The U.S. Department of Health & Human Services Office of Inspector General has ramped up efforts to expose prescription drug vulnerabilities of Medicare Part D. The result has been an influx of Medicare pharmacy audits by sponsors (United, Humana, CVS, Aetna, Express Scripts, etc.) and the OIG to ensure compliance with network regulations and distribution practices.
But what are Medicare pharmacy audits all about? And what should you or your pharmacy business do when a request for audit comes your way? The healthcare defense attorneys for pharmacies and pharmacists at Chapman Law Group have your answers.
The Center for Medicare Services (CMS) employs Recovery Audit Contractors (RACs) and Medicare Drug Integrity Contractors (MEDICs) to conduct prescription drug audits of participating pharmacies. Audits can be conducted by RACs or program sponsors including United, Humana, CVS Caremark, Aetna, and Express Scripts.
Auditors look at a variety of aspects of a pharmacy to ensure compliance, but some key areas are:
For employees with excludable convictions, CMS audit contractors are typically looking for duplicate payments, prescription fraud, individuals excluded from Medicare, excessive controlled substances prescriptions and sales, and substitution of name-brand drugs with generic drugs billed under the name-brand code. In addition, the pharmacy audit will look for discrepancies in the number of claims vs. the number of medications for a particular NDC ordered.
The Recovery Audit Contractor determines the audit scope and obtains documentation. Then the RAC will review prescription drug event records or other data to determine over-payments or fraudulent activity. The audit will proceed to an independent reviewer called a DVC who performs the data analysis and validates the findings. Finally, the RAC sends notification of an improper payment (NIP).
After the audit is completed a provider receives an audit report detailing the findings and any adjustments to payments which have already been made to Medicare. The provider then has 30 days to appeal those findings, usually by submitting supporting documentation showing the payment was proper as originally submitted.
If the auditor discovers instances of Medicare fraud or false claims that have been submitted to Medicare or Medicaid for payment, the pharmacy owner and/or operator could be charged with fraud under the False Claims Act. In addition to potential monetary and criminal penalties, the pharmacy could be excluded from participation in the Medicare and Medicaid programs, resulting in extreme difficulty in maintaining the business.
You must appeal the findings and you should hire an attorney to do so. There are three levels of appeal. A request for reconsideration must be filed no later than 60 calendar days from the date on the Notice of Improper Payment. If that appeal is not successful, you must file a Level II request for CMS hearing official review within 30 days from the date of the first reconsideration decision. If that is not successful, you must file a request for CMS administrator review within 30 calendar days from the hearings official’s decision.
At Chapman Law Group, our healthcare attorneys represent pharmacists, pharmacy owners and technicians, and drug/device manufacturers and distributors in matters concerning Medicare audits. We can assist in all steps of the audit, as well as making a specialty plan to be sure your pharmacy is keeping in regulatory compliance for the future.
Our Medicare pharmacy audit defense law firm is here to serve you out of four national offices:
Contact us to learn more about our pharmacy law services.
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