Pharmacy Network Providers Manual

Version 11.7.2016 10:00 a.m. Pharmacy Network Providers Manual People caring for people

Table of Contents Pharmacy Network Call Center... 6 Prior Authorization Call Center... 6 Claims Processing...7 Protecting Privileged Health Information...7 Eligibility...7 On Line Adjudication System...7 Manual Claims...8 Clinical DUR Edits...8 Prior Authorizations (PA)...8 Steps to an Effective Management of a Prior Authorization...8 Incomplete Prior Authorization Requests...8 Confirmation of a Successful Fax Transmission...9 Dynamic Prior Authorization (DPA)... 10 Step Therapy (ST)... 10 Age Limit (AL)... 10 Medical Specialty Restriction... 11 Quantity Limits (QL)... 11 Coordination of Benefits... 11 Drug Interactions... 11 Compounds... 12 Flex 90 Program... 13 Common Alert Messages... 13 Pharmacy Dispute Process... 15 Maximum Allowable Cost (MAC) Appeal Process... 15 Quality Assurance Programs... 16 Communications to Pharmacy Network Members... 16 Pharmacy Services Center... 17 Credentialing Process... 17 Contracts Terms... 18 Re-Credentialing... 18 Termination of Services... 18

Updates in Pharmacy Information... 19 Pharmacy Reimbursements... 19 Record Keeping... 19 Non-Discrimination Policy... 19 Good Pharmacy Practice... 19 Protected Health Information... 20 Pharmacy Audits... 20 Fraud, Waste and Abuse (FWA)... 21 What is Fraud?... 21 What is Abuse?... 21 What is Waste?... 21 How can Fraud, Waste and Abuse be Identified?... 21 What happens when Fraud, Waste, and Abuse are identified?... 21 How can Fraud be Prevented?... 22 Medicare Part D Compliance Requirements... 23 Coverage Determination... 23 CMS Exclusion Lists... 23 Conflict of Interest... 23 Code of Conduct and Ethics... 23 Medicare Part D MAC Pricing... 23 Vaccine Administration... 24 Electronic Prescriptions... 24 MC-21 on the Internet... 26 Circular Letters and Updates... 26 FWA Training and Attestation Forms... 26 Medicare Part D MAC Pricing... 26 MC-21 Code of Ethics and Conduct... 26 Pharmacy Dispute Form... 26 Pharmacy Guide for MAC Price Review... 26 Pharmacy Information Update... 26 Prior Authorization Request Form... 26 Universal Claim Form (UFC)... 26

Welcome to MC-21 s Pharmacy Network Welcome to MC-21 s Pharmacy Network. Your partnership in delivering pharmaceutical care within our Pharmacy Network is highly valued. MC-21 was established in 1998 to develop and administer unique, tailored, and flexible pharmacy programs for corporations, managed care organizations, unions, government agencies and other entities. We take great pride in collaborating with our clients to achieve their business goals by integrating all pharmacy benefit components: pharmacy networks, formulary management, pharmacy communications, drug utilization review, clinical services, care management, technology, rebates administration, claims processing and administrative support. In 2009, MC-21 became the first Puerto Rican Pharmacy Benefit Manager (PBM) to attain the URAC Pharmacy Benefit Management Accreditation, and since then has consistently complied with URAC standards, thus revalidating its accreditation. URAC is an independent, nonprofit organization, leader in promoting quality health care through its accreditation and certification programs. This accreditation reaffirms MC-21 s commitment with upmost quality and safety standards in health care services. This Pharmacy Providers Manual provides a summary of MC- 21 s policies and procedures and establishes the quality of service standards expected from our pharmacy network members. It is also intended to serve your pharmacy staff as a working tool to guide your staff through the day-to-day transactions, such as claims processing and prior-authorizations management, and provides important information to better understand the processes related. MC-21 will keep you posted with relevant and updated instructions, notices, information, supplements and subsequent revisions of this manual, in order to promote continued standard of care quality. We look forward to working together in providing high quality pharmacy services to our client s members.

Pharmacy Network Call Center Our Pharmacy Network Call Center is staffed with knowledgeable, fully bilingual pharmacists and pharmacy technicians to effectively assist you during your call. MC-21 s Pharmacy Network Call Center is equipped with state-of-the-art telecommunications system with all the necessary features to maintain our customer services operations performing at optimum capacity 7 days a week, 365 days a year. The Pharmacy Network Call Center Support Representatives will assist you with information regarding the patients benefit plan, such as eligibility, co-payments, deductibles or co-insurance, clarify alert messages, confirm a physician s participation in a provider network, among other information required for claims management. Keep these numbers at hand for assistance with your day to day claims management needs. Contact Information Mailing Address Call Box 4908 Caguas, Puerto Rico 00726 Location Highway 1, Km. 33.3, Barrio Bairoa Angora Industrial Park, Lot # 4 Caguas, Puerto Rico 00725 Internet: www.mc-21.com Pharmacy Network Call Center 24 hours / 7 days a week services Toll Free numbers T: 1-888-311-6001 / 1-866-411-6001 F: 787-653-2814 Customer Services Monday Friday 8:00 a.m. 5:00 p.m. Prior Authorization Call Center T: 787-286-6032 ext. 3263 E: asuntosdelcliente@mc-21.com 24 hours / 7 days a week services T: 1-866-999-6221 / 1-866-989-6221 Fax Numbers: Use the appropriate fax number according to the health plan provider of the claim being processed. Triple-S Salud Commercial Plans 1-866-499-4205 BPPR, BMS, MMM & ADAP HIAP 1-866-277-6556 PSG 1-866-894-8197 MAPFRE 1-866-827-8024 6

Claims Processing Protecting Privileged Health Information Participating Pharmacies shall always keep in mind that sending protected health information (PHI) to an incorrect entity constitutes a breach of federal HIPAA laws. MC-21 reiterates that, as a covered entity, the Pharmacy is responsible of: 1. Verifying the fax number being used before transmitting PHI. Fax numbers are constantly changing and using fax numbers obtained on internet or on a telephone book is not recommended. Double-check that the correct fax number has been entered before initiating a fax transmission. Eligibility Before processing a claim, the Participating Pharmacy shall take steps to gather information that will allow to confirm the eligibility of the plan member. The Pharmacy staff shall request the plan member to present a member identification (ID) card of the pharmacy benefit or healthcare plan AND a valid identification. The cardholders identification number and date of birth shall be confirmed before claim processing. The member identification (ID) card presented must be the most current card issued to the p l a n m e m b e r. The plan member s eligibility can be confirmed through the on-line Claims Processing System or by calling the Pharmacy Network Call Center. On Line Adjudication System The Participating Pharmacy is required to electronically submit all claims using the current NDPDP format. MC-21 s electronic billing system is available for claims processing in real time, 24 hours a day, 365 days a year. See table 1 for input codes you will need for the on-line adjudication process. Table 1 Input Codes for Online Adjudication Input Code for Pharmacies MC21 CORPORATION Bin Number ** Processor Control Number ** Group Number Pharmacy ID Number (Qualifier 01) ** Member ID Field ** Date of Birth ** Telecommunication Standard MC21 010868 Varies according to client Varies according to client NPI # See member s card Required Prescriber Information ** NPI # ** Required Fields NCPDP Version D.O It is very important that Participating Pharmacies consult with its software vendor on the proper system configuration. 7

Manual Claims If for any reason the pharmacy is unable to process claims electronically, it should submit all information related to services rendered using a Universal Claim Form (UCF). The completed UCF, as well as the electronic claim, should be submitted to MC-21 no later than 60 days after rendering services to the Plan Member. Please be aware that manual claims require prior authorization by MC-21. You may request authorization for a manual claim by calling the Pharmacy Network Call Center. You may obtain a UCF at www.mc-21.com or by calling our Pharmacy Network Call Center. Clinical DUR Edits Prior Authorizations (PA) Prior-Authorization (PA) is a drug utilization tool employed by direct-based healthcare organizations which requires that certain clinical-based criteria be complied with before a medication is approved. The priorauthorization process guarantees the appropriate delivery of medications, while reducing errors and expenses and encouraging an adequate use of prescribed medications. Some prior-authorization criteria require the patient s diagnosis and recent lab tests. The patient s diagnosis enables to confirm if the medication is being prescribed according to its FDA-approved indication or clinical-treatment guidelines recommendations. must submit all required and relevant-to-thecase documentation. Steps to an Effective Management of a Prior Authorization 1. Check that the prescription meets all legal requirements (e.g. patient information, date, instructions to pharmacist, directions to patient, etc.). 2. Provide all relevant information and documentation, including the patient s name, cardholder member ID, age, weight, etc. In some cases, additional information may be required to perform an evaluation. See table 2 for some examples of additional documentation. 3. Complete the Prior Authorization Request Form. Call our Pharmacy Network Call Center to obtain a PA Request Form or visit www.mc-21.com. 4. Send all documents by fax to the Prior- Authorization Center (refer to page 6 for fax numbers information). 5. MC-21 will notify the pharmacy the determination of the case in writing. Incomplete Prior Authorization Requests If the Pharmacy does not submit all required documentation, MC-21 will send the Pharmacy a written notice indicating the request is incomplete. To ensure effective and timely evaluation of each PA request, the Participating Pharmacy 8

The Pharmacy will then have 24 hours to complete and submit to MC-21 the missing information. If the requested documentation is not received within the 24 hour period, MC-21 will send the Pharmacy a denial notice stating that the case has been closed. Table 2 Examples of Prior Authorization Information PA Required ALERT MESSAGE Step Therapy (e.g.: Use Omeprazole first ) Duplicate Therapy (e.g.: Enalapril y Ramipril) Patient s Diagnosis DOCUMENTATION REQUIRED Evidence of prior use of first-line drugs (e.g.: medication profile, letter from physician, etc.) Justification to support medical use of both drugs Confirmation of a Successful Fax Transmission If a Pharmacy wants to confirm that faxed documents have been successfully transmitted to the Prior-Authorization Center, the following steps should be performed: 1. Obtain a confirmation from your telephone services provider validating that your fax line is free of noise and static. 2. Verify and confirm that your fax line s Automatic Number Identification (ANI) is activated. 3. Review if your fax machine has the option to add the fax number as part of the reference information included in the equipment. 4. Write test-page on a sheet and fax it to the Prior-Authorization Center. 5. Once you receive a successful confirmation, send an e-mail and the fax confirmation to MC-21 (asuntosdelcliente@mc-21.com) to let us know that the transmission was successful. 6. If the test page was not transmitted successfully, send the test fax confirmation to asuntosdelcliente@mc-21.com along with 9

the following information: pharmacy name, NABP/NPI, telephone number to be reached and name of contact staff. Dynamic Prior Authorization (DPA) by the pharmacy. 3. Evidence provided by the patient that proves prior use of first-line medications under another health plan contract number or group. A Dynamic Prior Authorization (DPA) is an automatic override process in which a Participating Pharmacy enters a predetermined unique PA code number. A DPA is used in certain circumstances, such as a vacation request, dosage change, or during adverse weather. At the time of the fill, the Participating Pharmacy will process the claim using the PA code number on the on-line Claims Processing System. DPA s apply only to some plan designs and to some products. These claims, like all other claims, may be subject to an audit process. Step Therapy (ST) The Step Therapy approach requires the use of a first-line medication recommended by treatment clinical guidelines before using a second-line medication. If the desired therapeutic benefit is not achieved with the first-line medication, then the second-line medication may be approved. The use of the first-line medication may be identified automatically by the on-line Claims Processing System. Plus, there are other methods to prove the previous use of first-line medications, such as: 1. A letter from the physician certifying the previous use of first-line medications. 2. A patient s medications profile provided The prescription, a completed Prior Authorization Request Form and available information that evidences the prior use of a first-line medication should be submitted to the Prior Authorization Call Center faxes (refer to page 6 for fax numbers information). Call the Pharmacy Network Call Center if you need further information. Age Limit (AL) The Age Limit edit ensures that the prescribed medication is used in the age group in which its safety and efficacy has been proven. For example, a medication that is limited to a pediatric population or for patients over 18 years of age. This drug utilization tool protects those patients from the non-studied population and guarantees access to patients 10

within the studied age group population, while helping prevent morbidity and mortality associated with their use. Medical Specialty Restriction Some medications require a prescription from a certain medical specialist. In general, these are specialty drugs that need a high level of experience and monitoring by a physician specialized on certain health conditions. Examples: chemotherapies, biological agents. Quantity Limits (QL) The Quantity L imit edit limits the amount that may dispensed on a certain drug. The quantity limit is based on the maximum effective dose approved by the FDA and on evidence from clinical trials. A QL edit prevents problems related to drugs misuse. For example, the use of higher than recommended doses which may pose a potential harm to a patient s health. QL s can also be applied to prevent inappropriate use of medications with unproven long-term benefits. Coordination of Benefits The coordination of benefits, known as COB, allows an insured person to use two health plans with pharmacy benefits a primary plan and a secondary plan for one same prescription. How will I know that the person has two health plans with pharmacy benefits? alerts you that the insured patient has an alternate health plan. How should I process a claim with COB? First, process the claim to the insured s primary plan. The primary plan informs the amount it will pay for the claim. Second, process the claim to the insured s secondary plan (BIN#, PCN and Group) using the same information submitted to the primary plan - prescription number, dispensing date, NDC, quantity to be dispensed, days supply and refills. The allowed values on the Other Coverage Code field are: 2 = Other Coverage Exists: payment collected 3 = Other Coverage Exists: claim no covered 8 = Coordinate Co-Payment (PSG) The Participating Pharmacy should verify the suitable system configuration to allow for processing of COB claims with its software vendor. Call the Pharmacy Network Call Center if you need further assistance. Drug Interactions MC-21 s On-line Adjudication System has the capability of issuing alert messages when interactions are detected. The insured person informs you, or The on-line claims adjudication systems 11

Pharmacy staff should be aware of these messages and should know where to view them in the pharmacy claims system. The alert messages are associated with the following levels of severity: Major interactions that are well documented and have the potential to cause harm, or that occur with a low incidence, but have the potential to cause serious adverse effects. Moderate these interactions are associated to a lower probability of causing damage and are not as well documented. Minor these interactions can occur, but are less significant because the available data is poor and conflicting. Minor interactions are associated to a limited risk or no clear risk to the patient. None there are no known interactions. The Pharmacist must decide how to handle the event, according to the level of severity of the interaction, and should always document the action taken. Major or Moderate Severity the Pharmacist must contact the physician to discuss alternatives such as a change of the prescribed medication, discontinuation of one of the drugs related to the interaction for a short period of time, a dose adjustment of one or both drugs, or a change in the time of the day in which the drugs are administered, among other measures. Minor Severity the Pharmacist may choose to counsel the patient about the potential for interactions and advise him/her to contact their physician if a problem arises. The On-line Adjudication System has been programmed to detect potentially severe drugdrug interactions for certain drug combinations. When this occurs, the claim will be rejected (Rejection Code 88: "Drug-Drug Interaction use DUR/PPS coding ). There is process to override a drug drug interaction rejection. This process will only be used if and when the prescribing physician or the pharmacist, based on their clinical judgment, determine and document that the rejected drug poses no danger to the health of the patient and therefore the prescription can be filled as ordered. The Pharmacist must document on the prescription or in the patient s electronic record the intervention performed to support the drug-drug interaction override. This process is subject to audit. Refer to the Common Alert Messages section in this Manual for more information. Compounds MC-21 administers pharmacy benefits on behalf of many different plan sponsors. Each individual health insurance plan determines benefit plan design, such as the specific drugs/ingredients covered, cost-sharing and day supply limitations, among other benefit features. Participating Pharmacies are expected to observe applicable state and federal laws, CMS policies, professional standards and FDA communications when preparing and dispensing compound drugs. For instance, 12

CMS clearly states that for any non-part D ingredient of the Part D compound, the Part D sponsor s contract with the pharmacy must prohibit balance billing the beneficiary for the cost of any such ingredient. The clarification code (option 8 in the on-line claims adjudication system) allows the pharmacy to process a claim for a compound when at least one of the compounds ingredients is a covered drug (refer to Circular Letter MC16-015 for processing details). Call the Pharmacy Network Call Center if you need further assistance. Flex 90 Program This program allows the health plan member to receive a 90-days supply of maintenance drugs. The plan member s participation in this program can be optional or required, as defined by the plan benefit design. Prescriptions for the Flex-90 program are acceptable in any of the following forms: 30 days supply and X the number of repetitions X equals the number of repetitions needed to complete a 90 day supply; the maximum allowed is the original prescription plus five repetitions. 90 days supply and X repetitions - maximum allowed is one repetition. Common Alert Messages The following are some of the most frequent alert messages on the on-line claims adjudication system. Code 76 Plan Limitations Exceeded Alert means that the cost of the submitted claim is greater than a certain dollar amount established by the health plan (e.g. $500, $1,000). What to do? Verify possible data entry error for drug quantity and cost. Modify information, if necessary. If information submitted is correct, complete a Prior Authorization Request Form and submit it along with the prescription to the Prior Authorization Center (refer to page 6 for fax numbers information). You may call the Pharmacy Network Call Center for further assistance. Code 76 Maximum Days Supply of 15 This alert means that the days supply or the quantity of medication in the submitted claim are greater than those covered by the insured s health plan. The maximum days supply varies according to the plan design. For example, some plans have different maximum days supply for maintenance and acute medications. What to do? If you need assistance, call the Pharmacy Network Call Center. 13

Code 70 NDC Not Covered, Generic Substitute Required for Payment This alert means that the coverage may be Generic Mandatory. You might be processing an original (brand) medication. The rejection code indicates that it must be substituted with a generic version in order to obtain payment ( Generic Subst. Required for Payment ). What to do? Private/commercial sector plan - verify the patient s coverage; it may indicate Generic Mandatory. Government related program - verify if the medication is included in formulary and if it has been prescribed by an authorized physician. If so, the alert means that the medication prescribed has a generic substitute and that the original (brand) product is not covered by the plan. Call the Pharmacy Network Call Center if you need further assistance. Code 70 Plan Exclusion Alert means that the medication being claimed may be excluded or limited to a medical specialty. What to do? Private/commercial sector plan - verify the patient s coverage; the medication may be excluded or limited by medical specialty. Government related program - verify if the medication is included in formulary and if it has been prescribed by an authorized physician. Code 88 DUR Error A Code 88 message stands for a refill-toosoon. What to do? Verify if there may be a data entry error and correct, if necessary. Some insurance companies allow pharmacy staff to enter an override code due to an upcoming trip/vacation. In such cases, Pharmacy must submit the prescription, along with evidence of the upcoming trip to the Prior Authorization Center (refer to page 6 of this Manual for fax numbers). Code 88 High Dose Alert This code alerts on doses that exceed the daily maximum recommended dose. What to do? Pharmacists must exercise their clinical judgment and /or contact the prescriber to document that the prescribed dose does not pose a risk to the patient and that dispensing is appropriate. The Pharmacist must always document the intervention that supports the override on the prescription or in the patient s electronic record. This process is subject to review during a pharmacy audit process. Refer to Circular Letter MC14-060 for details on override codes to process this claim. Code 88 Drug-Drug Interactions This rejection code means that a potentially severe drug-drug interaction has been detected, and the claim has been rejected. 14

What to do? There is a process to override the drugdrug interaction rejection. This process will only be used if and when the Pharmacist or Prescriber conclude that dispensing the drug does not pose a risk to the patient. Pharmacists must exercise their clinical judgment and /or contact the prescriber to document that the prescribed drug poses no danger to the patients health and the prescription can be filled as ordered. The Pharmacist must always document the intervention on the prescription or in the patient s electronic record. Refer to Circular Letter TS14-063 for details on override codes. Code 77 Discontinued NDC Number This code alerts about drugs with an inactive NDC number. MC-21 s on-line claim adjudication system does not accept claims for drugs with inactive NDC numbers. A rejection for this medication does not mean that the medication is not covered by the plan, but that it must be processed with an active NDC number. What to do? Call your supplier for information on available alternatives for inactive NDC numbers. Call the Pharmacy Network Call Center if you need further assistance. Pharmacy Dispute Process Participating Pharmacies can report discrepancies or concerns regarding an un-paid prescription or adjudication situations regarding a particular claim (e.g. pharmacy tries to reprocess a rejected claim out-side of the allowed time and receives a claim-to-old message) by filling out a Pharmacy Dispute Form. Completed forms and required support documentation should be submitted to the Pharmacy Services Center by email (asuntosdelcliente@mc-21.com or fax (787-653- 2814). MC-21 will evaluate and respond to all Pharmacy Dispute evaluation requests. Call our Pharmacy Network Call Center to request a Pharmacy Dispute Form or visit www.mc-21.com. Maximum Allowable Cost (MAC) Appeal Process MC-21 s MAC Price Review Application provides Participating Pharmacies an effective and agile mechanism to request an evaluation of a reimbursement payment on a generic drug. The application also allows pharmacies to revise the status of a submitted price review claim. To initiate a request, the Pharmacy must access the MAC Price Review Tool at https://apps.mc-21.com/macpr and complete a claim evaluation request. A step-by-step guide on how to use the MAC Price Review application is available by calling the Pharmacy Network Call Center or visiting www.mc-21.com. 15

Quality Assurance Programs MC-21 highly values and encourages medication safety practices and requires participating pharmacies to develop and maintain Quality Assurance (QA) Programs to ensure that services are appropriate, effective and efficient, and result in an improved quality of care of our client s members. MC-21 expects Participating Pharmacy Providers to establish policies to: 1. Confirm the authenticity of the prescription order. 2. Reasonably verify the identities of the patient, the prescriber and the caregiver, when applicable. 3. Ensure environmental standards that preserve the integrity of the medications while they are stored and shipped. 4. Ensure proper accounting of controlled substances. evaluated by the MC-21 Quality Assurance Committee for corrective action plans and / or other decisions, as deemed necessary. Communications to Pharmacy Network Members MC-21 will keep Pharmacy Network members posted with relevant and updated instructions, notices, information, supplements or subsequent revisions to this Manual in order to promote continued standard of care quality. Communications will be sent to the Pharmacy s on-file email address and/or fax - one more reason to keep your records at MC-21 up-todate and will be available at www.mc-21.com. QA programs should provide a structured, systematic process to continuously improve quality of services. It should establish procedures to uncover potential risks while promoting ways to reduce susceptibility to errors, and should include internal medication error identification and reduction methods to ensure proper dispensing of medications - correct drug, dosage, quantity, and treatment directions to the correct eligible member. Pharmacists are responsible for applying their professional judgment regarding the appropriate drug use. MC-21 keeps a registry of pharmacies that have been identified as a potential safety risk for members. These pharmacies will be 16

Pharmacy Services Center MC-21 s Pharmacy Services Center provides its Pharmacy Network members with administrative support to ensure compliance with applicable policies, regulations and laws and contractual agreements. This is a continuous, collaborating process that will promote sound business practices and ensure the upmost quality service standards for our clients members. The Pharmacy Services Center Support Staff will assist you with any questions regarding Pharmacy Network contracts, requisites for becoming a Pharmacy Network member (Credentialing), and Recredentialing process, among other Pharmacy Network issues. Contact Information Telephone: 787-286-6032, extensions 3147 and 3111 Monday Friday 8:00 a.m. 5:00 p.m. Fax: 787-653-2856 E-mail: PharmacyContracting@mc-21.com Mail: MC-21 Corporation, Pharmacy Services Department P.O. Box 4908, Caguas, Puerto Rico 00726 Internet: www.mc-21.com Credentialing Process All new petitioning pharmacies will be evaluated to confirm compliance with MC-21 s contracting requirements such as facilities adequacy, inventory and necessary operational structure to provide quality service. In addition, pharmacies must submit all regulatory licenses and permits in accordance with state and federal law regulations, such as: Department of Health Pharmacy License Controlled Substances Licensing (ASSMCA, DEA) Biological Products License 17

Pharmacists must meet the following requirements: License from the Pharmacy Board of Puerto Rico Certification of Continuing Education Registration Call the Pharmacy Services Center for more details on the credentialing process. Contracts Terms The Service Agreement between MC-21 and a Participant Pharmacy is valid for a two (2) years period, after which it will continue to renew automatically for two (2) years terms as long as the Participant Pharmacy complies with all credentialing requirements established by laws and regulations of the Commonwealth of Puerto Rico. Re-Credentialing Through the re-credentialing process, MC-21 corroborates that the Participating Pharmacy continues to comply with all requirements stated in the MC-21 Services Agreement Contract. As a member of the MC-21 s Pharmacy Network, providers have the responsibility to keep track of the validity of its pharmacy s licenses, permits and certifications. Copies of current documentation must be sent to MC- 21 s Pharmacy Services Center to maintain an updated record. If renewal of any of the required documentation in underway, the provider will submit valid evidence of the renewal process. The final and official document will be sent to MC-21 once the renewal process is complete. Documentation can be submitted by fax (787-653-2856), by e-mail (PharmacyContracting@mc-21.com) or by mail (MC-21, Pharmacy Services Center, P.O. Box 4908, Caguas, Puerto Rico 00726). Pharmacies that do not meet the required criteria will be granted a reasonable period of time to submit an action plan to correct findings identified during the re-credentialing process. Termination of Services If a pharmacy decides to cancel the Service Agreement due to closure of operations or any other reason, a written notice must be submitted to MC-21 with at least 60 calendar days in advance. The Pharmacy Network Service Agreement establishes the process to do so. MC-21 may immediately dismiss a Participating Pharmacy from its networks if: the pharmacy s licenses to dispense medications is suspended or revoked, the pharmacy s name appears in CMS exclusion lists, the pharmacy does not meet the criteria established in the Pharmacy Network Service Agreement the pharmacy commits fraud, abuse or waste, or the pharmacy enters into any other illegal conduct or event that could threaten the 18

safety of the insured members. If the pharmacy does not agree with the termination of services determination, it can appeal the decision within (10) days of the deactivation notice. To do so, the pharmacy must submit a written notice explaining the reasons why the deactivation should not take place, and documentation that significantly supports the request. The pharmacy will receive MC-21 s final determination within five (5) to seven (7) business days. If additional time is needed, the pharmacy will be informed of the expected time in which a final determination is expected. The development and implementation of a corrective action plan could be required to consider the reactivation of the pharmacy. Updates in Pharmacy Information Participating Pharmacies should notify the NCPDP Agency about changes on demographic information. MC-21 s claim adjudication system receives NCPDP data files containing information on new pharmacies and updates for existing pharmacies. Since this information is used for payments and important notifications, pharmacies need to make sure their NCPDD information is always up to date. Changes in pharmacy s contact information (address, telephone, fax, e-mails, etc.) should be notified to MC-21 s Pharmacy Services Center in writing. You can request a Pharmacy Information Update Form by calling 787-286- 6032, extensions 3147 and 3111, or by visiting www.mc-21.com. Pharmacy Reimbursements Reimbursement payments for commercial and government segments are processed bi-weekly. For the Medicare segment, payments are processed weekly. Payment checks include a detailed report on processed claims during the payment cycle. At the beginning of each year MC-21 will send Pharmacy Network members a notice with payment dates for each cycle. Record Keeping Pharmacy Network members shall maintain record of services rendered to Eligible Members. The Pharmacy will retain original prescriptions and the Signature Registry of Eligible Members for a seven (7) year period after the dispensing date of the medication, or as required by applicable laws. For Medicare Part D claims, a 10-years document retention is mandated by CMS (Centers for Medicare and Medicaid). Refer to the MC-21 Pharmacy Services Agreement for state and federal laws requirements on specific record retention. Non-Discrimination Policy Pharmacy Network members will not discriminate against any insured member by reason of race, color, ethnicity, gender, marital status, sexual orientation, age or physical or mental disability. Good Pharmacy Practice Participating Pharmacies are responsible of ensuring that its pharmacists comply with all 19

professional credentials and with good pharmacy practices. MC-21 shall not be liable for claims arising from violations of such practices. Protected Health Information Pharmacy Network members shall keep all insured members medical records in strict confidentiality and will disclose such records only: ensure compliance with contractual terms between MC-21 and participating pharmacies, identify, avoid and prevent fraud, waste and abuse, ensure the validity and accuracy of the claims processed and invoiced to our customers and CMS, and educate participating pharmacies on the submission of electronic claims and proper documentation. As established in the Service Agreement contract If subject to applicable laws and regulations, particularly those contained in the HIPAA Privacy Act, or to orders of any legal court To another provider who will provide healthcare services to the insured member If the insured member consents in writing Pharmacy Audits The Audit Program main s objectives are: ensure compliance with applicable laws and regulations, The Pharmacy Audit Program includes both concurrent and retrospective audits, and can be performed either through on-site or desktop interventions. The Program also provides for Special Audits which respond to irregularities, complaints or disputes referred by insured patients or from another audit process. Any pharmacy that shows suspicious conduct will be reported and irregularities may be subject to penalties, as entitled by the Pharmacy Network Service Agreement and Pharmacy Law. Participating Pharmacies shall keep up-to-date records on information related to submitted claims. In order to perform a complete audit process MC-21 and/or their duly authorized agents will have access to the Participating Pharmacy s records, books, registries, files, manuals and electronic prescriptions related to Eligible Members subject to all applicable state and federal laws and regulations governing the confidentiality of such records. Visit www.mc-21.com for access to our Pharmacy Audit Guidelines. 20

Fraud, Waste and Abuse (FWA) MC-21 is committed to avoid, reduce and control the incidence of fraud, waste and abuse pursuant to federal and local laws. According to current regulations, first tier, downstream and related entities, including pharmacies, must complete appropriate FWA training that complies with CMS and MC-21 s requirements. FWA training must be offered on an annual basis. In an effort to prevent fraud, waste and abuse, MC-21 has developed the following guides for our Participating Pharmacies that provide services to beneficiaries from Medicare Part D. Our goal is to ensure that all pharmacy services providers for MPD programs comply with all the medication processing and dispensing specifications, as established and according to CMS. What is Fraud? Fraud is defined as the intentional representation of an individual, who knows it to be false, or does not believe it as true, and executes it knowing that such representation may result on an unauthorized benefit for him/her or any other person. What is Abuse? Abuse involves actions that are inconsistent with acceptable fiscal practices for medicine or businesses. According to federal norms, the abuse of Medicare is a minor fraud offense. It refers to incidents or practices that, directly or indirectly, cause loss to the Medicare Program, to its beneficiaries or families, and imply inconsistent practices with the accepted correct habits in the practice of medicine or businesses. What is Waste? Waste occurs when a pharmacy or, in most cases, a beneficiary over utilizes services. How can Fraud, Waste and Abuse be Identified? All Participating Pharmacies are subject to audits by any agency, as established by CMS. This audit verifies if each prescription dispensed by the pharmacy complies with all the established requirements contained on the new Pharmacy Law (Law 247), MC-21 s Services Agreement requirements, and those of appropriate regulatory agencies. Pharmacies that show deficiencies will be retrained and will be requested to submit an action plan to correct such deficiencies. As required by CMS, MC-21 will establish a follow-up plan with the pharmacy to determine if the corrective actions implemented are resulting as expected. If similar findings arise in a subsequent intervention, they will be considered and treated as an abuse, and will be referred to MC-21 s Compliance Officer, who will evaluate and determine further actions. What happens when Fraud, Waste, and Abuse are identified? When a pharmacy incurs in fraud, waste, and abuse, MC-21 will notify its Compliance Officer, the Health Insurance Company and/or Plan Sponsor. They will hold the resultant actions, according to CMS established requirements. The PBM and the Plan Sponsor have the obligation to notify frauds to MEDICS, a company contracted by CMS for fraud 21

management, who will determine course of action. Remember, fraud is a crime punished by law. How can Fraud be Prevented? All Participating Pharmacies are responsible for documenting and guaranteeing that processed claims comply with dispensing medications requirements established by CMS and applicable regulatory agencies. They are also responsible for implementing and complying with necessary controls to prevent situations that might be considered abusive or fraudulent. In an additional effort to contest fraud, MC- 21 s Pharmacy Providers can notify cases in which they suspect fraud by calling 787-286- 6032, extension 3800. Minimum Information Required to Report a Suspicious Fraud Case: Name of the Pharmacy/Person Phone number of the person calling A brief explanation of the situation to be reported Reporting providers must have the necessary information to report a case. Calls with incomplete information will not be considered for investigation. Each case reported will be treated with the strictest confidentiality. People who contact our line to report possible fraud, waste, and/or abuse are not required to reveal their identity. However, depending on the reported situation and the turns the investigation may take, it might be necessary to identify the person who reported the possible fraud, waste, and/or abuse. Reports with limited information and lack of specific necessary details to complete the investigation will be archived until such information may be reported or provided. Each case reported will be treated individually and in strict confidentiality and compliance with all privacy parameters established by CMS. The identity of the person providing the information will not be revealed without his/her consent, unless MEDICS or any other regulatory agency determines that it is absolutely necessary during the course of the investigation. Participating Pharmacy Providers are responsible of training their staff on Fraud, Waste and Abuse Prevention. Trainings are to be offered to all staff, including managers and directors, on the date of employment, and then on an annual basis. The Pharmacy Provider is required to keep copy of the materials provided in such training and evidence that the training was offered. Such information will be provided to MC-21 if or when requested. MC-21 provides a complete web-based training course that pharmacies can use for training purposes. This course as well as the FWA Training and Attestation Forms are available at www.mc-21.com. Complaints Pharmacy member complaints or grievances are a means of continually improving the quality of our services. If you have a complaint of services please visit 22

www.mc-21.com and complete the Complaints form. Complaints will be handled in a timely manner. Medicare Part D Compliance Requirements Coverage Determination As established by CMS (CMS-4144-F, April 15, 2011), Participating Pharmacies are required to notify beneficiaries, in writing, regarding their right to contact their Medicare plan to obtain a coverage determination. This notice has to be hand delivered and in a standard notification format approved by CMS. The advice must be performed every time the pharmacy receives an electronic message indicating that the claim is not covered. CMS Exclusion Lists Participating Pharmacies are required to have in place policies and procedures for the reviewing of the exclusions of all CMS Exclusions Lists such as Office of Inspector General (OIG / http://www.oig.hhs.gov/), Excluded Parties List System (EPLS /http://www. epls.gov), and General Administration Services (GSA). Pharmacies must check these lists for each new hire within the first 90 days of the hire date and then monthly, to ensure that its employees are not included in such lists, and therefore, unable to work with federal programs. The Pharmacy must keep records to evidence that the monthly revisions were duly performed. Such records must be available to MC-21 when requested. If an employee is indeed listed in either exclusions lists, he/she shall be removed immediately from any direct or indirect activity related to Medicare, and the pharmacy must take the necessary corrective actions. Conflict of Interest The Participating Pharmacy must assure that employees responsible for the administration or dispensing of medications under Medicare Part D, do not have any conflict of interest whatsoever for administering or dispensing medications for Medicare Part D. Code of Conduct and Ethics Pharmacy Providers must comply with all applicable Medicare laws and regulations, and CMS instructions which include having compliance policies and procedures in place, and a standard of conduct and ethics that is disseminated upon the pharmacy staff. MC-21 too has developed a Code of Conducts and Ethics in compliance with these statutes. This document is available at our website www.mc-21.com. Medicare Part D MAC Pricing In compliance with federal regulations that establish disclosure and review standards for prices of prescribed drugs included in the Medicare MAC list, MC-21 has developed an on-line application that will provide Participating Pharmacies access to updated pricing information on MPD covered drugs. 23

Participating Pharmacies shall visit www.mc- 21.com to register and review changes to the Medicare MAC listing. Refer to circular letter MD15-030 for more details. Vaccine Administration Since January 1st, 2008, the Medicare Part D program covers the cost of administration of certain vaccines. As a result, the beneficiary has a variety of options to receive services associated with the purchase and administration of vaccines. Option 1: Pharmacy dispatches and administers the vaccine The beneficiary buys the vaccine at a pharmacy and vaccine is administered at this same pharmacy. To do so, the pharmacy must have duly authorized healthcare professionals to administer such vaccines. The pharmacy will electronically process, in a single transaction, the costs associated with the vaccine and its administration. Contact MC-21 s Pharmacy Services Center for details on processing requirements. 787-286-6032, ext. 3147 or 3111. required credentials of healthcare professionals who will administer vaccines at the pharmacy facilities and a duly completed and signed Compensation Attachment Form (MC-21 Compensation Attachment / Medicare Part D Vaccine Administration). For more information on how to become a Vaccine Administration Pharmacy Provider, contact MC-21 s Pharmacy Services Center at 787-286-6032, ext. 3147 or 3111. Option 2: Pharmacy only dispatches the vaccine The Pharmacy does not have authorized healthcare professionals to administer vaccines or the beneficiary prefers to buy the vaccine at the Pharmacy and have the vaccine administered by a healthcare professional at another facility. In this case, the pharmacy will process only the cost of the vaccine. The beneficiary will pay administration costs to the healthcare provider and afterwards submit a reimbursement request to the health insurance plan. Electronic Prescriptions The Pharmacy Law of Puerto Rico (Act No. 247 of September 3, 2004), was amended with Act No. 138 on November 16, 2009 to allow the release of electronic prescriptions without a handwritten signed prescription. Pharmacies interested in participating in the Vaccine Administration Network need to submit evidence of compliance with all Electronic prescribing is defined as electronic generation and transmittal of a prescription from the prescriber to a pharmacy freely selected by the patient, through a system 24

that authenticates the electronic signature of the prescriber and safeguards the security of the transmission in accordance with the applicable standards, laws and regulations. For purposes of this Act, a prescription that is generated and transmitted electronically is also known as electronic prescription, and constitutes an original order and therefore, an order with handwritten signature will not be required. This Act came in effect 30 days after the adoption of Regulation No. 142 of August 9, 2010, which incorporated the new provisions to the Pharmacy Regulation. Participating Pharmacies must comply with electronic prescribing standards, security and transmission of electronic prescriptions as defined by CMS, when receiving or transmitting electronic prescriptions or prescription-related information. 25

MC-21 on the Internet www.mc-21.com Visit our webpage for valuable materials and information. Circular Letters and Updates FWA General Compliance Training Course FWA Training Attestation Forms Medicare Part D MAC Pricing MC-21 Code of Ethics and Conduct Pharmacy Dispute Form Pharmacy Guide for MAC Price Review Pharmacy Information Update Prior Authorization Request Form Universal Claim Form (UFC) 26

MC-21 Corporation Highway 1, Km. 33.3, Barrio Bairoa Angora Industrial Park, Lot # 4 Caguas, Puerto Rico 00725 787-286-6032 www.mc-21.com All rights reserved. This Pharmacy Provider Manual and other documents provided to Participating Pharmacies owned by MC-21, are confidential and remain the property of MC-21. The information contained in those documents cannot be released to third parties without the written consent of MC-21. Revised December 2017