of a drug against possible adverse effects on the fetus. SX: Drug Gender - Detects when a prescribed drug is contraindicated or inappropriate for use based on the patient s sex. TD: Therapeutic Duplication - Detects simultaneous use of different primary generic chemical entities that have the same therapeutic effect. LD: Low Dose (Under Minimum Daily Dose) - Detects drug doses that fall below the standard dosing range. National Pharmaceutical Services Pharmacy Provider Manual 49

50 Clarified DUR Definitions: Result of Service Codes and Descriptions 1A: Filled As Is, False Positive - Identified and conflict determined not to be valid. 1B: Filled Prescription As Is - Identified conflict determined to be insignificant without contacting the prescriber. 1G: Filled with Prescriber Approval - Conflict identified was valid and potentially significant. Resolution required consultation with the prescriber. Example How to Resolve a High Dose Alert If the pharmacy receives a Maximum Daily Dosage Rejection Code message via the NPS system when submitting a claim, the following steps need to be taken: Verify that the days supply and quantity dispensed are correct. Contact the prescriber to confirm the dosage. Document the conversation on the original prescription. Document on the hard-copy prescription: a) the reason for the override; b) the authorization code, if applicable; c) the name of the NPS representative, if applicable. Once the above steps are completed, enter 02 in the Submission Clarification Code Field, field number 420-Dk, and retransmit. Follow the pharmacy system s software protocols. Note: No default override codes are permitted on an initial inbound claims transaction. Example How to Resolve a Drug-to-Drug Interaction If the pharmacy receives a DUR Reason for Service message via the NPS system for Drug-to-Drug interactions, the following steps need to be taken: 1. Contact the prescriber to discuss the potential Drug-to- Drug interaction. 2. If the prescriber approves the prescription to be dispensed with no change after the alert, resubmit the claim using all three of the following Codes: a. DUR Reason for Service Code = DD (Drug-to-Drug interaction) b. DUR Professional Service Code = MO (Prescriber Consulted) c. DUR Result of Service Code = 1G (Filled, with Prescriber s Approval) Note: No default override code permitted on an initial inbound claims transaction unless the pharmacy has detected the Drugto-Drug interaction and contacted the prescriber. THE INFORMATION PROVIDED BY THE NPS SYSTEM IS INTENDED TO SUPPLEMENT THE KNOWLEDGE OF PHARMACIES AND PRESCRIBERS. PROVIDER IS RESPONSIBLE FOR CONDUCTING ITS OWN DUR OUTSIDE OF THE NPS MESSAGING SYSTEM. 4.7 Part B versus Part D Overlap Drugs When submitting a claim for a drug that could be covered under either the Part B or Part D program for either an MAPD or a PDP, the point of sale rejection will be: Reject 75: May be covered under Part B or B vs. D Determination Some steps that a pharmacy should consider in determining whether to bill Part B or Part D are: Determine the diagnosis for the use of the drug by speaking with the member or by contacting the prescriber. If the diagnosis is covered under Medicare Part B, ask the member if he/she has Part B coverage. If the member does not have Part B coverage, Medicare Part D will not cover the drug that should be covered by Part B. If the diagnosis is not covered under the Part B benefit call the NPS helpdesk to determine whether to bill the claim under the member s Part B or Part D benefit. NPS will verify with the pharmacist that the documentation of the diagnosis on the prescription supports coverage of the drug under Medicare Part B or Part D. In institutional settings, NPS will also accept from the pharmacist the diagnosis documented in the medical record by the physician. o If diagnosis is consistent with Part D coverage, NPS will enter an override to allow the claim to adjudicate. o If diagnosis is not consistent with Part D coverage, an approval will not be granted under Medicare Part D. o Pharmacy should follow its normal Medicare Part B claims process. When receiving the NCPDP Rejection messaging described above, it is the pharmacy s responsibility to ensure that the member receives his/her benefit and that the claim is submitted to the appropriate Medicare program. Medicare Part D covers drugs available only by prescription, approved by the FDA, used for a medically accepted indication, and that are not covered under Part A or Part B. The Medicare Prescription Drug Benefit Manual, Chapter 6, Appendix C provides guidance on whether to bill Part B or Part D for many medications and products. Selected guidelines follow: Injectable drugs that are dispensed for a specific patient and delivered to a provider s office for administration should be billed to Part D. Injectable drugs that are dispensed to a provider for the provider s supply but are not designated for a specific patient may not be submitted as claims to NPS but should instead be billed to Part B by the provider s office. Influenza vaccine, pneumococcal vaccine, and hepatitis vaccines for high/intermediate risk individuals should be National Pharmaceutical Services Pharmacy Provider Manual 50

51 billed to Part B; most other vaccines should be billed to Part D. Diabetes testing supplies (meters, test strips, and lancets) should be billed to Part B. Supplies used to inject insulin (syringes, pen needles, and alcohol swabs) should be billed to Part D. Insulin should generally be billed to Part D; the exception is when it is used in an insulin pump, in which case it should be billed to Part B. Insulin pump supplies should be billed to Part B. Pharmacies should consult the Medicare Prescription Drug Benefit Manual at Coverage/PrescriptionDrugCovContra/PartDManuals.html for the most comprehensive and up-to-date information ESRD Drugs CMS has identified classes of drugs typically used by a dialysis facility in treating ESRD that should be included under the facility billing to Medicare Part B and not under the Medicare Part D benefit. NPS uses an eligibility indicator provided by CMS to provide NPS messaging for actions that need to be taken when members who have ESRD fill a claim for a prescription that is used in the treatment of ESRD. The table below identified the five classes of drugs that, according to CMS are always used for the treatment of ESRD for patients on dialysis and are not covered by the Part D plan. as part of the facility billing. Only Medicare Part D eligible claims for Medicare Part D covered services should be transmitted. Not all dialysis facilities receive the bundled billing. In these situations, it is appropriate for the member to continue to receive his/her ESRD drugs under the Part D benefit. Drug Category Access Management Description Drugs used to ensure access by removing clots from grafts, reverse anticoagulation if too much medication is given, and provide anesthetic for access placement. Anemia Management Drugs used to stimulate red blood cell production and/or treat or prevent anemia. This category includes erythropoiesis stimulating agents (ESAs), as well as iron. Anti-infectives Bone and Mineral Metabolism Vancomycin and daptomycin used to treat access site infections. Drugs used to prevent/treat bone disease secondary to dialysis. Cellular Management Drugs used for deficiencies of naturally occurring substances needed for cellular management. This category includes levocarnitine. When the drug is not being used for treatment of ESRD, it is appropriate to cover it under the Part D benefit. Pharmacy must ensure that claims for ESRD drugs are not processed through NPS electronic system when the drugs are covered National Pharmaceutical Services Pharmacy Provider Manual 51

52 Claim Override Processes 5.1 Vacation Override In certain circumstances NPS may allow an override on refill too soon rejections for members going on vacation. Vacation supply can only be used when the group allows vacation supply override and the member will be gone before or during the date to refill. Please note that if the plan only allows 30 days supply at retail and the pharmacy is trying to submit 60 days since the member is going to be gone 2 months, they will need to process each month s supply separately. Please call the NPS Help Desk to determine whether the member s group allows such an override and whether the member is eligible. If the plan allows, the Pharmacy may utilize a value of 03 in the Rx Clarification Field. Other Rx Denial Over-ride codes may be allowed on the Plan Sponsor basis. Please contact the NPS Call Center for additional information. 5.2 Lost Scripts/Stolen Override In certain circumstances NPS may allow a one-time override on refill too soon rejections for lost or stolen prescriptions. Please contact the NPS Help Desk to determine whether the member s group allows such an override and whether the member is eligible for the override. If the plan allows, the Pharmacy may utilize a value of 04 in the Rx Clarification Field. Other Rx Denial Over-ride codes may be allowed on the Plan Sponsor basis. Please contact the NPS Call Center for additional information. 5.3 Transition Override Transition Override- Managed Groups NPS Managed Group Health Organizations have the option of offering a one-time transitional override for non-formulary drugs within the first 90 days of enrollment to ensure members receive their medications while determining coverage. Current NPS managed groups that allow this added benefit include Managed Medicaid enrollees. Please Contact an NPS Help Desk representative to determine eligibility of this added benefit for Managed Medicaid enrollees managed by NPS Transition Override- Part D Groups CMS required all Medicare Part D Sponsors to establish a Transition Program to address the needs of beneficiaries who are stabilized on certain drug regimens and to assist in the education of beneficiaries on what drugs are covered by their Part D plan. The goal of the Transition Program is to prevent interruption in therapy for beneficiaries while they establish an appropriate transition from maintenance non-formulary drugs or maintenance medications that require step therapy, quantity limitations or prior authorization to a product that is on the Plan Sponsor s formulary. Transition supplies are provided for the following types of enrollees: New enrollees into prescription drug plans at the beginning of the contract year Newly eligible Medicare beneficiaries from other coverage at the beginning of the contract year Individuals who switch from one plan to another after the beginning of a contract year Enrollees residing in LTCFs Existing enrollees who have an unplanned transition and change treatment settings due to a change in their level of care In some cases, current enrollees affected by formulary changes from one contract year to the next. Transition and emergency supplies process automatically at the point of sale. NPS will administer a point of sale transition process will be applied at the point of sale for at least a onetime temporary 30-day fill (unless prescription is written for less than 30 days in which case multiple refills to provide up to a 30-day supply of meds are allowed when required) anytime during the first 90 days of a beneficiary s enrollment in a plan, beginning on the enrollee s effective date of coverage or up to 31 days supplies in the Long Term Care Setting) to meet this CMS requirement. For new and existing beneficiaries they must be within their first 90 days of enrollment with the Part D Plan Sponsor and only for one 30- day supply of medication (unless the prescription is written for a lesser days supply). If the NPS Point of Sale System determines a Member is eligible for a transition supply (at retail or long term care) or an emergency supply (at long term care), the Claim is automatically paid with the message of Transitional Fill 1x Only. The Claim will reject if the quantity and days supply submitted exceed the plan s benefit design, safety limitations, or if the claim submitted is not for an eligible drug. Program Overview To be eligible for coverage under the Transition Program, the medication must be classified as a Part D drug. Medications that are not eligible for coverage consideration are National Pharmaceutical Services Pharmacy Provider Manual 52

53 medications that are statutorily excluded under section 1927(d)(2) or (d)(3) are as follows: Agents when used for anorexia, weight loss, or weight gain. Agents when used to promote fertility. Agents when used for cosmetic purposes or hair growth. Agents when used for the symptomatic relief of cough and colds. Agents when used to promote smoking cessation (NOTE: Part D covers). Prescription vitamins and mineral products, except prenatal vitamins and fluoride preparations. Nonprescription or over the counter drugs Covered outpatient drugs which the manufacturer seeks to require as a condition of sale that associated tests or monitoring services be purchased exclusively from the manufacturer or its designee. Barbiturates (unless used for a Part D indication). Medications for erectile dysfunction (ED) Medications in which the primary usage would most likely be covered under Medicare Part B Transition Benefit Tier Assignment If the Transition Benefit applies, the claim will be allowed to process at a designated tier. This tier is designated by group specific settings. Based on the drug being processed, a formulary tier is designated. It is important to inform Members and/or prescribers of the temporary nature of the transition or emergency supply. Pharmacies can assist Members in submitting an exception request or changing to a formulary alternative by consulting with the Plan s Formulary. Following the fill of a transitional medication, letters will be generated and mailed to the prescriber and the member within 3 business days to advise of the possible future denials and to communicate the exceptions process. 5.4 Florida Medicaid Hernandez Settlement The Hernandez Settlement was the result of a lawsuit (Hernandez, et al v. Medows case number Civ- Gold/Simonton) in which a Florida Medicare member was unable to receive his medication with deleterious results. Effective May 14, 2004, Florida Medicaid providers are required to post documentation regarding patient options when a medication is denied. Pharmacies are obligated to provide information pamphlets that detail the rights of the recipient. Notices must be posted in both English and Spanish. Florida Medicare members are eligible for an emergency 3 days supply of medication when: Prescription was for the exact prescription that Medicaid paid for in the previous month. The pharmacist believes the member should receive the medication to prevent serious harm. The pharmacist believes the member could be hospitalized if they did not receive the medication. The member has a serious contagious disease. Please contact the NPS Help Desk if you believe a member may be eligible for an emergency 3 days supply of medication. A NPS Help Desk representative will be able to obtain a 3-day supply through the Hernandez settlement and may initiate the prior authorization process. An Ombudsman is a person who investigates complaints and mediates fair settlements between aggrieved parties such as consumers and an institution. If the pharmacy or physician is unable to resolve the problem obtaining the medication, the Ombudsman should be contacted. An Ombudsman office may differ per Medicare plans. Please call a Help Desk representative at NPS for the Ombudsman contact number. Patient name, date of birth, Medicaid number, phone number, name of medication, name and phone number of pharmacy and physician, and reason for non-coverage should be readily available when contacting the Ombudsman. In the event the Ombudsman is not able or willing to address the problem obtaining the medication, the member may request a fair hearing. The 3 day emergency supply of medication may be repeated one time. If a Florida Medicare member has requested a fair hearing they may request ongoing coverage of their medication while awaiting a decision. NPS assists our plans in facilitating a process for ensuring NPS Call Center Representatives, Clinical/Medical Staff and Network Pharmacies are aware of the Hernandez Settlement Agreement (HSA) provisions to ensure that the enrollees are receiving the functional equivalent of those goods and services received by Florida Medicare recipients in accordance with the HSA. NPS does distribute the notice along with directions for use and posting of the notice to network pharmacies at time of contracting. NPS conducts annual HSA surveys of no less than five percent of all participating pharmacy locations to ensure that pharmacies are compliant with the Hernandez Settlement requirements. Pharmacy understands that the Florida Agency for Health Care Administration entered into a settlement agreement (the Hernandez Settlement Agreement) relating to the type of notification a pharmacy must give a Medicaid recipient when the pharmacy refuses or is unable to fill a prescription (i.e., an unreasonable delay in filling the prescription; a denial of the prescription; the reduction of a prescribed good or service; and/or termination of a prescription). National Pharmaceutical Services Pharmacy Provider Manual 53

54 Under the Hernandez Settlement Agreement, Member Pharmacy must comply with the following when serving Florida Medicaid recipients: 1. Member Pharmacy must post signs advising Medicaid recipients that if reimbursement for their prescription drug(s) is initially rejected, they will be given written information by the Member Pharmacy, including a pamphlet, that will tell them the reason their drug claim reimbursement was rejected and what they can do about it. 2. Member Pharmacy must provide notice to recipients whose claim reimbursement for a prescription drug is rejected by way of either a printed copy of the computer screen stating the reason(s) for rejection, or by writing the reason(s) for claim reimbursement rejection and the date of the rejection on the pamphlet which must be given to the recipient. 3. For those recipients not physically present in the pharmacy when claim reimbursement is rejected for the recipient s claim, such as recipients who have a relative pick up medicines for them, Member Pharmacy must deliver the pamphlet (and copy of computer screen, where appropriate), containing the reason(s) for rejection to the recipient via the same means by which the prescription medication would have delivered (e.g., mail, personal delivery). 4. The required written notice can either be provided to the recipient or to a person acting on behalf of a recipient as specified in HIPAA, and such notice must be made in accordance with applicable law and HIPAA procedures. 5. Member Pharmacy must provide all recipients whose prescription drug claim reimbursement has been rejected with a copy of the applicable pamphlet issued by the Agency for Health Care Administration of the State of Florida, which is available from the Agency for Health Care Administration of the State of Florida. 5.5 Refills in Declared States of Emergency or Disasters Group Health NPS allows emergency refills in a natural disaster or emergency area at the discretion of Group Health organizations. An area may be declared an emergency or major disaster by the President, or the Secretary of the Department of Health and Human Services may declare the area a public health emergency. Pharmacies may be able to override refill to soon rejections when a submission clarification code of 13 is submitted by the pharmacy and is accepted by plan design. To determine eligibility for early refill overrides and other benefits allowed during a natural disaster please contact the NPS Help Desk Part D Plans Medicare health plan members have special rights to get outof-network care and refill too soon overrides if they live in an area where one of the following is true: An area where the President has declared an emergency or major disaster. Visit to find out. An area where the Secretary of the Department of Health and Human Services (DHHS) has declared a public health emergency. Visit or call MEDICARE ( ) to find out. TTY users should call If members had to leave their home without their prescription drugs, or their prescription drugs have been damaged or lost as a result of the disaster, they won t be required to go to their usual network pharmacy for a replacement supply. NPS will temporarily allow early refills to members by temporarily removing refill too soon edits. Refill too soon rejections may be overridden at the point of sale by the pharmacy in emergency situations by submitting a submission clarification code of 13 in their claim transmission per NCPDP Guidelines. With the possibility of limited numbers of pharmacies available, limitations on travel, and the possibility of disruption of the US Mail service, members shall be allowed to obtain the plan s maximum allowable days supply of medication or an extended days supply of medication if the plan s limits allow for an extended days supply at the equivalent plan copayments, if requests and available due to allowable refills or other state and/or federals laws on product dispensing. The time period for the waiver of prescription medications refills may be extended by emergency orders issued by the Office of Insurance Regulation. NPS will comply with any extension issued. Please call the NPS Help Desk to determine whether a member qualifies for refill overrides in a natural disaster. Out-of-Network Pharmacies If a member can t reasonably get to a network pharmacy, the plan will have rules for getting drugs in an emergency at an out-of-network pharmacy. The member may be required to pay more for prescription drugs at an out-of-network pharmacy than they would at a network pharmacy. Members should be informed to retain receipts for medications in which they paid full cost. They may be eligible for a refund via paper claim submission. MAPD claim responses will have benefit stage qualifier values that have been approved through the NCPDP External Code List (ECL) process. These qualifier values will allow pharmacies to identify MAPD plans that offer additional benefits besides Part D covered drugs: The Medicare Advantage (MA) portion of the MAPD plan = Benefit Stage Qualifier (393-MV) value of 50 (Not paid under Part D, paid under Part D benefit for MAPD plan). National Pharmaceutical Services Pharmacy Provider Manual 54

55 Employer Group Waiver Plans (EGWPs) and supplement plans where Part D and non-part D supplemental benefits are co-administered = Benefit Stage Qualifier (393-MV) value of 60 (not paid under Part D, paid as or under a supplemental benefit only). Negotiated Price Non-formulary Part D drug = Benefit Stage Qualifier (393-MV) value of 70 (Part D drug not paid by Part D plan benefit, paid by the beneficiary under plansponsored negotiated pricing). Negotiated Price Non-Part D Drug = Benefit Stage Qualifier (393-MV) value of 80 (Non-Part D drug not paid by Part D plan benefit, paid by the beneficiary under plan-sponsored negotiated pricing). These benefit stage qualifiers are not applicable to standalone MA plans and PDP plans; these plans will have separate 4Rx since they may be sold independently (a beneficiary can choose to use one company s MA and another company s PDP Temporary Pharmacy Facilities Temporary pharmacy facilities and mobile pharmacies that operate in disaster areas and submit claims for reimbursement by NPS are subject to the regulations set forth by the applicable State Board of Pharmacy. National Pharmaceutical Services Pharmacy Provider Manual 55

56 Utilization Management Programs 6.1 Step Therapy Step Therapy programs require the use of one or more first line drugs before a medication subject to step therapy is utilized. The goal of step therapy is to ensure that safe and cost-effective drugs are utilized based on nationally accepted treatment protocols or well documented clinical drug studies. The criteria has been established based upon a review of currently available clinical information (including clinical outcome studies in the peer-reviewed published medical literature, regulatory status of the technology, evidencebased guidelines of public health and health research agencies, evidence-based guidelines and positions of leading national health professional organizations, views of physicians practicing in relevant clinical areas and other relevant factors). Step therapy is a process by which coverage of a drug is dependent upon the prior use of a different, firstline drug. No paperwork is involved in this process, it is handled electronically through the pharmacy claims system. These criteria are revised on an on-going basis as clinical information changes and new guidelines and standards of care are updated. Please refer to point of sale claim messaging to determine alternative agents. 6.2 Quantity Limits Quantity limit programming has become an acceptable pharmacy plan practice that may be appropriate to place on some medications. The intentions are to safeguard members health and save plan benefit dollars. This program ensures members do not receive a prescription for a quantity that exceeds recommended plan limits. Limits are set because some medications have the potential to be abused, misused, shared, or have a manufacturer s limit on the maximum dose. These limits have been reviewed by our clinical and medical staff, and the Pharmacy and Therapeutics Committee. The quantity limits are based on FDA approved dosing schedules, current medical practices, evidence based clinical guidelines and peer-reviewed medical literature related to that particular drug. The inclusion of a medication on this list does not imply coverage under all plans, nor does the inclusion of a dispensing limitation imply that your specific benefit plan also has the same limitation. Plans may elect their own limitations. 6.3 Prior Authorization To promote appropriate utilization, selected high-risk or highcost medications may require prior authorization to be eligible for coverage under the member s prescription drug benefit. The P&T Committee has established prior authorization criteria. For questions concerning utilization management requirements, Medicare Part A (Part A), Medicare Part B (Part B) or Medicare Part D (Part D) decisions, coverage limitations and prior authorizations (PA), please call the NPS Help Desk. In addition, should the pharmacy receive a rejection of Prior Authorization Required, please call the NPS Help Desk so that we may advise how the prescriber can initiate the prior authorization process. Pharmacies may also assist by contacting the prescriber to review the reason for the prior authorization or by notifying the prescriber how to initiate the prior authorization request procedure. Pharmacies may not initiate prior authorization requests nor submit coverage determination forms to NPS. 6.4 Pharmacy Provider/Lock-in Program Managed Patient case reviews may be conducted following notification that a member may be over or under-utilizing medications. This may include, but is not limited to, narcotic medications used to treat pain. A patient case review may be requested by a group Sponsor, a provider, pharmacist, customer service representative or clinical review specialist. Once a review is completed it may be appropriate to limit the member to one pharmacy and/or provider. Pharmacy and/or provider lock in is only allowed in cooperation and agreement from the plan Sponsor. Please contact the NPS Help Desk if you would like to request a patient case review or have any further questions regarding the Pharmacy/Provider Lock-in Program Part D MEDICs HIPAA included provisions to establish the Medicare Integrity Program (MIP), and gives CMS specialty contracting authority to promote the integrity of the Medicare Program. The specialty contractors are known as Program Safeguard Contractors (PSCs). Medicare Drug Integrity Contractors, or MEDICs, are CMS contractors that manage CMS s audit, oversight, and anti-fraud and abuse efforts specifically in the Medicare Part D benefit. Fundamental activities of MEDICs include conducting complaint investigations, performing data analysis efficiently and proactively to evaluate inappropriate activity, developing and referring cases to the appropriate law enforcement agency or taking administrative action as National Pharmaceutical Services Pharmacy Provider Manual 56

57 appropriate, support ongoing law enforcement investigations, conduct audits, and review PDP and MAPD fraud and abuse compliance programs. Each Part D Sponsor has an account manager in charge of CMS policies. The Account Manager is responsible for what actions are permissible under CMS guidelines, in regards to FWA. It is CMS s stance that they do not support lock-in of beneficiaries to a specific provider or pharmacy. However, the Sponsor account manager may have other recommendations for investigating potential fraud. The MEDIC Project Officer recommends that once those beneficiaries demonstrating doctor shopping, pharmacy shopping or fraud and abuse are identified, the information should be sent directly to the MEDIC, who may choose to take action in regards to law enforcement. In order to aid in the abuse investigation process, the MEDIC has access to all patient records in regards to Part D members, and are not limited to specific Sponsor s information serviced by a particular PBM. For questions regarding the MEDIC s please contact the MEDIC project officer at Look-Alike, Sound-Alike (LASA) Medications The Institute for Safe Medical Practices (ISMP) publishes a list of confused drug names noted in the ISMP Medication Safety Alert! and a list of high-alert medications that can cause significant patient harm if used in error ( During visits, prescribers and patients should have thorough discussions so that when patients leave their prescribers' offices, they are completely familiar with the name and purpose of each medication prescribed. The prescriber should write each drug's indication on the prescription. At the pharmacy, the indication should be checked against the drug and the prescription label. If the indication does not match what the patient expects, the patient should consult with the physician or pharmacist. When a medication is considered for addition to formulary, the USP's LASA list should be consulted. If a potential soundalike drug is already on formulary, the less necessary drug in the LASA pair (e.g., hydroxyzine and hydralazine) could be removed. All pharmacy professionals should track LASA medication errors and report them. More recommendations for preventing LASA mix-ups can be found in the Joint Commission National Patient Safety Goals: gs.aspx. NPS maintains a series of Administrative and Safety edits on prescribed drugs to monitor for safety issues associated with medications. NPS frequently surveys pharmacies on their efforts for medication safety. We highly encourage your pharmacy to participate in these surveys by returning them if your pharmacy is selected. 6.6 MedWatch Forms Pharmacies are reminded to report any adverse event or medication error, in compliance with Medicare Part D error and prevention standards, and may further report any adverse event to the FDA MedWatch Program. MedWatch is a program to report product quality problems associated with the use of: FDA-regulated drugs, biologics (including human cells, tissues, and cellular and tissue-based products) medical devices (including in vitro diagnostics) special nutritional products and cosmetics MedWatch forms can be accessed on-line at General Covered Benefits A valid prescription order from an authorized prescriber must be on file for any item to be a covered benefit with the exception of certain over the counter products. NPS generally provides benefits for Insulin and Federal Legend Drugs or State Restricted Drugs, unless specifically excluded by the Plan Sponsor. Such coverage must be confirmed on a planby-plan basis. Please rely on online system messaging for medication coverage. Federal Legend Drugs are any drugs required to bear the legend, Caution, Federal Law prohibits dispensing without a prescription. This includes compounded medications containing at least one ingredient which is a Federal Legend Drug as defined under the amended Federal Food, Drug, and Cosmetic Act. Injectable medications are a covered benefit when the prescription meets other plan requirements (i.e. Federal Legend or State Restricted Drugs) and not otherwise an excluded benefit. 6.8 General Benefit Exclusions Items generally excluded from coverage are based upon the plan design selected by the Plan Sponsor. Pharmacy will receive a message at the POS indicating that the item is excluded or not covered. Always adjudicate the claim to determine coverage before advising a member that an item is not covered. Typical plan benefit exclusions are as follows except where mandated by law. The following list is for example only and National Pharmaceutical Services Pharmacy Provider Manual 57

58 does not constitute a complete list of exclusions which may exist in a plan benefit: Unit Dose NDCs Durable Medical Equipment Non-legend drugs (except insulin) Charges for injection or administration of a drug Drugs which are entirely consumed at the time and place of prescribing Prescriptions which are covered under workers compensation law or which are covered without charge under any government program Experimental drugs or drugs labeled "Caution - limited by Federal law to investigational use" Medication which is to be taken by or administered to a beneficiary while a patient is in a licensed hospital, nursing home, or similar institution, which operates or allows to be operated on its premises a facility for dispensing pharmaceuticals Refills in excess of the number specified or authorized by the prescriber or any refill dispensed after one year from the prescriber's original order Mailing and delivery charges (standard delivery services are included) Drugs which were distributed by the manufacturer as samples Unapproved uses of drugs i.e., uses that are not approved by the United States FDA or peer-reviewed medical journals Prescription medications determined to be less than effective by DESI Repackaged NDCs 6.9 Formularies The use of a formulary is an essential tool for plan Sponsors in managing their prescription drug benefit program. Pharmacies play an essential role in ensuring rational and cost-effective therapy utilization by utilizing best efforts to encourage formulary compliance. NPS will provide point of sale messaging to assist pharmacies in the formulary status of a medication or alternative formulary medications. Pharmacies should refer to the on-line claim messaging for additional information regarding preferred or non-preferred drugs. If an agent is non-preferred, alternative agents will be listed in the claims messaging segment. Since some members may be managed by differing formularies, please rely on the formulary messaging to indicate appropriate formulary alternatives. If a generic equivalent drug cannot be substituted, contact the prescriber to determine if a drug from the drug formulary can be dispensed as an alternative. NPS reserves the right to classify medications as generics, provided the medications meet certain criteria. Formulary Changes Please refer to your Pharmacy Network Agreement with NPS for specific requirements regarding compliance with NPS or a plan sponsor s formulary and related NPS programs. For information regarding formulary changes, including but not limited to removal of a covered drug from the formulary or changes to the preferred or tiered cost-sharing status of a covered drug, please refer to NPS s helpdesk or, as applicable, the website of the plan sponsor. Notwithstanding the foregoing, immediate removal of a drug deemed unsafe by the FDA or removed from the market by the manufacturer may be necessary. Medicare Part D Negative Formulary Change Notice Notice of Negative Formulary changes will be available online and disseminated through online messaging to Network Pharmacies. In certain cases for the FDA market withdrawals, the notice may not be retrospective. The posting will include: The name of the affected covered Medicare Part D drug Information on whether the covered Medicare Part D drug is being removed from the formulary, or adversely changing its preferred or tiered cost-sharing status The reason why the covered Medicare Part D drug is being removed from the formulary, or changing its preferred or tiered cost-sharing stats Alternative drugs in the same therapeutic category, class or cost-sharing tier, and the expected cost sharing for that drug The means by which members may obtain an updated coverage determination or an exception to a coverage determination Affected members will also be notified in the Explanation of Benefits (EOB) about a formulary change 60 days before it takes effect. Medicare Part D Annual Notice of Change Each fall continuing members receive a combined Annual Notice of Change (ANOC)/Evidence of Coverage (EOC) packet from their Plan Sponsor(s). Packet materials identify changes in the drug plan for the coming year. Changes explained in the packet become effective January 1 and will apply through December 31 of the upcoming plan year. A Member may notice that a Formulary medication he or she is currently taking is either not on the upcoming year s formulary or its cost-sharing coverage is limited in the upcoming year. Sponsor will work to prospectively transition current Members who are affected by negative formulary changes in the new contract year. If the Member is unable to transition to another product prior to the new benefit year, the Member will be entitled to a one (1) time transition fill during the first 90 days of the new benefit year. Refer to Section 5.31 National Pharmaceutical Services Pharmacy Provider Manual 58

59 Transition Override of Part D groups for full further information on the Medicare Part D transitional benefit. Medicare Part D Coverage Determinations Coverage determinations allow requests for exceptions to waive coverage restrictions or limits applied through prior authorization (PA), step-therapy (ST), quantity limits (QL), and Medicare Part A/Part B/Part D coordination. Prescriber may request an exception. If the Benefit Plan or Sponsor approves an exception request, the approval is valid for the remainder of the plan year, unless clinically inappropriate or unnecessary, so long as the prescribing physician continues to prescribe the medication and it continues to be clinically appropriate and necessary, safe and effective for treating the condition. Standard coverage determination requests are generally provided within 72 hours of receipt Sponsor has not provided an answer within 72 hours after receiving a request, the request will be automatically forwarded to an independent organization called an Independent Review Entity (IRE) for review. If the member s life, health, or ability to regain maximal function may be jeopardized and requires a more immediate decision, the Member can request to expedite the request. Expedited coverage determinations are provided no later than 24 hours of receipt of the request, or, for an exceptions request, the physician s supporting documentation. Pharmacies may not initiate prior authorization requests nor submit coverage determination forms to NPS. Refer to CMS for information about coverage determination appeal rights Therapeutic Interchange The use of therapeutic interchange programs as part of a comprehensive approach to quality, cost-effective patient care is recommended. Therapeutic interchange is the practice of replacing, with the prescribing physician s approval, a prescription drug originally prescribed for a patient with a prescription drug that is its therapeutic equivalent. Two or more drugs are considered therapeutically equivalent if they can be expected to produce identical levels of clinical effectiveness and sound medical outcomes in patients. The term therapeutic interchange must be distinguished from the term therapeutic substitution. Therapeutic substitution has been defined as a practice in which the pharmacist can substitute any AB rated generic drug for the brand drug prescribed, without the approval of the prescriber. Therapeutic interchange involves the collaboration of pharmacists and prescribers in reviewing available drug products with equivalent therapeutic effects in order to provide patients with the safest, most rational, and most costeffective drug therapy. Therapeutic interchange ensures that prescribers are informed regarding drug therapy options. The prescriber retains the authority to decide upon the patient's ultimate therapy. Therapeutic interchange programs are guided by clinically-based prescribing guidelines that are reviewed by the P&T Committee. However, therapeutic interchange is not always about lower drug costs. Therapeutic interchange often occurs when overall healthcare savings can be achieved. Replacing one drug with a more expensive one may result in fewer treatment failures, better patient adherence to the treatment plan, and fewer side effects. Such efficient use of medical resources helps keep medical costs down, improves the patient s access to more affordable healthcare, and enhances the patient s quality of life. Therapeutic interchange requires the authorization of the prescriber. Therapeutic interchange requires the evaluation of each patient prior to changing the medication order. When possible, therapeutic interchange is prospective. When therapeutic interchange is implemented, it is preferable to provide the therapeutic equivalent medication prior to the first dose of prescribed medication. Conducting the therapeutic interchange prior to administration of the first dose to the patient enhances the efficiency of the program and improves patient acceptance Medicare Part D Claims Messaging NPS provides messaging to pharmacies at the point of sale with the phase of the Part D in which the member s benefit utilization currently exists. Messaging is noted as follows: Phase Message DED ICP GAP CAT Translation The beneficiary is in the deductible phase of the benefit. The beneficiary is responsible for claim amounts until the deductible is met. The beneficiary is in the initial coverage phase of the benefit. The beneficiary is in the Coverage GAP phase of the benefit. The copays are reflective of the plan benefit parameters. The beneficiary is in the Catastrophic Phase of the benefit with reduced cost sharing amounts. Pharmacies can be a terrific ally to beneficiaries, assisting in the management of prescription claims cost and maximizing beneficiaries benefit in order to stay out of the GAP. The following tips can be shared with beneficiaries: If your drug plan has a coverage gap, here are some ways you can avoid or delay entering the gap, and continue to save money on drug costs while in the gap: 1. Ask your healthcare provider if there is anything that is over the counter, or not a prescription that will work for you. 2. Ask your healthcare provider to review your formulary booklet to see if a generic or Preferred Medication is right for you. National Pharmaceutical Services Pharmacy Provider Manual 59

60 3. Ask your healthcare provider if there is a generic alternative. 4. Ask your healthcare provider if they have samples of the medication that you can try first before filling a prescription. 5. Ask your healthcare provider if you can split your medication. 6. Store your drugs away from heat and moisture to ensure there is no loss of potency. 7. Consolidate the dosing of your medications. 8. Make sure you are following your healthcare provider s instructions for taking your medications. 9. Review all your prescriptions with your doctor at each visit. Take your explanation of benefits report with you when you see your healthcare provider, so they understand the costs of the medications you are receiving. National Pharmaceutical Services Pharmacy Provider Manual 60

61 OTC/Nutritional Benefit Programs 7.1 Group Health Plans Some Group Health plans managed by NPS may choose to provide a supplemental OTC benefit in addition to the pharmacy benefit. Under the provided OTC benefit, members are eligible for certain OTC products up to a specified dollar amount per month. Other plans cover specific OTC products either at no copayment, the generic copayment, or a special copayment as noted by the plan. 7.2 Part D Plans Medicare Part D groups may choose to provide a Part C supplemental OTC benefit under which members are eligible for payment of certain OTC products up to a specified dollar amount per month. OTC items belonging to categories on the CMS approved list are classified as eligible, dual-purpose, or non-eligible. A non-eligible item may not be offered by the plan. Eligible and dual-eligible items may be offered by the plan as an individual benefit or as part of a packaged benefit. Dual-eligible items may only be purchased as part of the OTC benefit if the enrollee first discusses the purchase of the items with their provider and the provider recommends the item for a specific diagnosable condition. OTC items may only be purchased for the plan enrollee. The purchase of OTC items under the Medicare Sponsored supplemental OTC benefit for use by another is strictly prohibited. Each plan Sponsor that offers an OTC benefit program has a specific program benefit overview that may be provided to pharmacies upon request. 7.4 Processing OTC Benefit Claims All pharmacies are eligible to participate in the OTC benefit as long as they agree to accept the reimbursement rates for the specific quantities and strengths contracted. Reimbursement is inclusive of sales tax and the pharmacy customary dispensing fee. No prescription is required and can be processed in the same manner in which you would process any other prescription using the information provided: Field Value Rx BIN PCN Part D: DNPS All other plans: NPS Additionally you will need to utilize an NDC and an NPI number to process these claims. Please refer to the OTC benefit brochure provided by the plan for a generic NPI number. 7.3 Medicaid Plans Medicaid plans managed by NPS may choose to provide a supplemental over-the-counter benefit in addition to the pharmacy benefit. Under the provided OTC benefit, members are eligible for certain OTC products up to a specified dollar amount per month. Other plans cover specific OTC products either at no copayment, the generic copayment, or a special copay as noted by the plan. National Pharmaceutical Services Pharmacy Provider Manual 61

62 Long Term Care Pharmacy Providers 8.1 Short Cycle Dispensing and Uniform Dispensing Techniques Section 3310 of the ACA provides that Part D sponsors shall utilize specific, uniform dispensing techniques, such as weekly, daily, or automated dose dispensing when dispensing covered Part D drugs to enrollees who reside in LTCFs in order to reduce waste associated with 30-day fills. CMS considers waste to occur when a Medicare Part D drug is dispensed to a Medicare Part D Covered Person residing in a Long Term Care facility and billed to a Medicare Part D Plan Sponsor, but is not consumed by the Medicare Part D beneficiary. Under the regulation , all pharmacies servicing longterm care facilities, as defined in , are required to dispense solid oral doses of brand-name drugs, as defined in 423.4, to enrollees in such facilities in no greater than 14- day increments at a time. The requirement will initially limit the requirement for 14-day-or less dispensing to brand-name drugs; however, nothing precludes LTC pharmacies and facilities from expanding 14-day-or-less dispensing to more than brand-name drugs. Drugs Eligible for Exclusion from the 14-Day-Or-Less Dispensing Process Per Section (b), drugs eligible for exclusion include (1) solid oral doses of antibiotics; and (2) solid oral doses that are dispensed in their original container as indicated in the FDA Prescribing Information or are customarily dispensed in their original packaging to assist patients with compliance (for example, oral contraceptives). Dispensing Methodologies NPS network pharmacies will have multiple options in billing and reimbursement for LTC 14-day-or-less filled prescription drug(s) (including controlled substances). The options are: day supply dispensing; 2. 7-day supply dispensing; 3. Dispensing of a drug for 2 days, followed by dispensing of the drug for another 2 days, followed by dispensing of the drug for 3 days, referred to as day dispensing; 4. Dispensing of a drug for 4 days followed by the dispensing of the drug for 3 days, referred to as 4-3 day dispensing; 5. Daily dispensing; and 6. Automated shift or dose dispensing. Pharmacist Guidance for the 14-Day-Or-Less Dispensing Process 1. LTC facility means a skilled nursing facility, or medical institution or nursing facility, for which payment is made for an institutionalized individual, including closed-door LTC pharmacies, retail pharmacies and mail order pharmacies. The requirement does NOT include group homes or assisted living facilities. Note: CMS is exempting ICF-MRs (Intermediate Care Facilities for the Mentally Retarded and Developmentally Disabled), IMDs (Institutes for Mental Disease), and I/T/U pharmacies (Indian Health Service or Tribal Facilities) from the 14-day-orless dispensing requirements. 2. Pharmacies are to utilize specific, uniform dispensing techniques, which may mean the same type of packaging within a facility, but quantity of medication may vary. LTC facilities are in the best position to identify uniform dispensing techniques. Part D plans must permit contracted pharmacies to implement uniform dispensing techniques selected by each facility and may not require use of a different packaging system or technology. 3. Pharmacies are to provide methodology data for each dispensing event which will be reported to CMS. CMS has not provided specific guidance with regard to the minimum dispensing days supply and the type of drug impacted, however Part D plans need to track the dispensing methodologies utilized by LTC pharmacies in order to ensure compliance with the reduced dispensing mandate. 4. In order to assist plans in tracking the dispensing methodologies as required by CMS, Submission Clarification Code (42Ø-DK) and Special Packaging Indicator (429-DT) values must be included on claim submissions from a pharmacy serving a Part D LTC beneficiary with a Date of Service (4Ø1-D1) on or after January 1, Claims submitted with more than 1 Short Cycle Fill identified Submission Clarification Code (42Ø-DK) value will be rejected. 5. In some situations, Submission Clarification Code (42Ø- DK) and Special Packaging Indicator (429-DT) must both be populated. These situations are noted in the table below. In situations in which a claim is processed for a National Pharmaceutical Services Pharmacy Provider Manual 62

63 Submission Clarification Code (42Ø-DK) value of and Special Packaging Indicator (429-DT) is not populated, the claim will reject with reject code 613 and the message The packaging methodology or dispensing frequency is missing or inappropriate for the LTC Short Cycle. 6. For claims dispensed with a date of service of 01/01/2013 or later, and the Submission Clarification Code (42Ø-DK) and Special Packaging Indicator (429-DT) are not populated for claims with a Pharmacy Service Type of (147-U7) of 5 for Long Term Care Pharmacy and a Patient Residence Code (384-4X) of 3 for Nursing Facility, the claim will reject with a reject code 613 and the message The packaging methodology or dispensing frequency is missing or inappropriate for the LTC Short Cycle. 7. When a Submission Clarification Code (420-DK) is submitted but the Patient Residence Code (384-4X) does not match, the claim will reject with a reject code 34 and the message M/I Submission Clarification Code or reject code 4X and the message M/I Patient Residence Code. 8. In the event the Submission Clarification Code (42Ø-DK) and Special Packaging Indicator (429-DT) are in conflict with one another the claim will reject with a reject code (511-FB) 597 and the message LTC DISPENSING TYPE DOES NOT SUPPORT THE PACKAGING TYPE. In these cases the pharmacy will need to review the values submitted in the Submission Clarification Code (42Ø-DK) and Special Packaging Indicator (429-DT) fields against the tables below to ensure an appropriate dispensing event is submitted in the claim. 9. In cases in which a pharmacy combines a bill, for example dispenses two 14 day fills, but bills as one 28 days supply; in order to process this claim, the pharmacy will need to submit 2 transactions for 14 days supplies applying the correct Submission Clarification Code (42Ø- DK) to the claims. 10. In situations in which Short Cycle Filling may not be applicable, because these fills are typically dispensed in 14 days supplies or less e.g. e-box, leave of absence, replacement medications, and emergency fills (SCC 14-17) pharmacies will need to utilize a code of 21 to notate these events. 11. In the event the days supply submitted exceeds the days supply identified by the pharmacy in the Submission Clarification Code (42Ø-DK) value, the claim will reject with a reject code 7X and the message Days Supply Exceeds Plan Limitation. Pharmacies will need to review and adjust the days supply on the claim to match the dispensing methodology noted in the claims submission. 12. Pharmacies may encounter situations where a drug has been rejected due to the conflict between the submission clarification code and dispensing package type, as submitted per the prescriber s directions, and may need an override to allow the claim to process. In these cases, pharmacies will need to evaluate the Submission Clarification Code (42Ø-DK) values provided in the table below and ensure the code entered is valid for the specific situation. Leave of Absence (LOA) Medications In situations in which LTC pharmacies dispense a small supply (less than 7 days) of medications for take-home use allowing residents to leave the facility for weekend visits, holidays, etc. the pharmacy will need to submit a submission clarification code of 14 = Long Term Care Leave of Absence to avoid rejections for duplication or refill too soon. Submission Clarification Code (420-DK) values 420-DK Submission Clarification Code Value Description 21 LTC dispensing: 14 days or less not applicable - Fourteen day or less dispensing is not applicable due to CMS exclusion and/or manufacturer packaging may not be broken or special dispensing methodology (i.e. vacation supply, leave of absence, ebox, spitter dose). Medication quantities are dispensed as billed 22 LTC dispensing: 7 days - Pharmacy dispenses medication in 7 day supplies 23 LTC dispensing: 4 days - Pharmacy dispenses medication in 4 day supplies 24 LTC dispensing: 3 days - Pharmacy dispenses medication in 3 day supplies 25 LTC dispensing: 2 days - Pharmacy dispenses medication in 2 day supplies 26 LTC dispensing: 1 day - Pharmacy or remote (multiple shifts) dispenses medication in 1 day supplies 27 LTC dispensing: 4-3 days - Pharmacy dispenses medication in 4 day, then 3 day supplies 28 LTC dispensing: days - Pharmacy dispenses medication in 2 day, then 2 day, then 3 day supplies 429-DT Special Packaging Indicator Required No Yes Yes Yes Yes Yes Yes Yes National Pharmaceutical Services Pharmacy Provider Manual 63

64 420-DK Submission Clarification Code Value Description 29 LTC dispensing: daily and 3-day weekend - Pharmacy or remote dispensed daily during the week and combines multiple days dispensing for weekends Yes 3Ø LTC dispensing: Per shift dispensing - Remote dispensing per shift (multiple med passes) 31 LTC dispensing: Per med pass dispensing - Remote dispensing per med pass 32 LTC dispensing: PRN on demand - Remote dispensing on demand as needed 33 LTC dispensing: 7 day or less cycle not otherwise represented 34 LTC dispensing: 14 days dispensing - Pharmacy dispenses medication in 14 day supplies 35 LTC dispensing: 8-14 day dispensing method not listed above Day dispensing cycle not otherwise represented 36 LTC dispensing: dispensed outside short cycle - Claim was originally submitted to a payer other than Medicare Part D and was subsequently determined to be Part D. Special Packaging Indicator (429-DT) values Value Description 0 Not Specified 1 Not Unit Dose 2 Manufacturer Unit Dose 3 Pharmacy Unit Dose 429-DT Special Packaging Indicator Required Yes Yes Yes Yes Yes Yes No 4 Pharmacy Custom Unit Dose Patient Compliance Packaging 5 Pharmacy Multi-drug Patient Compliance Packaging 6 Remote Device Unit Dose 7 Remote Device Multi-Drug Compliance Pack Beneficiary Copayment 1. Co-pay methodologies within the same plan may vary depending on LTC facility, so long as they are consistent for same dispensing methodology. 2. For non-lis members, co-pays will generally be applied at the first dispensing of the claim or a pro-rated basis of the days supply by most plan sponsors. 3. The daily cost-sharing rate is defined as the established monthly copayment under the enrollee s Part D plan, divided by 30 or 31 and rounded to the nearest lower dollar amount, if any, or to another amount, but in no event to an amount which would require the enrollee to pay more for a month s supply of the prescription than would otherwise be the case. 4. For LIS members co-pays may only be collected for either the first or last dispensing of the month. 5. Regardless of the number of incremental dispensing events, the total cost sharing for a Part D drug to which the 14-day-or-less dispensing requirements apply shall be no greater than the total cost sharing that would be imposed for such Part D drug if the 14-day-or-less requirements did not apply. 8.2 OBRA 90 and Prospective Review The Omnibus Budget Reconciliation Act, or OBRA 90, requires pharmacists to perform prospective drug review for Medicare beneficiaries, reviewing prescriptions at the point of sale for potential problems. In the event a medication is nonformulary, a DUR message will be given in accordance with NCPDP guidelines, informing the pharmacist the medication is non-formulary and requires a prior authorization or a transitional override may apply. Pharmacists are required to review and address the messaging per OBRA 90 requirements regardless of pharmacy prescription volume or ease of accessibility to messaging dependent on the pharmacies computer program and/or software. Pharmacies are expected to address the messaging given during prospective drug review and take appropriate action at the point of sale to obtain a transition override and/or notify the prescriber to initiate the prior authorization process prior to dispensing the claim. Note: Many of the Benefit Plans we support may cover Medicare Part D excluded drugs through enhanced coverage. 8.3 Policy on Back-Dating NPS generally does not allow back-dating of prior authorizations. This includes, but is not limited to, nonformulary medications processed at the 100% discounted copay. These should have been addressed appropriately during prospective drug review. Granting retroactive effect to or back-dating prior authorizations will only be considered in National Pharmaceutical Services Pharmacy Provider Manual 64

65 extraordinary circumstances upon request of prescriber. NPS may review requests for back-dating of prior authorizations for Long-term Care patients on a case-by-case basis, taking into consideration the special circumstances associated with the needs of a Long-term Care patient. 8.4 Emergency/Transition Procedures Long-term care Part D members are entitled to up to a 90-day transition period beginning on an enrollee s first effective date of coverage in which they are eligible for a temporary fill of non-formulary medications. The temporary supply of nonformulary Part D drugs include Part D drugs that are on a Part D Sponsor s formulary but require prior authorization or step therapy. The temporary supply may be up to 31 days supply for new Long-term Care enrollees. NPS will honor multiple fills of non-formulary Part D drugs, including those drugs that are on a Sponsor s formulary but require prior authorization or step therapy, as necessary during the entire length of the 90-day transition period. 8.5 Medicare Covered Drugs Medicare beneficiaries who are inpatients of hospitals or skilled nursing facilities (SNF) during covered stays may receive drugs as part of their treatment. Medicare Part A (hospital coverage) payments made to hospitals and skilled nursing facilities generally cover all drugs provided during a Part A qualified stay. Under the Medicare hospice benefit, beneficiaries receive drugs that are medically necessary for symptom control or pain relief. Medicare/Part B (medical coverage) can pay hospitals and SNFs for most categories of Part B covered drugs if a beneficiary does not have Part A coverage, if Part A coverage for the stay has run out, or if a stay is not covered. Depending on the setting and intended use the same medication may be billed under Medicare Part B or Part D. Long-term Care pharmacies are required to submit prescriptions for reimbursement appropriately and correctly. There are specific actions that a long-term care facility must take to ensure that Medicare Part D claims processed and paid through the NPS system are compliant with the Social Security Act in section 1861(dd) and Federal regulations in Part 418. LTC pharmacies should work with the LTC facilities to identify any Medicare enrollees who have elected hospice and ensure that hospice drugs are not billed to Medicare Part D plans. It is inappropriate to submit drugs related to hospice beneficiaries terminal illnesses to Medicare part D. Please refer to CMS for complete guidance on the appropriate billing of drugs under Medicare Part A, Part B, and Part D. Medicare Part A Coverage Expiration In situations in which LTC pharmacies dispense a supply of medication to a beneficiary who is covered under Medicare Part A and the Medicare Part A coverage expires and the Part D Coverage becomes active, the pharmacy will need to submit a split billing transaction to NPS in order to receive appropriate remuneration for the claim. In these cases, LTC Pharmacies may submit a Submission Clarification Code (420- DK) value of 19 for a split billing event. This will indicate the quantity dispensed is the remainder billed to the Part D payer after the Part A coverage has expired. This code is only allowed for claims with a Pharmacy Service Type (147-U7) of 5 for Long Term Care Pharmacy and a Patient Residence Code (384-4X) of 3 for Nursing Facility. In these cases, the Part D Plan will not fund a dispensing fee for claims submitted with a Submission Clarification Code (420-DK) value of 19. Pharmacies should populate the Dispensing Fee Submitted field (412-DC) with a $ CMS/Part D Requirements CMS has developed the following minimum and service criteria for pharmacies providing LTC service: 1. Comprehensive Inventory and Inventory Capacity: Network LTC pharmacies must provide a comprehensive inventory of plan formulary drugs. 2. Pharmacy Operations and Prescription Orders: Network LTC pharmacies must provide services of a dispensing pharmacist to meet the requirements of pharmacy practice for dispensing prescription drugs to LTC residents, including but not limited to the performance of DUR. 3. Special Packaging: Network LTC pharmacies must have the capacity to provide specific drugs in Unit of Use Packaging, Bingo Cards, Cassettes, Unit Dose or other special packaging commonly required by LTC facilities. 4. IV Medications: Network LTC pharmacies must have the capacity to provide IV medications to the LTC resident as ordered by a qualified medical professional, including but not limited to a clean room. 5. Compounding/Alternative Forms of Drug Composition: Network LTC pharmacies must be capable of providing specialized drug delivery formulations as required for some LTC residents, specifically for residents unable to swallow or ingest medications through normal routes. 6. Pharmacist On-call Service: Network LTC pharmacies must provide on-call, 24 hours a day, 7 days a week service with a qualified pharmacist available for handling calls after hours and to provide medication dispensing available for emergencies, holidays, and after hours of normal operations. 7. Delivery Service: Network LTC pharmacies must provide for delivery of medications to the LTC facility up to 7 days each week (up to 3 times per day) and in-between regularly scheduled visits. Emergency delivery service must be available 24 hours a day, 7 days a week. National Pharmaceutical Services Pharmacy Provider Manual 65

66 8. Emergency Boxes: Network LTC pharmacies must provide emergency supply of medications as required by the facility in compliance with State requirements. 9. Emergency Log Books: Network LTC pharmacies must provide a system for logging and charging medication used from emergency/first dose stock. Further, the pharmacy must maintain a comprehensive record of a resident s medication order and drug administration. 10. Miscellaneous Reports, Forms and Prescription Ordering Supplies: Network LTC pharmacies must provide reports, forms and prescription ordering supplies necessary for the delivery of quality pharmacy care in the LTC setting including, but not limited to, provider order forms, monthly management reports, medication administration records and treatment administration records. Please reference the Chapter 5, section 50.5, of the Medicare Prescription Drug Benefit Manual for a complete list of the minimum performance and service criteria for pharmacies providing LTC services. The Prescription Drug Benefit Manual is available at: Coverage/PrescriptionDrugCovContra/PartDManuals.html. LTC Signature Logs While individual patient signatures may not, under some circumstances, be practical for LTC pharmacies, NPS expects there to be a signed record for ALL medications delivered to a facility by a pharmacy. These logs can be signed by facility staff members with the authority to receive these medications. These logs should be made available to NPS as requested during desktop and onsite audits. Failure to produce a signed log may result in a charge back to the pharmacy. LICS Status If you believe a patient has been retroactively assigned an institutionalized LICS status from CMS, we recommend you proceed to reverse and resubmit the claims for the member. If you feel a patient s LICS level has not been updated, LTC pharmacies are strongly encouraged to submit the Best Available Evidence (BAE) per CMS guidelines. BAE should be submitted to NPS and the respective Part D Plan Sponsor as quickly as possible to request the member s LICS status be changed to institutionalized. Please refer to Section 2.4 BAE Claims Processing for additional information. Notice of Medicare Prescription Drug Coverage and Your Rights Network pharmacies are required to provide a printed notice to Medicare Part D enrollees when a prescription cannot be filled under their Medicare Part D benefit. The printed Notice, Medicare Prescription Drug Coverage and Your Rights will inform beneficiaries how to request a Coverage Determination. NPS will provide messaging per NCPDP guidance to remind and alert pharmacy pharmacies when notices should be provided. 8.7 LTC Rebate Reporting Requirements and Submissions Long-term care network pharmacies are required by CMS to report and submit access/performance rebates that may create financial incentives that conflict with Part D Sponsor s formularies or drug utilization management programs. The incentives can negatively impact formulary adherence as well as overall drug costs associated with beneficiaries served by LTC pharmacies. Pharmacies are required to submit the reporting required not less than 60 days prior to the CMS due date. Please refer to CMS for current/updated reporting guidelines and due dates. 8.8 Patient Location Codes and Claims Submissions To ensure proper reimbursement, it is important Long-Term Care pharmacies submit accurate patient location codes. Per NCPDP, Long-term Care pharmacy claims processing guidelines require pharmacies submit a patient location qualifier in Field # 307-C7 (Patient Location) specifying the location of patients in a Long-term Care setting. Valid values determined by customer/client specific edits include: 03=Nursing Home - This code encompasses claims for a beneficiary who resides in LTC facilities. 09=ICFMR - This code encompasses claims for a beneficiary who resides in an Intermediate Care Facilities for the Mentally Retarded (ICFMR) Long-term Care/Assisted Living Facility claims not submitted with location codes will be paid at retail rates, provided the pharmacy is in the retail network. If submitting pharmacy is not in the retail network, the claim will be denied with error. 8.9 LTC Timely Claims Submission Requirement In keeping with the guidelines set forth by CMS in federal regulations and NPS Contract provisions, LTC pharmacies shall have at least 30 days and not more than 90 days (i.e. up to 90 days) to submit claims to NPS for payment of Medicare Part D claims. NPS permits claim submission for exceptional circumstances beyond 90 days for claims that meet the following criteria: A. Change in, or discovery of, retroactive new eligibility information that member was enrolled in a Medicare Part D plan on the date of service. From time to time, the LIS eligibility information in CMS s system for Medicare Part D enrollees may be updated retrospectively. When this occurs, LTC Pharmacy s attestation of noncollection of copayments for Medicare Part D LIS enrollees who are members of a plan administered by NPS on behalf of a National Pharmaceutical Services Pharmacy Provider Manual 66

67 Part D Sponsor will be required. Failure of LTC Pharmacy to attest to this noncollection of co-payments may result in NPS holding reimbursements of these cost sharing amounts. B. Change in, or discovery of, retroactive of invalid eligibility information that member was not enrolled in the plan on the date of service and claim needs to be reversed beyond the 90 days allowed and resubmitted to proper third-party payer, provided the claim has not been accounted for by CMS Plan-to-Plan Reconciliation Process. C. LTC Pharmacy discovers error in the original claim submission after 90 days from the date of service and requests a reversal and resubmission of the claim with the updated corrected information. NPS will determine whether sufficient evidence exists to warrant reversal and resubmission of the claim on a case-by-case basis. Claims greater than 90 days requiring a prior authorization that processed through at 100% and provided the Drug Utilization Review Messaging, Non-formulary, PA Required are not eligible for Claim Too Old claim exception reprocessing. LTC Pharmacy must complete the LTC Claim Too Old Request Form (see appendix). Detailed instructions are provided on the form. Incomplete or unsigned forms will be rejected. The completed form must be submitted via fax to NPS at: The LTC pharmacy must thoroughly document, in a retrievable format, the reason for any exception to the regulatory requirement. All related documentation must be available on audit, whether conducted by NPS or other parties authorized to review Medicare Part D claims for compliance or to detect FWA. Such claims that are insufficiently documented may be subject to audit recovery. Requests will be reviewed and, if accepted, will be processed within 10 business days. Should the requests require additional claims review prior to reprocessing, as determined by NPS, it may require greater than 10 days to process these claims. National Pharmaceutical Services Pharmacy Provider Manual 67

68 Specialized Pharmacy Services 9.1 Specialty Pharmacy A specialty pharmacy is one that focuses on specialty drugs or on patients with particular disease states. Specialty pharmacy is not a regulatory designation but rather represents a business decision by a retail pharmacy to serve a niche market. These pharmacies are designed to efficiently deliver medications with special handling, storage, and distribution requirements. Specialty pharmacy staff generally work closely with other members of the patient s healthcare team to provide patient education, promote adherence, and attempt to avoid unnecessary costs, with the overall goal of improving outcomes for patients with complex conditions. Many specialty medications are available to NPS members at any network pharmacy. However, depending upon the plan design and the special services elected by the plan sponsor, certain specialty medications may be restricted to NPS s preferred specialty pharmacy. If you receive a rejection message indicating the member must obtain a medication from a preferred specialty pharmacy, call the NPS Help Desk at for guidance. Network pharmacies must refer members to the designated specialty pharmacy. 9.2 Sterile Compounding Pharmacy All pharmacies serving NPS members are expected to continually work toward ensuring positive patient outcomes. However, sterile compounding is an area that deserves particular attention to standards of care intended to protect patients. All compounding pharmacies serving NPS members are required to practice in accordance with all applicable state regulations, the current United States Pharmacopeia- National Formulary chapters on compounding and sterile pharmaceutical preparations, and federal law. Compounding pharmacies must maintain and follow a policy and procedure manual that addresses but is not limited to the following: Prevention of microbiological contamination of sterile drug products. Training and other requirements for pharmacy compounding personnel involved in aseptic manipulations to ensure adherence to the basic principles of aseptic technique. Use of appropriate environmental control devices in accord with USP Chapter 797. Delineation of a quality management program that, in addition to the guidelines set forth in Section , monitors sterility and contamination parameters. Storage, shipping, and delivery procedures that ensure environmental control and stability of sterile drug products. This manual must be made available for inspection by NPS upon request. In addition to standard record and reporting requirements, compounding pharmacies must maintain compounding formulation records, maintenance logs, and records demonstrating that adequate disinfection of equipment. These records must be made available for inspection by NPS upon request. Pharmacies utilizing compounding outsourcing facilities must ensure that such facilities are properly registered as outsourcing facilities, meet current Good Manufacturing Practice requirements, report QREs and provide the FDA with required information about the products they compound, are subject to inspection by the FDA according to a risk-based schedule, label compounded drug products as required by law, and only compound using bulk drug substances that meet specified FDA criteria. 9.3 Home Infusion Pharmacy A home infusion pharmacy is one that provides care to patients with acute or chronic conditions generally pertaining to parenteral administration of drugs, biologics, and nutritional formulations administered through catheters and/or needles in patients homes and at alternate sites. These pharmacies have expertise in USP 797-compliant sterile drug compounding and provide extensive pharmacy services, care coordination, infusion nursing services, supplies and equipment to optimize efficacy and compliance Home Infusion Part D Requirements Pharmacies shall ensure professional services and ancillary supplies necessary for home infusion are in place before dispensing home infusion drugs to eligible persons in his/her place of residence. Participating Home Infusion pharmacies may be required to attest to having complied with these CMS Home Infusion standards, and provide the attestation to NPS or its agent upon request. Participating Home Infusion pharmacies are required, at a minimum, to: Provide delivery of home-infused drugs in a form that can be administered in a clinically appropriate fashion. National Pharmaceutical Services Pharmacy Provider Manual 68

69 Provide infusible Part D drugs for both short-term acute care and long-term chronic care therapies. Ensure that the professional services and ancillary supplies necessary for home infusion therapy are in place before dispensing Part D home infusion drugs. Provide delivery of home infusion drugs within 24 hours of discharge from an acute care setting, or later if so prescribed. Please reference the Chapter 5, section 50.4, of the Medicare Prescription Drug Benefit Manual for a complete list of the minimum performance and service criteria for pharmacies providing home infusion services. The Prescription Drug Benefit Manual is available at: Coverage/PrescriptionDrugCovContra/PartDManuals.html. Claims Submissions for Infusible Products To ensure proper reimbursement Infusible Products are to be submitted appropriately and correct. When submitting an infusible product for home infusion, pharmacies are required to submit patient code 1=Home in Field# 307-C7, as defined by NCPDP Guidelines, signifying patient location. Notice of Medicare Prescription Drug Coverage and Your Rights Network pharmacies are required to provide a printed notice to Medicare Part D enrollees when a prescription cannot be filled under their Medicare Part D benefit. The printed Notice, Medicare Prescription Drug Coverage and Your Rights will inform beneficiaries how to request a Coverage Determination. NPS will provide messaging per NCPDP guidance to remind and alert pharmacy pharmacies when notices should be provided Per Diem Submissions Pharmacies who dispense IV home infusion drugs with supplies to administer must use the per diem S codes outlined in these procedures when allowed or contracted with Plan Sponsors. Services and supplies included in the per diem are: Compounding supplies (syringes, tubing, gloves, etc.) Ancillary medical supplies (syringes, tubing, catheters, etc.) DME rental (pumps, poles and accessories) Dispensing fees The per diem billing codes are all inclusive; there should be no supplies or other services billed with these codes. The following items are required and must be submitted with all per diem S code claims: 1. Injectable Preparation Information 2. A copy of the Physician s orders for the IV home infusion drug Note: All drugs are excluded from the per diem S codes. All home infusion drugs must be submitted online to NPS using the NDC number. S code per diem payment is not available for medications which are commercially available ready to be administered and which do not require admixture (ex: Procrit, Neupogen, Humira, Enbrel, Lovenox). Per diem S code payments are available for infusible drugs only. Please bill for supplies associated with administration of commercially available ready to administer medications separately online using the NDC for the supplies. The reconstitution of a product does not qualify as compounded and claims for admixed products should be submitted with a Compound Claim code of 1. National Pharmaceutical Services Pharmacy Provider Manual 69

70 Pharmacy Provider Relations 10.1 Network Participation Pharmacies become eligible to participate in the NPS network upon completion of the Network Pharmacy Contract and successful completion and passing of the credentialing process. Pharmacies are credentialed before being accepted as a participating network provider. Periodic re-credentialing will be conducted by NPS in accordance with normal healthcare standards and/or as mandated by law. Pharmacy is expected to promptly provide NPS with the requested documentation in order to maintain its participation status. Pharmacies may also delegate contracting responsibilities to a Pharmacy Affiliation. Pharmacy is required to apply to be a NPS Network Provider. They are also required to meet all the requirements set out in this Pharmacy Provider Manual as well as any other supplements and/or additions. Failure to comply can result in losing status as a network Provider. If a Pharmacy is contracted with an Affiliation that maintains an agreement with NPS in accordance with applicable schedule(s), and Pharmacy terminates its relationship with Affiliation or Pharmacy is terminated from the Affiliation, the Pharmacy may continue in the NPS Network by contacting the Provider Relations Department. An Affiliation must certify that affiliated Pharmacy meets NPS s requirements, and the Affiliation must represent that it has an ongoing policy to ensure that Pharmacy meets NPS s credentialing standards and abides by the Pharmacy Provider Manual. In order to become and remain a Provider in a NPS network, a Pharmacy must comply with requirements. These obligations are continuing. All Providers must comply with all applicable laws and regulations (including but not limited to all generic substitution laws) and provide all services and products in a professional manner and in compliance with the highest industry standards with care, skill, and diligence. These requirements include, but are not limited to, the following: Maintain in good standing all federal, state, and local licenses, permits and certificates as required by law. Hold a valid pharmacy license or permit as issued by the appropriate state agency in which it operates to dispense medications. Additionally, Pharmacy must meet all standards of operation as described in federal, state, and local laws. Require and verify that all personnel employed by or contracted with Pharmacy are licensed and qualified to perform their professional duties and that they act within the scope of their licensure. Require and verify Pharmacy that Provider and all personnel employed by or contracted with Pharmacy have not been excluded or debarred by any federal or state program. Pharmacy will check the applicable state and federal exclusions lists to verify that no employees or contractors are on the list. Pharmacy must inform NPS of the fact that any entity or individual is listed on the exclusion list. No compensation will be provided for claims for which work has been done by an excluded person or entity. NPS reserves the right to immediately terminate its agreement with Pharmacy upon becoming aware that such Pharmacy has been investigated within the past five years or is currently under investigation by a federal or state governmental agency or regulatory body. Pharmacy may submit a written appeal of the termination to NPS Pharmacy Relations within 14 days. Require and verify that any individual for whom there has been a restriction, suspension, revocation, any other disciplinary action taken, or who is on a state or federal exclusion list, does not provide any service for NPS members and inform NPS of any restrictions, suspensions, revocations or other disciplinary action taken against Pharmacy. Any additional applicable requirements imposed by states in which Pharmacy is located and does business, including but not limited to those listed in the State Regulatory Addendums section in the Appendix of this Manual. Changes or updates to information such as licensing, pharmacist-in-charge, etc., need to be provided to the contracting entity (i.e., the pharmacy s Pharmacy Services Administration Organization (PSAO), the pharmacy s chain headquarters, or NPS if the pharmacy is independently contracted). Please note that NPS uses NCPDP as its primary source for updating all pharmacy demographic information such as address, telephone number, etc. Please visit to review your current NCPDP record and update any outdated or expired information accordingly Medicare Part D To participate in the Medicare Part D groups managed by NPS, pharmacies are required to adhere to all guidelines and requirements set forth by CMS. Network Pharmacies are required to provide a printed notice to Medicare Part D National Pharmaceutical Services Pharmacy Provider Manual 70

71 enrollees when a prescription cannot be filled under their Medicare Part D benefit. The printed notice titled Medicare Prescription Drug Coverage and Your Rights will inform beneficiaries how to request a Coverage Determination. NPS will provide messaging per NCPDP guidance to remind and alert pharmacies when notices should be provided. Medicare Part D Credentialing Medicare Part D regulations require NPS, as a subcontractor to plan sponsors, to conduct due diligence of its downstream entities. In accordance with these regulations and with the Network Pharmacy Agreement, NPS monitors Pharmacies to ensure compliance with state and federal regulations regarding pharmacy practice. NPS therefore requires that Pharmacies submit current credentialing documentation to NPS in order to remain a participant in the NPS Medicare pharmacy network. This documentation includes, but is not limited to, the following: 1. Current, valid professional liability insurance policy or proof thereof. Documentation must be consistent with the liability limit specified in Pharmacy Network Agreement. 2. Current valid unrestricted pharmacy license for the state in which the pharmacy is located, in addition to all other states in which the pharmacy is licensed for out of state processing. 3. Current PIC license. 4. Current, valid, unrestricted DEA license for pharmacy. 5. Names and titles of corporate officers and directors. 6. Current NPS Fraud, Waste and Abuse Compliance Attestation. The attestation must be completed annually and can be completed online through NCPDP at If Pharmacy indicates that it utilizes offshore subcontractors, Pharmacy is required to complete an Offshore Subcontracting Attestation. The attestation can be found on the Network Pharmacy Resources Portal. 7. If applicable to Pharmacy, current copy of Accreditation certificate to process DMEPOS products, in addition to a valid Medicare Part B Supplier number provided by NSC (National Supplier Clearinghouse). 8. A copy of Pharmacy s policy and procedure on dispensing errors, if Pharmacy is located in a hospital or long-termcare facility, or provides mail order pharmacy services. NPS is committed to maintaining a network of pharmacies that provide exceptional customer service and conform to all FWA requirements. NPS requires additional credentialing requirements for pharmacies located in, and surrounding, HEAT areas Contracts and Addendums All NPS contracts are for the pharmacy type declared on the contract. Each pharmacy is required to designate its pharmacy type in the Pharmacy Network Agreement, and misrepresentations are grounds for termination from the network. Pharmacy types include retail, mail order, long term care, home infusion and Indian Tribunal/IHS. To participate in optional programs provided by NPS not outlined in the standard Network Provider Agreement, providers may be required to sign a contract addendum at the discretion of NPS. In order to be considered an LTC or home infusion pharmacy in the NPS pharmacy network, pharmacies must complete the relevant Annual Validation, which can be found on the NPS Portal. Per CMS Provider Directory Requirements, in order to ensure that the required information in provider directories is accurate, pharmacies must notify NPS Provider Relations within 2 weeks if the business practices attested to in the Annual Validation change. All communication, contracting, and pharmacy updates and concerns can be submitted to the Provider Relations department address pharmacy_relations@pti-nps.com or mailed to: National Pharmaceutical Services Attn: Provider Relations PO Box 407 Boys Town, NE Official Notices All notices to NPS or Pharmacy pursuant to Pharmacy s Agreement with NPS must be in writing and must be delivered via facsimile or sent by first class mail (postage prepaid) or overnight courier addressed to NPS at the address noted above. Notwithstanding the foregoing, NPS may give notice to Pharmacy by communication via the Point of Sale processing system, by electronic mail, or by facsimile. In addition, NPS may provide copies of this Manual or updates to the Manual via any of the means listed above or on the NPS website Pharmacy Provider Grievance Process NPS values its relationships with Network Pharmacies and strives to resolve Pharmacy concerns efficiently, fairly and cost-effectively. If possible, NPS resolves issues raised by Network Pharmacies at the time of the initial contact. NPS offers a grievance resolution process for Pharmacies if the issue cannot be resolved informally. A grievance is defined as any concern or issue by a Pharmacy as a result of its relationship with NPS or any plan and may include, but is not limited to, a claim or other billing issue, a contract issue, or an National Pharmaceutical Services Pharmacy Provider Manual 71

72 operational issue. Pharmacy should note that the process and timeframes stated below generally apply to Network Pharmacy Grievances; however, when applicable state laws or regulations and/or the NPS Network Pharmacy Agreement (including documents incorporated by reference) requires different processes or timeframes, NPS will adjust the process accordingly. Grievance Resolution Process Pharmacy may submit a written Grievance within 30 days of the occurrence of the event giving rise to the Grievance: National Pharmaceutical Services Attn: Provider Relations PO Box 407 Boys Town, NE The written Grievance must include at least the following information (as applicable): (i) Pharmacy name; (ii) Pharmacy tax identification number; (iii) Pharmacy contact information; (iv) Member name; (v) insurer s identification information; (vi) dates of service; (vii) billed and paid amounts, if applicable; (viii) NPS s claim authorization number, if applicable; (ix) clear and concise explanation of the reason for the Grievance (i.e., underpayment; no authorization; benefit issue; contract issue); (x) a copy of the original claim and explanation of payment or explanation of benefits, if applicable; (xi) copies of all other applicable documentation. NPS will provide a written decision within 30 days of receipt of the written Grievance. If Pharmacy submits a Grievance involving 50 or more claims, NPS requires an electronic spreadsheet numbering each individual claim, date of service, billed and paid amounts, if applicable, and NPS s claim authorization number, along with hard copies of the claims and the appropriate supporting documentation. Incomplete Grievances will be returned to Pharmacy with a request for additional information. Returned Grievances may be resubmitted with the additional information within 30 days of the date the returned Grievance is mailed to Pharmacy. Conclusion of Grievance Process The resolution of a Grievance concludes NPS s Network Pharmacy Provider Grievance Resolution Process. If Pharmacy wishes to pursue an issue further, Pharmacy should consult the NPS Network Pharmacy Agreement (including any incorporated documents) and applicable state laws for any additional rights and obligations it may have. In the event of a conflict between this process and applicable law, applicable law shall govern all Grievances. National Pharmaceutical Services Pharmacy Provider Manual 72

73 Network Pharmacy Compliance 11.1 Compliance with Laws and Regulations Pharmacies must comply with the terms of the Pharmacy Network Agreement Contract, in addition to all applicable State and Federal laws, rules, and regulations, including but not limited to the following, any of which may be amended from time to time: Social Security Act Medicare Part D implementing regulations 42 CFR Parts CMS instructions Federal Anti-Kickback Statute Federal False Claims Act Patient Protection and Affordable Care Act The pharmacy affirms that it, nor any of the owners, directors, officers, employees, or contractors are subject to sanction under the Medicare/Medicaid program, debarment, suspension, exclusion under any Federal or State agency or program, or otherwise are prohibited from providing services to Medicare or Medicaid beneficiaries. The pharmacy must notify NPS immediately of any change in such status and any breach of the requirements set forth in this paragraph is grounds for termination of the NPS Pharmacy Network Agreement Contract Signature Logs NPS network pharmacies are required to maintain a log of signatures of enrollees or their representatives, receiving prescriptions. The log must contain: The date the prescription was picked up by the enrollee or his/her representative. The prescription number. The signature of the enrollee to whom the prescription was dispensed or their representative. Any claims submitted to NPS for reimbursement for which a valid entry in the pharmacy s signature log cannot be obtained will not be considered valid. Reimbursement made to the pharmacy for such a claim will be recovered. In certain situations at the sole discretion of NPS, shipping logs and delivery manifests may be acceptable. Such records must reference the prescription numbers, fill dates and date delivered for the items included in the delivery Claim Reversals Prescriptions billed to NPS which are not picked up by the enrollee must be cancelled by the pharmacy. Claims in the current remittance cycle will be reversed and no payment made to the pharmacy. A reversal for a previously paid claim will result in the withholding of the amount of the previously paid claim on the next remittance invoice. Pharmacies may cancel previously billed claims by initiating a reversal on the NPS system or by submitting appropriate information to NPS identifying the claim which has been paid and indicating that the claim should be reversed. If the pharmacy is unable to completely process a reversal online, the pharmacy should call the NPS Help Desk at for assistance Other Requirements Pharmacies are required to: Review the concurrent DUR messages and take appropriate action. Substitute generic products, when available appropriate per DAW code. Counsel patients about their medications and therapy compliance. Prohibit from independently implementing therapeutic substitution or utilization management programs State Requirements Pharmacy is required to comply with all applicable Requirements, and Pharmacy, by the providing of Covered Services, does acknowledge it will comply with such applicable requirements. Pharmacy acknowledges that various State mandates may apply with respect to this Agreement and the services provided to Eligible Persons. Pharmacy represents and warrants that it is, and shall remain, in compliance with all applicable Laws, including the regulatory addendums which, from time to time, may be attached as Appendices hereto and incorporated herein by this reference. Member Pharmacy agrees that by executing the Agreement, Member Pharmacy is executing the applicable State addenda and shall not require a separate signature in order to be effective. National Pharmaceutical Services Pharmacy Provider Manual 73

74 Pharmacy FWA Training Regulations governing Medicare Part D require all pharmacist and pharmacy staff who provide Part D covered services to receive appropriate FWA and Compliance training, initially upon hire as part of orientation and at least annually thereafter. Pharmacies should ensure that: All persons who provide services in conjunction with Medicare Part D complete a FWA training program which meets the CMS requirements. To train your employees, you must use one of the following: o The CMS Medicare Part C and D Fraud, Waste and Abuse module available at nce.asp. o Any other training module that meets CMS requirements. Maintain internal training logs documenting the staff s completion of the training. Complete and submit the training attestation to NPS. Topics that should be addressed in FWA training include, but are not limited to the following: Laws and regulations related to MA and Part D FWA (i.e., False Claims Act, Anti-Kickback statute, HIPAA/HITECH, etc.); Obligations to have appropriate policies and procedures to address FWA; Processes for sponsors and employees to report suspected FWA to the sponsor (or, as to first tier downstream entity employees, either to the sponsor directly or to their employers who then must report it to the sponsor); Protections for sponsor and first tier downstream entity employees who report suspected FWA; and Types of FWA that can occur in the settings in which sponsor and first tier downstream entity employees work. For details on accessing the FWA training and education on the MLN website, see the May 8, 2012, HPMS memo regarding FWA Training and Education Guidance. If your pharmacy does not have access to a CMS compliant Medicare FWA training program please contact NPS at for a copy of our program that can be shared with your pharmacy. Sponsors are accountable for maintaining records for a period of 10 years of the time, attendance, topic, certificates of completion (if applicable), and test scores of any tests administered to their employees, and must require first tier downstream entities to maintain records of the training of the first tier downstream entities employees. First tier downstream entities who have met the FWA certification requirements through enrollment into Parts A or B of the Medicare program or through accreditation as a supplier of DMEPOS are deemed to have met the FWA training and education requirements. No additional documentation beyond the documentation necessary for proper credentialing is required to establish that an employee or first tier downstream entity or employee of a first tier downstream entity is deemed. In the case of chains, such as chain pharmacies, each individual location must be enrolled into Medicare Part A or B to be deemed. See examples of such entities in Pub , Medicare Managed Care Manual, chapter Personnel Personnel employed by or contracted with Pharmacy who have been excluded or debarred by any federal or state program are prohibited from providing any service for NPS members. Pharmacy must designate a pharmacist-in-charge, who must be physically present in the pharmacy a sufficient amount of time to provide supervision and control. The pharmacist-incharge is responsible for the following: Policies and procedures addressing the provision of pharmacy services; the procurement, storage, security, and disposition of drugs and devices; automated pharmacy systems; computerized recordkeeping systems; preventing illegal use or disclosure of PHI; operation of the pharmacy in the event of a disaster or emergency to the extent that the pharmacy can be safely and effectively operated and the drugs contained therein can be safely stored and dispensed; management of drug recalls; actions to be taken to prevent and react to pharmacy robberies and thefts; restriction and monitoring of control over and access to locks, barriers and systems used to secure the pharmacy and pharmacy systems. An internal quality management program as outlined in Section A pharmacy technician training program that is site-specific to the practice setting and which satisfies regulations set forth by the applicable State Board of Pharmacy. Other duties as regulated by the applicable State Board of Pharmacy. The pharmacist-in-charge should be assisted by a sufficient number of pharmacists, pharmacy interns, and pharmacy technicians as necessary to competently and safely provide pharmacy services. All pharmacists, pharmacy interns, and pharmacy technicians must be licensed, registered, and/or certified as required by the applicable State Board of Pharmacy. The duties and responsibilities of pharmacy interns and pharmacy technicians should be consistent with their training and experience; policies and procedures specifying these duties should specify at a minimum that pharmacy technicians not be assigned duties that may be performed only by a pharmacist. National Pharmaceutical Services Pharmacy Provider Manual 74

75 HHS/OIG Exclusion List Review Requirement Pharmacies are required to maintain compliance with all Medicare Part D requirements, including review of HHS/OIG LEIE data. This review is required to be completed upon initial hiring of any employee or contractor, and at a minimum annually thereafter, in order to ensure that no such employee or contractor responsible for furnishing, ordering, or prescribing an item or service that will be paid by any Federal Health Care programs is on such lists. NPS Pharmacy Audit Department reviews compliance with these expectations during the course of pharmacy audits conducted with network pharmacies. The following guidance outlines the process which pharmacies should follow and would be acceptable e.g., as proof during an audit) that the requirements of LEIE review have been completed. HHS/OIG maintains an online searchable database of exclude individuals and entities that can be utilized to perform the review at Pharmacy should maintain a policy and procedure which defines the requirement and policy to complete the review process and maintain appropriate records. Pharmacy should maintain a List of Employees/Contractors for whom the verification was completed and the date of the completion. (Note: Verification must be complete upon new hire and once annually at a minimum). If a contractor is utilized (e.g., staffing service), maintain documentation (contract) which demonstrates the party which will be obligated to complete the review, and if the subcontractor maintains that responsibility, maintain documentation to demonstrate periodic validations of those reviews were complete. Maintain screen print of all confirmations made to complete the OIG/GSA Exclusion review online. Pharmacy is required to immediately remove any employee or contractor found to be on such lists from any work related directly or indirectly to all Federal Health Care Programs. The pharmacy is required to immediately notify NPS, in writing, of any exclusion of a staff member, contractor, etc. at: National Pharmaceutical Services Attn: Provider Relations PO Box 407 Boys Town, NE NPS is required to take action for noncompliance and will require the pharmacy to submit a CAP to document acknowledgement of the noncompliance and the course of action they will undertake to prevent future noncompliance. Any noncompliance may also be subject to review by the NPS Compliance Subcommittee, and the Network Provider Agreement may be subject to suspension or termination Diverted Pharmaceuticals Program Requirements All Florida Medicaid pharmacy providers will be required to perform the following functions when dispensing prescription drugs (tablets and capsule, excluding nitroglycerin containing products or medication that is required by the manufacturer to be dispensed in the manufacturer s original packaging) to a Florida Medicaid patient: Remove from original container and place in pharmacy vial. Prescription drugs that are in the dosage form of any of the following: creams, ointments, ophthalmics, inhalers, topical patches, otics, reconstituted medications, and injectables: Inscribe the following symbol on the outside of the original manufacturer s packaging by using an indelible marker and ensure that the symbol is clearly visible or remove the manufacturer label. M To ensure compliance, NPS may conduct audits. Findings from an initial audit will be shared with the pharmacy during the audit and the pharmacy will receive additional instruction of dispensing requirements. Findings of the audit may be forwarded to Florida Medicaid. Failure to comply with the dispensing requirements will result in sanctions as allowed in section , Florida Statues, or Chapter 59G, Florida Administrative Code. Pharmacies having deficiencies greater than 10% in a first re-audit shall be fined in the amount of $1,000 per violation. Pharmacies that have deficiencies of greater than 10% in a second re-audit may either be fined up to $5,000 per violation pursuant to Section , or terminated from the Medicaid Program Quality Management Programs Pharmacy are required to participate in quality management initiatives or other client-sponsored programs as requested by NPS and/or client. Pharmacy must also establish an internal quality management program for the purpose of detecting, documenting, assessing, and preventing quality-related events (QREs). At a minimum, such a quality management program should include provisions to: Initiate documentation of QREs as soon as possible after determining their occurrence. Analyze data collected in response to QREs to assess causes and contributing factors. Use the findings of the analysis to develop pharmacy systems and workflow processes designed to prevent QREs and improve outcomes for patients. Conduct a self-audit periodically to evaluate compliance with preventative procedures and to develop plans for National Pharmaceutical Services Pharmacy Provider Manual 75

76 improved future adherence to the quality management program. Report appropriately blinded QRE information to a nationally recognized error reporting program. National Pharmaceutical Services Pharmacy Provider Manual 76

77 Pharmacy Payments 12.1 Payment Cycles Pharmacy payment cycles are a function of plan Sponsor funding. Pharmacies receive payments in batches based on plan payment source. Payment to Pharmacy will be issued, mailed, or otherwise transmitted to Pharmacy for claims submitted by, or on behalf of, Pharmacy within 14 days of receipt of a clean electronic claim, or within 30 days of a clean claim submitted otherwise for Medicare Part D Plans. A clean claim means a claim that has no defect or impropriety (including any lack of any required substantiating documentation) or particular circumstance requiring special treatment that prevents timely payment of the claim from being made. A claim is deemed to be a clean claim if NPS or the Plan Sponsor does not notify the submitting network pharmacy of any deficiency in the claim within 10 days after an electronic claim is received or within 15 days after any other claim is received. Investigation of potential fraudulent pharmacy activity tolls the timelines associated with a clean claim. In the event NPS has concern regarding the legitimacy of claim data, NPS will notify the pharmacy that it is being placed on payment suspension within the timeline given above. If a submitted claim is not a clean claim, NPS or the Part D Sponsor must notify the submitting network pharmacy of such determination within the timeframes noted. Any notification by NPS regarding a claim that does not satisfy the clean claim requirements will specify all defects or improprieties in the claim and will list all additional information necessary for the proper processing and payment of the claim. Payment of a clean claim is considered to have been made on the date, on which the payment is transferred, for an electronic claim; or the payment is submitted to the United States Postal Service or common carrier for delivery, for any other claim. Claims will be considered not clean if they are based on prescriptions transferred from pharmacies that were terminated from the NPS network due to fraud, waste, or abuse Source of Funding All checks are printed and mailed to the pharmacy entity according to the payment cycles specified above. Payments to pharmacies are provided according to the terms and conditions of their Network Pharmacy Agreement. Pharmacies may elect to receive direct deposit or electronic funds transfer options using the 835 Health Care Electronic Remittance Advice. In order to receive the 835 File, the Pharmacy must have a secure FTP server to receive the file and accommodate standard transfer protocols. 835 Remittance Files Electronic 835 remittance files are available upon request from the pharmacy to Pharmacy_Relations@nps-pti.com. An 835 setup questionnaire and form can be sent to the pharmacy via fax and . Once the form is returned and reviewed, a determination will be made as to whether a security survey must be completed by the pharmacy. After all documents and requests are approved, NPS can push these files to your FTP site or mail them on a CD to your remittance address. The setup process can take up to four weeks to complete as it requires the coordination of both the Security and IT Departments on both sides (pharmacy and NPS). Please contact the NPS Provider Relations Department for additional information if your pharmacy is interested in receiving electronic payments and claims remittances Pharmacy Reconciliation Report For each check, NPS will provide a pharmacy reconciliation report. Unless otherwise arranged with NPS, these reports are provided in printed paper format and are mailed to the pharmacies within 10 days of the date of the paper check. Electronic remittance reports are available upon request. NPS can send these files to your FTP site. Please contact Provider Relations to request electronic remittance reports Pharmacy Payment Status Inquiries For inquires on the status of claim payments, lost checks, and/or duplicate remittance advice details, please contact the NPS Help Desk at National Pharmaceutical Services Pharmacy Provider Manual 77

78 Appendices State Regulatory Addendums Common Billing Errors Pharmacy Audit Appeal Form Medicare Member Rights and Responsibilities Notice Long Term Care Low Income Subsidy Collection Attestation National Pharmaceutical Services Pharmacy Provider Manual 78

79 State Regulatory Addendums A State Regulatory Appendix is attached hereto and made a part hereof. The State Regulatory Appendix contains various regulations, requirements, and laws ( requirements ) that are sometimes applicable to the arrangement between PTIPA, Network Pharmacy, and/or Sponsor and the providing of applicable Covered Services by Network Pharmacy. By way of example and not by way of limitation, the Centers for Medicare and Medicaid Services (CMS) Requirements would be applicable to CMS-affiliated Covered Services (e.g., Medicare recipients) and the Florida Requirements would relate to applicable Covered Services performed in Florida. Generally, the Requirements are applicable to Covered Services for Sponsors that are insurance companies, HMO(s), and governmental agencies and are usually not applicable to Sponsors that have self-funded plans. Network Pharmacy is required to comply with all applicable Requirements, and Pharmacy, by the providing of Covered Services, does acknowledge it will comply with such applicable Requirements. Minnesota Opioid Labeling All prescription labels or containers for all opiate-containing medications dispensed to outpatients must include the following notice: Caution: Opioid. Risk of overdose and addiction. New York Addendum- MCO This Addendum is entered into between Pharmaceutical Technologies Independent Practice Association, LLC ( PTIPA ) and Network pharmacy ( Network Pharmacy ). Whereas, New York law requires that entities arranging for the provision of pharmacy services for Managed Care Organizations ( MCO ) licensed under New York Law be a company organized under the laws of New York to operate as an independent practice association or otherwise exempt from such requirement. Whereas, PTIIPA is a New York limited liability company, organized under the laws of New York to operate as an independent practice association, and is a wholly-owned subsidiary of PTI. Whereas, PTIPA and Member Pharmacy desire to amend the Agreement to add IPA as a party to the Agreement and to otherwise amend the Agreement as set forth in this Addendum. Now, therefore, PTIPA and Network Pharmacy agree as follows: In the event any provision in this Addendum conflicts with the terms of the Agreement, the terms of this Addendum shall govern. To the extent that Network Pharmacy shall provide pharmacy services to Eligible Persons enrolled with a MCO licensed under New York Law, Network Pharmacy agrees to comply with any requirements for participation as a pharmacy in New York. Without limiting the generality of the foregoing, and notwithstanding anything in the Agreement to the contrary, Network Pharmacy agrees as follows: The New York Standard Clauses Appendix, attached hereto as Appendix A, is incorporated into the Agreement by reference and sets forth the New York State Standard Clause requirements applicable to IPA, MCO, and Network Pharmacy. PTIPA and Network Pharmacy shall comply with all provisions set forth in Appendix A. To the extent any provision set forth in the Agreement and this Addendum conflicts with any provision otherwise set forth in Appendix A, Appendix A shall control. New York Certification Regarding Lobbying Pursuant to 31 U.S.C and CFR Part 93, NPS requires certification that no Federally appropriated funds have been paid or will be paid to any person by or on behalf of Network Pharmacy for the purpose of influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with the award of any Federal loan, the entering into of any cooperative agreement, or the extension, continuation, renewal, amendment, or modification of any Federal contract, grant, loan, or cooperative agreement. New York pharmacies that meet these criteria will be required to complete and submit the Certification Regarding Lobbying, which is available on the Network Pharmacy Resources Portal. If now, or in the future, any funds other than Federally appropriated funds have been paid or will be paid to any person for the purpose of influencing or attempting to influence an officer or employee of any agency, a member of Congress, an officer or employee of a member of Congress, in connection with the award of any Federal Contract, the making of any Federal grant, the making of any Federal loan, the entering of any cooperative agreement, or the extension, continuation, renewal, amendment, or modification of any Federal contract, grant, loan, or cooperative Agreement, Network Pharmacy shall complete and submit a Disclosure Form to Report Lobbying, in accordance with its instructions, as included in the Appendix to this Manual. National Pharmaceutical Services Pharmacy Provider Manual 79

80 New York State Department of Health Standard Clauses for Managed Care Provider/IPA Contracts Notwithstanding any other provision of this agreement, contract, or amendment (hereinafter "the Agreement" or "this Agreement") the parties agree to be bound by the following clauses which are hereby made a part of the Agreement. Further, if this Agreement is between a Managed Care Organization and an IPA, or between an IPA and an IPA, such clauses must be included in IPA contracts with providers, and providers must agree to such clauses. A. Definitions For Purposes Of This Appendix "Managed Care Organization" or "MCO" shall mean the person, natural or corporate, or any groups of such persons, certified under Public Health Law Article 44, who enter into an arrangement, agreement or plan or any combination of arrangements or plans which provide or offer, or which do provide or offer, a comprehensive health services plan. "Independent Practice Association" or "IPA" shall mean an entity formed for the limited purpose of arranging by contract for the delivery or provision of health services by individuals, entities and facilities licensed or certified to practice medicine and other health professions, and, as appropriate, ancillary medical services and equipment, by which arrangements such health care providers and suppliers will provide their services in accordance with and for such compensation as may be established by a contract between such entity and one or more MCOs. "IPA" may also include, for purposes of this Agreement, a pharmacy or laboratory with the legal authority to contract with other pharmacies or laboratories to arrange for or provide services to enrollees of a New York State MCO. "Provider" shall mean physicians, dentists, nurses, pharmacists and other health care professionals, pharmacies, hospitals and other entities engaged in the delivery of health care services which are licensed and/or certified as required by applicable federal and state law. B. General Terms and Conditions 1) This Agreement is subject to the approval of the New York State Department of Health and if implemented prior to such approval, the parties agree to incorporate into this Agreement any and all modifications required by the Department of Health for approval or, alternatively, to terminate this Agreement if so directed by the Department of Health, effective sixty (60) days subsequent to notice, subject to Public Health Law 4403(6)(e). This Agreement is the sole agreement between the parties regarding the arrangement established herein. 2) Any material amendment to this Agreement is subject to the prior approval of the Department of Health (DOH), and any such amendment shall be submitted for approval at least 30 days, or ninety (90) days if the amendment adds or materially changes a risk sharing arrangement that is subject to DOH review, in advance of anticipated execution. To the extent the MCO provides and arranges for the provision of comprehensive health care services to enrollees served by the Medical Assistance Program, the MCO shall notify and/or submit a copy of such material amendment to DOH or New York City, as may be required by the Medicaid managed care contract between the MCO and DOH (or New York City) and/or the Family Health Plus contract between the MCO and DOH. 3) Assignment of an agreement between an MCO and (1) an IPA, (2) institutional network provider, or (3) medical group provider that serves five percent or more of the enrolled population in a county, or the assignment of an agreement between an IPA and (1) an institutional provider or (2) medical group provider that serves five percent or more of the enrolled population in a county, requires the prior approval of the Commissioner of Health. 4) The provider agrees, or if the Agreement is between the MCO and an IPA or between an IPA and an IPA, the IPA agrees and shall require the IPA's providers to agree, to comply fully and abide by the rules, policies and procedures that the MCO (a) has established or will establish to meet general or specific obligations placed on the MCO by statute, regulation, or DOH or State Insurance Department (SID) guidelines or policies and (b) has provided to the provider at least thirty (30) days in advance of implementation, including but not limited to: quality improvement/management; utilization management, including but not limited to precertification procedures, referral process or protocols, and reporting of clinical encounter data; member grievances; and provider credentialing. 5) The provider or, if the Agreement is between the MCO and an IPA, or between an IPA and an IPA, the IPA agrees, and shall require its providers to agree, to not discriminate against an enrollee based on color, race, creed, age, gender, sexual orientation, disability, place of origin, source of payment or type of illness or condition. National Pharmaceutical Services Pharmacy Provider Manual 80

81 6) If the provider is a primary care practitioner, the provider agrees to provide for twenty-four (24) hour coverage and back up coverage when the provider is unavailable. The provider may use a twenty-four (24) hour back-up call service provided appropriate 9.1consistent with the scope of their practice. 7) The MCO or IPA which is a party to this Agreement agrees that nothing within this Agreement is intended to, or shall be deemed to, transfer liability for the MCO s or IPA s own acts or omissions, by indemnification or otherwise, to a provider. 8) Notwithstanding any other provision of this Agreement, the parties shall comply with the provisions of the Managed Care Reform Act of 1996 (Chapter 705 of the Laws of 1996) and Chapter 551 of the Laws of 2006, and all amendments thereto. 9) To the extent the MCO enrolls individuals covered by the Medical Assistance and/or Family Health Plus programs, this Agreement incorporates the pertinent MCO obligations under the Medicaid managed care contract between the MCO and DOH (or New York City) and/or the Family Health Plus contract between the MCO and DOH as if set forth fully herein, including: a. The MCO will monitor the performance of the Provider or IPA under the Agreement, and will terminate the Agreement and/or impose other sanctions, if the Provider s or IPA s performance does not satisfy standards set forth in the Medicaid managed care and/or Family Health Plus contracts; b. The Provider or IPA agrees that the work it performs under the Agreement will conform to the terms of the Medicaid managed care contract between the MCO and DOH (or between the MCO and New York City) and/or the Family Health Plus contract between the MCO and DOH, and that it will take corrective action if the MCO identifies deficiencies or areas of needed improvement in the Provider s or IPA s performance; and c. The Provider or IPA agrees to be bound by the confidentiality requirements set forth in the Medicaid managed care contract between the MCO and DOH (or between the MCO and New York City) and/or the Family Health Plus contract between the MCO and DOH. d. The MCO and the Provider or IPA agree that a woman s enrollment in the MCO s Medicaid managed care or Family Health Plus product is sufficient to provide services to her newborn, unless the newborn is excluded from enrollment in Medicaid managed care or the MCO does not offer a Medicaid managed care product in the mother s county of fiscal responsibility. e. The MCO shall not impose obligations and duties on the Provider or IPA that are inconsistent with the Medicaid managed care and/or Family Health Plus contracts, or that impair any rights accorded to DOH, the local Department of Social Services, or the United States Department of Health and Human Services. 10. The parties to this Agreement agree to comply with all applicable requirements of the Federal Americans with Disabilities Act. 11. The Provider agrees, or if the Agreement is between the MCO and an IPA or between an IPA and an IPA, the IPA agrees and shall require the IPA s providers to agree, to comply with the HIV confidentiality requirements of Article 27-F of the Public Health Law. C. Payment; Risk Arrangements 1) Enrollee Non-liability. Provider agrees that in no event, including, but not limited to, nonpayment by the MCO or IPA, insolvency of the MCO or IPA, or breach of this Agreement, shall Provider bill, charge, collect a deposit from, seek compensation, remuneration or reimbursement from, or have any recourse against a subscriber, an enrollee or person (other than the MCO or IPA) acting on his/her/their behalf, for services provided pursuant to the subscriber contract or Medicaid Managed Care contract or Family Health Plus contract and this Agreement, for the period covered by the paid enrollee premium. In addition, in the case of Medicaid Managed Care, provider agrees that, during the time an enrollee is enrolled in the MCO, he/she/it will not bill the New York State Department of Health or the City of New York for Covered Services within the Medicaid Managed Care Benefit Package as set forth in the Agreement between the MCO and the New York State Department of Health. In the case of Family Health Plus, provider agrees that, during the time an enrollee is enrolled in the MCO, he/she/it will not bill the New York State Department of Health for Covered Services within the Family Health Plus Benefit Package, as set forth in the Agreement between the MCO and the New York State Department of Health. This provision shall not prohibit the provider, unless the MCO is a managed long term care plan designated as a Program of All-Inclusive Care for the Elderly (PACE), from collecting copayments, coinsurance amounts, or permitted deductibles, as specifically provided in the evidence of coverage, or fees for uncovered services delivered on a fee-for-service basis to a covered person provided that provider shall have advised the enrollee in writing that the service is uncovered and of the enrollee's liability therefor prior to providing the service. Where the provider has not been given a list of services covered by the MCO, and/or provider is uncertain as to whether a service is covered, the provider shall make reasonable efforts to contact the MCO and obtain a coverage determination prior to advising an enrollee as to coverage and liability for payment National Pharmaceutical Services Pharmacy Provider Manual 81

82 and prior to providing the service. This provision shall survive termination of this Agreement for any reason, and shall supersede any oral or written agreement now existing or hereafter entered into between provider and enrollee or person acting on his or her behalf. 2) Coordination of Benefits (COB). To the extent otherwise permitted in this Agreement, the provider may participate in collection of COB on behalf of the MCO, with COB collectibles accruing to the MCO or to the provider. However, with respect to enrollees eligible for medical assistance, or participating in Child Health Plus or Family Health Plus, the provider shall maintain and make available to the MCO records reflecting COB proceeds collected by the provider or paid directly to enrollees by third party payers, and amounts thereof, and the MCO shall maintain or have immediate access to records concerning collection of COB proceeds. 3) The parties agree to comply with and incorporate the requirements of Physician Incentive Plan (PIP) Regulations contained in 42 CFR 438.6(h), 42 CFR , and 42 CFR into any contracts between the contracting entity (provider, IPA, hospital, etc.) and other persons/entities for the provision of services under this Agreement. No specific payment will be made directly or indirectly under the plan to a physician or physician group as an inducement to reduce or limit medically necessary services furnished to an enrollee. D. Records; Access 1) Pursuant to appropriate consent/authorization by the enrollee, the provider will make the enrollee's medical records and other personally identifiable information (including encounter data for government-sponsored programs) available to the MCO (and IPA if applicable), for purposes including preauthorization, concurrent review, quality assurance, provider claims processing and payment. The provider will also make enrollee medical records available to the State for management audits, financial audits, program monitoring and evaluation, licensure or certification of facilities or individuals, and as otherwise required by state law. The provider shall provide copies of such records to DOH at no cost. The provider (or IPA if applicable) expressly acknowledges that he/she/it shall also provide to the MCO and the State (at no expense to the State), on request, all financial data and reports, and information concerning the appropriateness and quality of services provided, as required by law. These provisions shall survive termination of the contract for any reason. 2) When such records pertain to Medicaid or Family Health Plus reimbursable services the provider agrees to disclose the nature and extent of services provided and to furnish records to DOH and/or the United States Department of Health and Human Services, the County Department of Social Services, the Comptroller of the State of New York, the New York State Attorney General, and the Comptroller General of the United States and their authorized representatives upon request. This provision shall survive the termination of this Agreement regardless of the reason. 3) The parties agree that medical records shall be retained for a period of six (6) years after the date of service, and in the case of a minor, for three (3) years after majority or six (6) years after the date of service, whichever is later, or for such longer period as specified elsewhere within this Agreement. This provision shall survive the termination of this Agreement regardless of the reason. 4) The MCO and the provider agree that the MCO will obtain consent directly from enrollees at the time of enrollment or at the earliest opportunity, or that the provider will obtain consent from enrollees at the time service is rendered or at the earliest opportunity, for disclosure of medical records to the MCO, to an IPA or to third parties. If the Agreement is between an MCO and an IPA, or between an IPA and an IPA, the IPA agrees to require the providers with which it contracts to agree as provided above. If the Agreement is between an IPA and a provider, the provider agrees to obtain consent from the enrollee if the enrollee has not previously signed a consent for disclosure of medical records. E. Termination and Transition 1) Termination or non-renewal of an agreement between an MCO and an IPA, institutional network provider, or medical group provider that serves five percent or more of the enrolled population in a county, or the termination or non-renewal of an agreement between an IPA and an institutional provider or medical group provider that serves five percent or more of the enrolled population in a county, requires notice to the Commissioner of Health. Unless otherwise provided by statute or regulation, the effective date of termination shall not be less than 45 days after receipt of notice by either party, provided, however, that termination, by the MCO may be effected on less than 45 days notice provided the MCO demonstrates to DOH s satisfaction prior to termination that circumstances exist which threaten imminent harm to enrollees or which result in provider being legally unable to deliver the covered services and, therefore, justify or require immediate termination. 2) If this Agreement is between the MCO and a health care professional, the MCO shall provide to such health care professional a written explanation of the reasons for the proposed contract termination, other than non-renewal, and an opportunity for National Pharmaceutical Services Pharmacy Provider Manual 82

83 a review as required by state law. The MCO shall provide the health care professional 60 days notice of its decision to not renew this Agreement. 3) If this Agreement is between an MCO and an IPA, and the Agreement does not provide for automatic assignment of the IPA s provider contracts to the MCO upon termination of the MCO/IPA contract, in the event either party gives notice of termination of the Agreement, the parties agree, and the IPA's providers agree, that the IPA providers shall continue to provide care to the MCO's enrollees pursuant to the terms of this Agreement for 180 days following the effective date of termination, or until such time as the MCO makes other arrangements, whichever first occurs. This provision shall survive termination of this Agreement regardless of the reason for the termination. 4) Continuation of Treatment. The provider agrees that in the event of MCO or IPA insolvency or termination of this contract for any reason, the provider shall continue, until medically appropriate discharge or transfer, or completion of a course of treatment, whichever occurs first, to provide services pursuant to the subscriber contract, Medicaid Managed Care contract, or Family Health Plus contract, to an enrollee confined in an inpatient facility, provided the confinement or course of treatment was commenced during the paid premium period. For purposes of this clause, the term "provider" shall include the IPA and the IPA s contracted providers if this Agreement is between the MCO and an IPA. This provision shall survive termination of this Agreement. 5) Notwithstanding any other provision herein, to the extent that the provider is providing health care services to enrollees under the Medicaid Program and/or Family Health Plus, the MCO or IPA retains the option to immediately terminate the Agreement when the provider has been terminated or suspended from the Medicaid Program. 6) In the event of termination of this Agreement, the provider agrees, and, where applicable, the IPA agrees to require all participating providers of its network to assist in the orderly transfer of enrollees to another provider. F. Arbitration To the extent that arbitration or alternative dispute resolution is authorized elsewhere in this Agreement, the parties to this Agreement acknowledge that the Commissioner of Health is not bound by arbitration or mediation decisions. Arbitration or mediation shall occur within New York State, and the Commissioner of Health will be given notice of all issues going to arbitration or mediation, and copies of all decisions. G. IPA-Specific Provisions Any reference to IPA quality assurance (QA) activities within this Agreement is limited to the IPA s analysis of utilization patterns and quality of care on its D. Records; Access 1) Pursuant to appropriate consent/authorization by the enrollee, the provider will make the enrollee's medical records and other personally identifiable information (including encounter data for government-sponsored programs) available to the MCO (and IPA if applicable), for purposes including preauthorization, concurrent review, quality assurance, provider claims processing and payment. The provider will also make enrollee medical records available to the State for management audits, financial audits, program monitoring and evaluation, licensure or certification of facilities or individuals, and as otherwise required by state law. The provider shall provide copies of such records to DOH at no cost. The provider (or IPA if applicable) expressly acknowledges that he/she/it shall also provide to the MCO and the State (at no expense to the State), on request, all financial data and reports, and information concerning the appropriateness and quality of services provided, as required by law. These provisions shall survive termination of the contract for any reason. 2) When such records pertain to Medicaid or Family Health Plus reimbursable services the provider agrees to disclose the nature and extent of services provided and to furnish records to DOH and/or the United States Department of Health and Human Services, the County Department of Social Services, the Comptroller of the State of New York, the New York State Attorney General, and the Comptroller General of the United States and their authorized representatives upon request. This provision shall survive the termination of this Agreement regardless of the reason. 3) The parties agree that medical records shall be retained for a period of six (6) years after the date of service, and in the case of a minor, for three (3) years after majority or six (6) years after the date of service, whichever is later, or for such longer period as specified elsewhere within this Agreement. This provision shall survive the termination of this Agreement regardless of the reason. 4) The MCO and the provider agree that the MCO will obtain consent directly from enrollees at the time of enrollment or at the earliest opportunity, or that the provider will obtain consent from enrollees at the time service is rendered or at the earliest opportunity, for disclosure of medical records to the MCO, to an IPA or to third parties. If the Agreement is between an MCO and an IPA, or between an IPA and an IPA, the IPA agrees to require the providers with which it contracts to agree as National Pharmaceutical Services Pharmacy Provider Manual 83

84 provided above. If the Agreement is between an IPA and a provider, the provider agrees to obtain consent from the enrollee if the enrollee has not previously signed a consent for disclosure of medical records. E. Termination and Transition 1) Termination or non-renewal of an agreement between an MCO and an IPA, institutional network provider, or medical group provider that serves five percent or more of the enrolled population in a county, or the termination or non-renewal of an agreement between an IPA and an institutional provider or medical group provider that serves five percent or more of the enrolled population in a county, requires notice to the Commissioner of Health. Unless otherwise provided by statute or regulation, the effective date of termination shall not be less than 45 days after receipt of notice by either party, provided, however, that termination, by the MCO may be effected on less than 45 days notice provided the MCO demonstrates to DOH s satisfaction prior to termination that circumstances exist which threaten imminent harm to enrollees or which result in provider being legally unable to deliver the covered services and, therefore, justify or require immediate termination. 2) If this Agreement is between the MCO and a health care professional, the MCO shall provide to such health care professional a written explanation of the reasons for the proposed contract termination, other than non-renewal, and an opportunity for a review as required by state law. The MCO shall provide the health care professional 60 days notice of its decision to not renew this Agreement. 3) If this Agreement is between an MCO and an IPA, and the Agreement does not provide for automatic assignment of the IPA s provider contracts to the MCO upon termination of the MCO/IPA contract, in the event either party gives notice of termination of the Agreement, the parties agree, and the IPA's providers agree, that the IPA providers shall continue to provide care to the MCO's enrollees pursuant to the terms of this Agreement for 180 days following the effective date of termination, or until such time as the MCO makes other arrangements, whichever first occurs. This provision shall survive termination of this Agreement regardless of the reason for the termination. 4) Continuation of Treatment. The provider agrees that in the event of MCO or IPA insolvency or termination of this contract for any reason, the provider shall continue, until medically appropriate discharge or transfer, or completion of a course of treatment, whichever occurs first, to provide services pursuant to the subscriber contract, Medicaid Managed Care contract, or Family Health Plus contract, to an enrollee confined in an inpatient facility, provided the confinement or course of treatment was commenced during the paid premium period. For purposes of this clause, the term "provider" shall include the IPA and the IPA s contracted providers if this Agreement is between the MCO and an IPA. This provision shall survive termination of this Agreement. 5) Notwithstanding any other provision herein, to the extent that the provider is providing health care services to enrollees under the Medicaid Program and/or Family Health Plus, the MCO or IPA retains the option to immediately terminate the Agreement when the provider has been terminated or suspended from the Medicaid Program. 6) In the event of termination of this Agreement, the provider agrees, and, where applicable, the IPA agrees to require all participating providers of its network to assist in the orderly transfer of enrollees to another provider. F. Arbitration To the extent that arbitration or alternative dispute resolution is authorized elsewhere in this Agreement, the parties to this Agreement acknowledge that the Commissioner of Health is not bound by arbitration or mediation decisions. Arbitration or mediation shall occur within New York State, and the Commissioner of Health will be given notice of all issues going to arbitration or mediation, and copies of all decisions. G. IPA-Specific Provisions Any reference to IPA quality assurance (QA) activities within this Agreement is limited to the IPA s analysis of utilization patterns and quality of care on its own behalf and as a service to its contract providers. Texas Department of Insurance, Workers Compensation Insurance Carriers Pursuant to Texas Labor Code Section (d) Notification to Health Care Provider notification is available which contains the information we may elect to provide to any person, other than an injured employee, to whom access has been provided to the contractual fee arrangement that National Pharmaceutical Services (NPS) has with the pharmacy. This applies to contractual fee arrangements for services through the NPS network at rates inconsistent with the Texas workers compensation pharmacy fee guidelines. As a pharmacy provider within the NPS network, pharmacies can access notification of new, changed or expired contractual relationships with Texas carriers on an as needed basis or as required by the law via updates from time to time. This notification can be accessed through the NPS Portal. National Pharmaceutical Services Pharmacy Provider Manual 84

85 Common Billing Errors Drug Bill As Unit Common Directions Oral Tablets/Capsules Actonel 35 mg (4 tablets) Actonel 70 mg (4 tablets) Actonel 150 mg (1 tablet) 4 Each One tablet weekly or one tablet twice weekly Correct Method of Billing 4 or 8 tablets for 28 days 4 Each One tablet weekly 4 tablets for 28 days Common Billing Errors Billing 4 tablets for a 4-day supply or 8 tablets for an 8-day supply Billing 4 tablets for a 4-day supply 1 Each One tablet monthly 1 tablet for 30 days Billing 1 tablet for a 1-day supply Boniva 1 Each One tablet monthly 1 tablet for 30 days Billing 1 tablet for a 1-day supply Chloroquine 1 Each One tablet weekly 4 tablets for 28 days Cabergoline 1 Each One tablet twice weekly 8 tablets for 28 days Fosamax 70 mg (4 tablets) Helidac Pac (56 tablets) Ibrance 1 Each 4 Each One tablet weekly 4 tablets for 28 days 56 Each Varies 56 tablets for 14 days One capsule daily for 21 days then off for 7 days 21 tablets for 28 days Maxalt & Maxalt MLT 1 Each Up to 30 mg in 24 hours 12 tablets for 30 days Mefloquine 1 Each One tablet weekly 4 tablets for 28 days Plan B (2 tablets) Plan B One-Step (1 tablet) Prevpac (14 cards) Prozac Weekly (4 tablets) 2 Each 1 Each One tablet stat then one tablet in 12 hours 112 Each One card daily One tablet as soon as possible after intercourse Billing 4 tablets for a 4-day supply Billing 8 tablets for an 8-day supply Billing 4 tablets for a 4-day supply Billing 224 tablets for a 14-day supply or 56 tablets for a 56-day supply Billing 21 tablets for a 21-day supply Billing 12 tablets for a 12-day supply Billing 4 tablets for a 4-day supply 2 tablets for 1 day Billing 1 tablet for a 1-day supply 1 tablet for 1 day 112 tablets for 14 days 4 Each One tablet weekly 4 tablets for 28 days Relpax 1 Each Up to 80 mg in 24 hours 12 tablets for 30 days Revlimid 1 Each Seasonale, Seasonique, Lo-Seasonique Sporanox Pulse Pac (28 capsules) Up to 25 mg per day (often taken 21 of every 28 days) Varies 91 Each One tablet daily 91 tablets for 91 days 28 Each 4 capsules daily for 1 week followed by 3 weeks off 28 capsules for 28 days Sumatriptan 1 Each Up to 200 mg in 24 hours 18 tablets for 30 days Valcyte 450 mg 1 Each Two tablets daily or rarely four tablets daily 60 or 120 tablets for 30 days Billing greater than 1 tablet per prescription Billing 14 cards for a 14-day supply Billing 4 tablets for a 4-day supply Billing 12 tablets for a 12-day supply Billing 28 for a 28-day supply or use as directed directions Billing 91 tablets for a 30-day supply Billing 28 capsules for a 7-day supply or 84 capsules for a 28- day supply or Billing 18 tablets for an 18-day supply Billing number of tablets as the days supply National Pharmaceutical Services Pharmacy Provider Manual 85

86 Drug Bill As Unit Common Directions Correct Method of Billing Zomig & Zomig ZMT 1 Each Up to 10 mg in 24 hours 12 tablets for 30 days Ophthalmics Restasis 60 Each Zioptan 30 Each Powders Cholestyramine (packets) 1 Each or g One drop in both eyes twice daily One drop in each affected eye daily Once or twice daily Common Billing Errors Billing 12 tablets for a 12-day supply 60 for 30 days Billing 120 for a 30-day supply 30 for 30 days Billing 60 for a 30-day supply 60 packets for 30 days Billing wrong package size Cholestyramine (can) 378 g One scoop once or twice daily 378 g for 30 days Billing wrong package size Gavilyte-G 4000 ml Varies 4000 ml for 1 day Billing 1 for a 1-day supply GoLytely (1 jug) 4000 ml Varies 4000 ml for 1 day Billing 1 for a 1-day supply MoviPrep (1 box) 1 Each Varies 1 for 1 day Billing wrong package size Suprep (1 box) 354 ml Varies 354 ml for 1 day Billing 1 for a 1-day supply Zmax 1 Each Entire contents 1 for 1 day Billing for total milliliters Rectals/Vaginals Crinone 4% Vaginal Gel (6 applicators) Crinone 8% Vaginal Gel (15 applicators) Diastat Twin Pack (2 applicator) 6.75 g Varies Varies Billing number of applicators g Varies Varies Billing number of applicators 1 Each Max 5 treatments/month separated by 5 days 1 package for 5 days Estrace Cream 42.5 g 1 application weekly 42.5 g for 30 days Billing 2 applicators instead of 1 Twin Pack Billing greater than 1 tube per month Estring 1 Each One ring every 90 days 1 ring for 90 days Billing 1 ring for a 28-day supply Femring 1 Each One ring every 90 days 1 ring for 90 days Billing 1 for a 28-day supply Lidocaine- Hydrocortisone Kit Mesalamine Kit (generic only 1 box = 4 kits, 1 kit = 4 bottles) 1 Kit Nuvaring 1 Each One tube per rectum twice daily or topically 2-3 times daily 1 kit for 10 days (rectal use) or 6 days (topical use) 4 Kits One enema daily 4 for 28 days One ring for 3 weeks then remove for 1 week Premarin Cream 30 g 1 application weekly 30 g for 30 days Rowasa Kit (brand only 28 bottles) Billing for grams or billing number of tubes Billing number of bottles or number of boxes 1 ring for 28 days Billing 1 ring for a 1-day supply Billing greater than 1 tube per month 1 Each One enema daily 1 for 28 days Billing number of bottles Vagifem 1 Each One tablet twice weekly 8 tablets for 28 days Diabetic Supplies Billing more than than 8 tablets per 28 days Control Solution 1 Each Varies Varies Billing per milliliters Glucometer 1 Kit Varies Varies Billing more than 1 kit Lancets 1 Each Varies Varies Use as directed directions Syringes 1 Each Varies Varies Use as directed directions Test Strips 1 Each Varies Varies Use as directed directions National Pharmaceutical Services Pharmacy Provider Manual 86

87 Drug Bill As Unit Common Directions Devices Ortho All-Flex 1 Each Use as directed prior to intercourse Correct Method of Billing 1 for 30 days Common Billing Errors Billing 1 diaphragm for a 1-day supply Zoladex 1 Each One monthly 1 for 30 days Billing 1 for a 1-day supply Topicals Aldara 1 Each Apply 2-5 times weekly 12 to 24 packets for 28 days Androgel 1% Pump 150 g Apply 4 metered doses daily 150 g for 30 days Androgel 1% 5-g Packets Androgel 1.62% Pump Androgel 1.62% 2.5-g packets 150 g Apply contents of 1 packet daily 75 g Apply 2 metered doses daily 75 g for 30 days 75 g Apply contents of 1 packet daily Billing 12 packets for a 12-day supply Billing greater than 150 for a 30- day supply 150 g for 30 days Billing for number of packets Billing 1 pump for a 30-day supply or billing 75 g for a 75-day supply 75 g for 30 days Billing number of packets Centany 2% 1 Kit Varies Varies Billing for grams Cordran Tape 1 Each Varies Varies Billing for length of tape Penlac 6.6 ml Apply topically 6.6 ml for 30 days Billing for more than 6.6 ml per month Picato 0.015% 3 Each One tube daily for 3 days 3 for 3 days Billing 9 for 3 days Picato 0.05% 2 Each One tube daily for 2 days 2 for 2 days Billing 4 for 2 days Tretin-X Kit 1 Kit Apply once daily 1 for 30 days Billing for grams Topical Patches Androderm 1 Each Apply one patch daily 30 patches for 30 days Billing per gram Catapres TTS 1 Each One patch weekly 4 patches for 28 days Climara Patch 1 Each One patch weekly 4 patches for 28 days CombiPatch 8 Each One patch twice weekly 8 patches for 28 days Sancuso 1 Each One patch per round of chemo, worn up to 7 days Up to 4 patches for 28 days Billing 4 patches for a 4-day supply Billing 4 patches for a 4-day supply Billing 8 patches for an 8-day supply Billing 4 patches for a 4-day supply Transderm Scop 1 Each One patch every 3 days 1 patch for 3 days Billing 1 patch for a 1-day supply Vivelle Dot 1 Each One patch twice weekly 8 patches for 28 days Xulane 1 Each Immunizations Adacel Boostrix Influenza vaccines (IM & intradermal administration) 0.5 ml Varies One patch weekly for 3 weeks then off for 1 week 0.5 ml One injection annually Pneumovax ml Varies Prevnar ml Varies 3 patches for 28 days 0.5 ml for days supply up to plan limitation 0.5 ml for days supply up to plan limitation 0.5 ml for days supply up to plan limitation 0.5 ml for days supply up to plan limitation Billing 8 patches for an 8-day supply Billing 3 patches for a 21-day supply Billing number of syringes Billing number of syringes Billing number of syringes Billing number of syringes National Pharmaceutical Services Pharmacy Provider Manual 87

88 Drug Bill As Unit Common Directions Zostavax 1 Each One injection per lifetime Injections Correct Method of Billing 1 for days supply up to plan limitation Common Billing Errors Billing > 1 per lifetime Actimmune 0.5 ml Three injections weekly 6 ml for 28 days Billing number of syringes Aranesp Per ml One injection weekly Varies Billing number of syringes Arcalyst 1 Each One injection weekly 4 vials for 28 days Billing number of milliliters Arixtra Per ml One injection daily Varies Billing number of syringes Avonex Kit (pens or prefilled syringes) Avonex Kit (powder for injection) 1 Kit One injection weekly 1 kit for 28 days Billing number of pens/syringes 4 Each One injection weekly 4 for 28 days Billing number of kits or billing 4 syringes for a 4-day supply Betaseron 14 ml One injection every other day 14 for 30 days Billing 14 for a 14-day supply Boniva injection 3 ml One injection every 3 months 3 ml for 90 days Billing 1 syringe Bydureon injection 4 Each One injection weekly 4 for 28 days Billing 4 for a 4-day supply Byetta 5 mcg 1.2 ml One injection twice daily 1.2 ml for 30 days Byetta 10 mcg 2.4 ml One injection twice daily 2.4 ml for 30 days Caverject Impulse (2 trays) 1 Kit Cimzia (2 syringes) 1 Kit One injection up to 3 times weekly Maintenance dosing: Two injections every 4 weeks or one injection every 2 weeks Billing 60 for a 30-day supply Billing 60 for a 30-day supply 6 kits for 28 days Billing for total doses 1 kit for 28 days Billing for milliliters or billing number of injections Cinryze 1 Each Varies Varies Billing for milliliters Copaxone 20 mg (30 syringes) Copaxone 40 mg (12 syringes) Depo-Provera 150 mg 1 ml One injection daily 30 ml for 30 days Billing number of packages 1 ml One injection twice weekly 8 ml for 28 days 1 Each Once every 90 days 1 for 90 days Billing 12 syringes for a 12-day supply Billing 1 injection for a 1-day supply Dysport 1 Each Varies Varies Billing for milliliters Edex (2 syringes) 1 Each One injection up to 3 times weekly 6 kits for 28 days Billing for total doses Enbrel 25 mg Per ml One injection twice weekly 8 ml for 28 days Billing number of syringes Enbrel 50 mg Per ml One injection weekly 3.92 ml for 28 days Billing number of syringes EpiPen (2-pak) EpiPen Jr (2-pak) Epogen Euflexxa Orthovisc Synvisc 2 Each One injection as needed Varies Billing as a kit Per ml 2 ml One injection one to three times weekly One injection per affected knee weekly Varies 1 knee: 8 for 28 days 2 knees: 16 for 28 days Billing number of syringes Billing for number of vials Extavia 1 ml Varies Varies Billing number of milliliters Firmagon 1 Each One injection every four weeks 1 every 28 days Billing number of milliliters National Pharmaceutical Services Pharmacy Provider Manual 88

89 Drug Bill As Unit Common Directions Correct Method of Billing Forteo (1 pen) 2.4 ml One injection daily 2.4 ml for 28 days Common Billing Errors Billing for total doses or number of pens Fuzeon 60 Each One injection twice daily 60 for 30 days Billing for total doses Ganirelix 0.5 ml One injection daily Varies Billing number of syringes Glassia 1 Each Varies Varies Billing number of grams Haldol Deconoate Per ml One injection monthly 1 for 28 days Billing number of syringes H.P. Acthar 5 ml Varies Humira 2 Each Imitrex Injection (2 doses) 1 Kit One injection every other week One injection followed by another if necessary 5 ml or 10 ml for calculated days supply 2 for 28 days Varies Billing number of vials Billing 2 injections for a 2-day supply or billing for ml Billing number of cartridges Insulin Per ml Varies Varies Use as directed directions Intron A Pen 1 Each Varies Varies Billing number of doses Lovenox Per ml One injection 1-2 x daily Varies Billing number of syringes Lupron Depot 1 Kit One injection every 1 to 6 months (varies by strength) 1 for 30 days to 180 days Billing 1 injection for a 1-day supply Neupogen Per ml Varies Varies Billing number of syringes Novarel (10mL vial) 1 Each Varies Varies Billing for total milliliters Nplate 1 Each Varies Varies Billing for milliliters Ovidrel 0.5 ml Varies Varies Billing number of syringes Pegasys (4 syringes) 1 Kit One injection weekly 1 for 28 days Billing number of syringes Peg-Intron 1 Each One injection weekly 4 for 28 days Billing 4 syringes/ 4-day supply Pregnyl (10 ml vial) 1 Each Varies Varies Billing for total milliliters Procrit 1 ml One vial (1 ml) weekly 4 ml for 28 days Billing 4 ml for a 4-day supply Prolastin-C 1 Each Varies Varies Billing number of milliliters Prolia 1 ml One injection every 6 months 1 for 180 days or day supply up to plan limitation Billing 1 syringe for a 1-day supply Rebif 0.5 ml Three injections weekly 6 ml for 28 days Billing number of syringes Relistor 0.6 ml Varies Varies Billing number of vials RhoGAM 1 Each Varies Varies Billing for milliliters or grams Risperdal Consta 1 Each One injection every 2 weeks 2 for 28 days Billing > than 2 per month Simponi 50 mg 0.5 ml One injection once a month 0.5 ml for 30 days Billing number of vials Somatuline 60 mg 0.2 ml Varies Varies Billing number of vials Somatuline 90 mg 0.3 ml Varies Varies Billing number of vials Somatuline 120 mg 0.5 ml Varies Varies Billing number of vials Stelara 45 mg Stelara 90 mg 0.5 ml One injection on day 1, day 28, then every 12 weeks 0.5 ml for 28 or 84 days Billing number of vials SymlinPen ml Varies Varies Billing number of pens or boxes SymlinPen ml Varies Varies Billing number of pens or boxes Torisel 1 ml Varies Varies Billing for reconstituted volume Treanda 1 Each Varies Varies Billing for number of injections Tyvaso 2.9 ml Varies Varies Billing for number of ampules National Pharmaceutical Services Pharmacy Provider Manual 89

90 Drug Bill As Unit Common Directions Correct Method of Billing Common Billing Errors Vibativ 1 Each Varies Varies Billing for milliliters Inhalers Advair Diskus 60 Each One inhalation twice daily 60 for 30 days Billing for number of devices Advair HFA 12 g Two inhalations twice daily 12 for 30 days Billing for total doses Alvesco 6.1 g Max of 4 puffs per day 6.1 for 30 days Billing for total doses Anoro Ellipta (1 device/60 blister) 60 Each One inhalation daily 60 blisters for 60 days Billing number of devices Asmanex Twisthaler 1 Each One to two inhalations daily 1 for 30 days Billing for total doses or grams Atrovent HFA 12.9 g Max of 12 puffs per day 12.9 g for 30 days Billing for total doses Combivent Respimat 4 g One inhalation four times daily 4 g for 30 days Billing for total doses Flovent Diskus 60 Each One inhalation twice daily 60 for 30 days Billing for number of diskus Flovent HFA 110/ g Max of 8 puffs per day 12 for 30 days 24 for 30 days Billing for total doses Flovent HFA g Max of 4 puffs per day 10.6 for 30 days Billing for total doses Fortical 3.7 ml One inhalation every day 3.7 ml for 28 days Billing > than 3.7 ml/month Lazanda 1 Each Varies 1 for 4 days Billing for total doses ProAir HFA 8.5 g Max of 12 puffs per day Proventil HFA 6.7 g Max of 12 puffs per day 8.5 g for calculated days supply 6.7 g for calculated days supply Billing for total doses Billing for total doses Pulmicort Flexhaler 1 Each Max of 8 puffs per day 1 for 28 days Billing for total doses Pulmozyme 2.5 ml One amp once daily 75 ml for 30 days Billing for number of amps Qvar g Max of 8 puffs per day 8.7 g for 30 days 17.4 g for 30 days Billing for total doses Qvar g Max of 4 puffs per day 8.7 g for 30 days Billing for total doses Serevent Diskus 60 Each One inhalation twice daily 60 for 30 days Billing for number of diskus Spiriva HandiHaler (1 device/30 caps) 30 Each Inhale contents of one capsule daily 30 capsules for 30 days Billing number of devices Spiriva Respimat 4 g Two inhalations daily 4 g for 30 days Billing for total doses Symbicort 10.2 g Max of 4 puffs per day 10.2 g for 30 days Billing for total doses Tobi 5 ml One amp twice daily 280 ml for 28 days Billing for number of amps Ventolin HFA 18 g Max of 12 puffs per day Xopenex HFA 15 g Max of 12 puffs per day Nasal Sprays DDAVP (desmopressin) 1 for calculated days supply 1 for calculated days supply Billing for total doses Billing for total doses 2.5 ml Varies Varies Billing for total doses Nascobal 4 Each 1 spray weekly 4 for 28 days Billing for ml National Pharmaceutical Services Pharmacy Provider Manual 90

91 MAC Pricing Appeal Form Claims being reimbursed at contracted AWP discounts, submitted Usual and Customary or submitted Gross Amount Due, do NOT qualify for review or an appeals exception. Contact Information Contact Name: Contact Phone Number: Contact Fax Number: Contact Pharmacy Information Pharmacy name: NCPDP #: NPI#: Member Information Member ID: Group Number: Member DOB: Member Copay: Claim Information Authorization Number: BIN #: PCN: Rx #: 11 Digit NDC: Fill Date: Product Name & Strength: Comments: Invoice Must submit invoice showing NDC of the price being disputed. If the invoice is NOT attached, your appeal will not be considered. Appeal Review Information FOR INTERNAL USE OF THE NPS MAC APPEAL COMMITTEE Thank you for submitting a complete appeal form. We will notify you (one time only at the contact information listed above) of the results of the appeal.

92 Pharmacy Audit Appeals National Pharmaceutical Services (NPS) offers an appeals process for participating pharmacies that have been audited. This process provides pharmacies the opportunity to respond to audit results by providing additional documentation that supports the manner in which audited prescriptions were dispensed and submitted for payment. NPS allows pharmacies to appeal audit results when there is evidence to support the pharmacy s position or there are extraordinary circumstances that impacted the audit results. All supporting documentation submitted will be reviewed according to the terms of the Network Pharmacy Agreement, NPS Pharmacy Provider Manual and applicable State and Federal laws and regulations. Charge backs that are assessed for lack of response to an audit request will not be reconsidered. In order to submit an appeal, pharmacies must complete and sign the section below and attach the completed Pharmacy Audit Appeal Form. Supporting documentation for each prescription that is part of the appeal must be included. Mail appeals to: National Pharmaceutical Services, Inc. Attn: Pharmacy Audit Appeals PO Box 407 Boys Town, NE Or fax to: Attn: Pharmacy Audit Appeals Pharmacy Request for Appeal Pharmacy Name: NABP: NPI: Pharmacist in Charge: Date of Audit: As a pharmacy representative submitting this appeal, I attest that the documentation submitted for review is true and correct, was used when dispensing the prescription and has not been altered, back-dated, or re-created after the order was filled. Pharmacy Representative Signature: Date: Printed Name:

93 Pharmacy Audit Appeal Form Complete a separate form for each prescription that is part of the appeal. Prescription #: Medication Name: Dates of dispensing being appealed: 1. Initial Audit Finding is Regarding (check all that apply) Invalid Days Supply Use as Directed Compound Billing Error Quantity Over Dispensed Quantity Billing Error Other Invalid DAW Missing Hardcopy or Signature Log 2. Reason for Appeal: Documentation enclosed supports manner of dispensing Initial audit finding does not match pharmacy records Other: 3. Statement: Please explain the nature of this appeal request, including any circumstances that contributed to the manner of dispensing for this prescription. If documentation that was not provided at the time of the audit is being submitted, please explain why this documentation was not initially provided. (Attach additional sheets if necessary.) 4. Documentation Enclosed (Please attach supporting documentation to this form) Original hardcopy Pharmacy Computer System documentation Prescriber Letter Other (describe):

94 OMB Approval No Enrollee s Name: Drug and Prescription Number: (Optional) (Optional) Medicare Prescription Drug Coverage and Your Rights Your Medicare rights You have the right to request a coverage determination from your Medicare drug plan if you disagree with information provided by the pharmacy. You also have the right to request a special type of coverage determination called an exception if you believe: you need a drug that is not on your drug plan s list of covered drugs. The list of covered drugs is called a formulary; a coverage rule (such as prior authorization or a quantity limit) should not apply to you for medical reasons; or you need to take a non-preferred drug and you want the plan to cover the drug at the preferred drug price. What you need to do You or your prescriber can contact your Medicare drug plan to ask for a coverage determination by calling the plan s toll-free phone number on the back of your plan membership card, or by going to your plan s website. You or your prescriber can request an expedited (24 hour) decision if your health could be seriously harmed by waiting up to 72 hours for a decision. Be ready to tell your Medicare drug plan: 1. The name of the prescription drug that was not filled. Include the dose and strength, if known. 2. The name of the pharmacy that attempted to fill your prescription. 3. The date you attempted to fill your prescription. 4. If you ask for an exception, your prescriber will need to provide your drug plan with a statement explaining why you need the off-formulary or non-preferred drug or why a coverage rule should not apply to you. Your Medicare drug plan will provide you with a written decision. If coverage is not approved, the plan s notice will explain why coverage was denied and how to request an appeal if you disagree with the plan s decision. Refer to your plan materials or call Medicare for more information. Form CMS

95 Long Term Care Pharmacy Low-Income Subsidy Cost Sharing Collection Certification Attestation The Following is guidance for long term care Pharmacies for claims billed to National Pharmaceutical Services (NPS), BIN#: , PCN: DNPS, NCPDP patient location qualifier, 307-C7: 03, encompassing claims for beneficiaries residing in LTC facilities and the collection of Copayments or the submission of Best Available Evidence. Certification Overview and Requirements 1. As defined by the Medicare Prescription Drug Benefit Plan Final Rules, long term care (LTC) facilities include skilled nursing facilities as defined under Title XVIII of the Social Security Act (the Act), or a medical institution or nursing facility for which Medicaid makes payment throughout a month as defined under Title XIX of the Act. 2. CMS states that dual-eligible beneficiaries are exempt from the out-of-pocket expenses of Medicare Part D, provided that they have been nursing home s for at least 30 days and are in a covered stay. From time to time, the Low Income Subsidy (LIS) eligibility information in CMS s systems for Medicare Part D enrollees may be updated retrospectively. When this occurs, NPS will accept the LTC Pharmacy s attestation of non-collection of co-payments for Medicare Part D LIS enrollees who are members of a plan administered by NPS on behalf of a Part D sponsor. 3. LTC Pharmacies may provide this attestation to NPS so that any retrospective refunds of copayments or co-insurance amounts for beneficiaries that have been provided service by their facility may have refunds issued directly to the facility. Failure of LTC Pharmacy to attest to this non-collection of co-payments assumes that a copayment was collected and may result in NPS reimbursing these cost-sharing amounts directly to the beneficiary at its discretion. 4. If you feel a patient s LICS level has not been updated, LTC pharmacies are strongly encouraged to submit the Best Available Evidence (BAE), per CMS guidelines. BAE should be submitted to NPS and the respective Part D plan Sponsor as quickly as possible to request that the member s LICS status be changed to institutionalized. NPS will provide access to Part D drugs at the correct Low Income Subsidy (LIS) cost-sharing level when presented with evidence of LIS eligibility, even if NPS systems and CMS systems do not yet reflect that eligibility. Pharmacies are encouraged to submit this information to NPS when information is available. Information may be faxed to or sent via to BAEAdjust@pti-nps.com. If you agree to the above conditions and wish to provide the attestation noted below, along with copies of your Pharmacy Policy and or Procedure for how the above conditions are met, please indicate your acceptance below. Pharmacy Information (Please type or print legibly) I hereby attest that the undersigned pharmacy(ies) do not collect cost sharing charges for LIS-eligible beneficiaries, and that any statements of such cost sharing charges submitted by the pharmacy(ies) to NPS at BIN and PCN DNPS are appropriate, owed and payable. The pharmacy agrees to notify NPS within 30 days of changes to the collection of cost sharing charges for LIS-eligible beneficiaries. Pharmacy Name: Street Address: City: State: Zip: NCPDP#: NPI#: Chain Code(s): Contact Name: Phone: Fax: Name of Person Completing Attestation: Title of Person Completing Attestation: Address: Signature: Date: Do you collect cost sharing charges (i.e. copays) for LIS-eligible beneficiaries? Yes No Sometimes (Please explain) Have you Included Copies of your Pharmacy Policies and Procedures Relating to Billing LIS Copays? Yes No* *Attestations will not be processed without this information. Initial Here Indicate your agreement to this by initialing here Fax the completed application to: Questions regarding this document? National Pharmaceutical Services You may contact us by calling the NPS (866) helpdesk at or by at Attention: BAE Adjust BAEADJUST@PTI-NPS.com