Safeguarding Your Pharmacies Against Fines and Audits
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- Osborne Glenn
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1 Safeguarding Your Pharmacies Against Fines and Audits
2 BACKGROUND Pharmacies across the U.S. are facing intense pressure to maintain accurate prescriber data for prescription adjudication, including Part D drug plan prescriptions. With billions of dollars paid in prescription reimbursements every year, the Centers for Medicare and Medicaid Services (CMS) has bolstered its oversight activities in order to maintain program integrity and minimize fraud, waste and abuse. The legislative mandate to validate prescriber data at the point of sale presents tremendous challenges to pharmacies, however. To remain in compliance, pharmacies, regardless of size, must bring their prescriber validation systems up to real-time speed or risk the possibility of expensive fines, timeconsuming audits and rejected reimbursements. Invalid prescriber identifiers have been problematic since at least A 2010 study by the Office of the Inspector General (OIG) found that out of 18.2 million prescription drug events (PDE), more than 34 percent were invalid in 2007, costing the healthcare system $1.2 billion. In the last quarter alone, HDS confirms that one national pharmacy chain client received 475,218 validation warnings on prescriptions, saving them millions of dollars (see chart on page 7 for examples of some of those warnings). In the last quarter alone, one national pharmacy chain client received 475,218 validation warnings on prescriptions, saving them millions of dollars. From a phar macy perspective, problems with point-of-sale validation can be traced to multiple barriers. Verifying prescriber data through an external source is time-consuming and labor-intensive for pharmacy personnel, who are charged with filling hundreds of prescriptions per day, quickly and without errors. Having pharmacy staff rely on multiple sources, including but not limited to NPI, DEA, OIG and state-specific databases, presents concerns with missing, incomplete, un-useable, incorrect, mismatched, etc. data, which makes these prescriber compliance tactics nearly impossible for pharmacies to rely on for prescriber validation. Barriers to quality monitoring, program integrity and oversight also exist on t he side of CMS. The same OIG study found that CMS lacked the appropriate procedures to ensure the validity of prescriber identifiers. This finding has inspired the implementation of periodic reviews and evaluations within CMS to identify ongoing issues and invalid Part D drug claims. As CMS continues to refine its oversight procedures, more pharmacies are likely to feel the impact. Services such as HDS Prescriber Validation Subscription Service (PVSS) offer pharmacies a more efficient, more streamlined and more accurate way to stay in compliance and reduce the risk of fines and audits. 2 For more information, HDSinfo@HDSdata.com.
3 The Cost of INVALID NPI NUMBERS The National Provider Identifier (NPI) system was established in 2005 as a response to HIPAA s mandate to adopt a standard, unique health identifier for each healthcare provider. As that standard, the NPI system aims to improve and simplify programs, such as Medicare and Medicaid programs, and to improve the effectiveness and efficiency of the healthcare industry by enabling the electronic transmission of health information. NPI numbers follow a specific format: 10-digit numbers beginning with 1, 2, 3 or 4. Prescriber data that does not follow this format is considered invalid. Pharmacies may use the NPI Registry to validate NPI prescriber data, but doing so is time-consuming and labor-intensive. Using the NPI Registry requires pharmacy personnel to exit internal systems, adding extra steps and extra time to processing. Additionally, the Registry does not reflect address changes, name changes and changes in status as frequently as they occur. With some pharmacies filling up to 500 prescriptions per day, relying on the NPI Registry can lead to costly mistakes including chargebacks (audits), rejected reimbursements and the withdrawal of payments following CMS review. According to the OIG 2010 study, there were 309,485 prescription drug claims containing invalid NPI numbers, costing the healthcare system $23,428,844. Invalid NPI Numbers Invalid NPI numbers can result in chargebacks, rejected reimbursements and payment withdrawals. 36% Source: The OIG 2010 Study Incorrect Format Inappropriate Characters 64% of 2007 Medicare Part D Prescription Claims For more information, HDSinfo@HDSdata.com. 3
4 The Cost of INVALID DEA NUMBERS THE CONTROLLED SUBSTANCES ACT requires every covering practitioner who writes prescriptions for controlled substances and every pharmacy that dispenses them to register with the U.S. Drug Enforcement Administration (DEA). Each approved covering practitioner is assigned a DEA number, which is used to monitor and track controlled substances, and used by pharmacies to validate prescriptive authority. As prescribers and pharmacies continue to implement Electronic Prescriptions for Controlled Substance (EPCS), DEA validation demand for prescribers from pharmacies will continue to increase. To be considered valid, DEA numbers on prescriptions must conform to the following format: 9 characters beginning with two letters A, B, F or M and followed by 7 numbers. As of 2005, prescribing physicians must include their DATA 2000 waiver ID number (also known as X DEA) in addition to the DEA number on prescriptions for opioid addiction treatment medications. Although pharmacies may use the SAMHSA Buprenorphine Physician Locator to validate waivers, only prescribers who have agreed to be listed are included in the Locator. The twin burden of validating DEA numbers and D ATA 2000 waivers increases the risk of mistakes which carry hefty fines. In 2007, invalid DEA numbers accounted for the vast majority of prohibited drug claims. In 2007, 98 percent of PDE records were marked with invalid DEA numbers, costing the healthcare system $1,223,363,037. Invalid DEA Numbers Prescription claims with invalid DEA numbers are assessed a fine of $25,000 per prescription. 28% 17% 55% Did not conform to format Shorter or longer numbers Inappropriate characters Source: The OIG 2010 Study of 2007 Medicare Part D Prescription Claims 4 For more information, HDSinfo@HDSdata.com.
5 The Cost of OIG EXCLUSIONS The Office of Inspector General s List of Excluded Individuals/Entities (LEIE) provides information to the healthcare industry, patients and t he public regarding individuals and entities currently excluded from participation in Medicare, Medicaid and all other Federal healthcare programs. Pharmacies that fill a prescription issued by a healthcare practitioner who is on the OIG exclusions list will be assessed a $10,000 fine per prescription. Pharmacies that fill a prescription issued by a healthcare practitioner who is on the OIG exclusions list will be assessed a $10,000 fine per prescription. There are two types of OIG exclusions: mandatory and permissive. Healthcare practitioners who have been convicted of felonious programrelated crimes, patient abuse or neglect, healthcare fraud, crimes related to controlled substances, or a combination of two or three mandatory exclusions may be placed on the OIG exclusions list for 5-10 years. Practitioners who are convicted of misdemeanors, crimes relating to nonhealthcare programs, obstruction of an investigation, license revocation or suspension, and other lesser offenses may be placed on the OIG exclusions list for 1-3 years. The OIG provides an online database for pharmacies and other healthcare providers to verify prescriber data, adding a third data source for pharmacy personnel to use while processing prescriptions. For more information, HDSinfo@HDSdata.com. 5
6 One Platform, One Screen, No Mistakes. The dynamic quality of prescriber data from new practitioners entering the medical profession and others moving or changing their names makes reliance on external databases financially risky and operationally inefficient. Pharmacies without proper controls could face fines in the tens of millions, as evidenced by two major pharmacy chains that were assessed record-breaking, multimillion-dollar fines earlier this year. Bad press exposure can also lead to plummeting stock prices, which may have a deep and long-lasting impact on shareholder support and bottom-line goals. Prescription claims with invalid prescriber data could also cause pharmacies to be red flagged for regular audits, resulting in the withdrawal of reimbursements. As CMS bolsters its oversight mechanisms, there is a tremendous need for pharmacies to augment their systems with tools that streamline workflow and ensure compliance. HDS Prescription Validation Subscription Service (PVSS) allows pharmacies to send inquiries to HDS to determine if prescriptions may be filled based on the most current physician credentials, practicing status, and OIG exclusions or other sanction activity. SEAMLESS INTEGRATION With PVSS, there is no need to access external databases. PVSS works through a PDX interface that integrates seamlessly with standard pharmacy platforms, allowing for processing and validating in just one screen. It can be configured to work with non-pdx systems as well. REAL-TIME VALIDATION PVSS processes requests and returns a series of response messages indicating the results in a matter of seconds. CUSTOMIZED MESSAGES Pharmacies have the option to select default response messages or customize messages to improve clarity for pharmacy staff. DETAILED REPORTING Reports show message results within a specified date range. These reports allow pharmacies to track validation history, analyze trends and identify problem areas. 6 For more information, HDSinfo@HDSdata.com.
7 In the last quarter, 475,218 prescriptions across one pharmacy chain were flagged by PVSS for various warnings. The chart below includes just a few of those warnings that saved these pharmacies millions of dollars because they had access to accurate, real-time data through PVSS, and exemplifies the massive risk that inaccurate data poses to your pharmacies. Response Message DEA Invalid # Flagged HDS indicates the DEA number belongs to a Pharmacist. Verify. 267 HDS indicates the DEA number belongs to a Pharmacy. Verify. 564 HDS indicates the DEA number may represent an Organization. Verify. 18,988 HDS indicates the prescriber DEA is expired. Verify prescriber. 2,291 HDS indicates the prescriber DEA is inactive. Verify prescriber. 8,140 HDS indicates the prescriber DEA is not found. Verify prescriber. 14,213 HDS indicates the prescriber DEA is retired. Verify prescriber. 4,014 POTENTIAL TOTAL SAVED ($25,000 per claim) = $1,211,925,000 Response Message OIG Exclusions # Flagged HDS indicates prescriber is on OIG exclusions list. Verify prescriber. 13,298 POTENTIAL TOTAL SAVED ($10,000 per claim) = $132,980,000 Response Message No Longer Practicing # Flagged Prescriber no longer practicing. {0} allows fills at pharmacist discretion. 6,649 Prescriber no longer practicing. {0} does not allow fills. Verify. 6,258 Prescriber no longer practicing. HDS unable to clarify state regulations. Verify. 13,740 Prescriber no longer practicing. Verify {0} rules for Rx fill and timeframes. 631 POTENTIAL TOTAL SAVED ($100 - $50,000 per claim) = $2,727,800 1,363,900,000 To find out how HDS Prescription Validation Subscription Service (PVSS) can help you streamline validation processes, reduce the risk of costly fines and remain in compliance with prescriber regulations, call us today at or visit For more information, HDSinfo@HDSdata.com. 7
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