Humana Pharmacy Solutions Audit Guide

Humana Pharmacy Solutions Guide Introduction 1.0 Overview 2.0 Types/Description of Process 2.1 Telephone 2.2 Desktop 2.3 Onsite 3.0 Appeals 4.0 Adjustments 5.0 Documentation Requirements 5.1 For an E-Script 5.2 E-Script Controlled Substances 5.3 Retail 5.4 Long-term-care (LTC) Providers 5.5 Signature Log-Elements 5.6 Retail Pharmacy Providers 5.7 Long-term-care Providers 6.0 General Pharmacy Guidelines 6.1 Quantity/Days Supply 6.2 Insulin 6.3 Dispense As Written (DAW) 6.4 Ophthalmic/Otic Solutions 6.5 Ophthalmic/Otic Suspensions 6.6 Inhalers 6.7 Kits 6.8 Injections 6.9 As Directed / PRN 6.10 Compounds 6.11 Reversals 6.12 Origin Code 6.13 Prescriber ID 6.14 Changes to Prescription 6.15 Package Sizes 6.16 Evaluation and Mitigation Strategy (REMS) Programs 6.17 Network Selection 7.0 List 8.0 Appendix: 8.1 Pharmacy Appeal Form 8.2 Humana LTC Pharmacy Documentation Guidelines 8.3 FAQ Document

Introduction Humana Pharmacy Solutions (Humana) values the services offered to Humana members by our network of pharmacy providers. This Humana Guide is provided to explain Humana s Pharmacy Program. It is our goal for Humana network pharmacies to understand the pharmacy audit process. In addition, our network pharmacies are prepared to respond appropriately and to cooperate with a Humana-initiated audit of pharmacy claims. Humana maintains a pharmacy audit program i.) to help ensure validity and accuracy of pharmacy claims for our clients (including the Centers for Medicare & Medicaid Services (CMS)), ii.) to help ensure compliance with the Provider Agreement between Humana and our network pharmacies, and iii.) to provide education to our network pharmacies regarding proper submission and documentation of pharmacy claims. According to the Pharmacy Provider Agreement between Humana and our network pharmacies, Humana, any third-party auditor designated by Humana, or any government agency allowed by law, are permitted to conduct audits of any and all books, records and prescription files related to services rendered to members. 1. Overview Humana (or its designee) conducts telephone, desktop and onsite audits. The results of these audits are communicated verbally (in the case of a successfully resolved telephone audit), via mail or via electronic mail (e-mail). Pharmacies have an opportunity, when applicable, to submit additional documentation or post audit documentation to Humana for additional review. A pharmacy that disagrees with the audit findings may dispute Humana s determination through the submission of the Pharmacy Appeal Form, which will be reviewed by the Pharmacy Appeal Committee. Once appeals have been heard and a determination has been reached by the Pharmacy Appeal Committee, discrepant claims will be addressed through the adjustment process. The Humana pharmacy claim adjustment process addresses discrepant claims through one of the following methods: Correct the discrepant claim information, reflecting deduction or addition of funds from/to the initial payment (partial recovery) Reversal of a claim (full recovery) Line item adjustment of a claim (reduction in payment on the pharmacy remittance) Deductions will be made against future claim submissions and will be recorded on the pharmacy s remittance statement (or 835) after all appeals on the audit findings have occurred. findings may result in a Corrective Action Plan (CAP). Failure to comply with a CAP may result in additional audits or additional corrective actions that may include penalties up to and including termination from Humana s pharmacy network. Failure or refusal to comply with an audit request may result in a full recovery of the total amount paid to the pharmacy for the claims involved in the audit review, including all amounts or fees paid to the

pharmacy by Humana and/or its member(s). Refusal or denial to comply with any audit type (as described below in Section 2) may result in corrective action up to and including termination of the pharmacy s Provider Agreement with Humana. In General, the Process is: Humana Pharmacy Humana Humana Pharmacy Pharmacy notified of scheduled audit Submits supporting documentation reviews documentation Notifies pharmacy of initial audit results Post audit window to submit rebuttal documentation Humana Review post audit documentation and notify pharmacy of final results Pharmacy Appeal window to submit appeal form Humana Appeal documentation reviewed and audit results finalized Humana Claims adjustment process complete 2. Types/Description of Process Humana currently utilizes the following types of pharmacy audit: 2.1 Telephone In some cases, the pharmacy may be contacted via phone to verify claim(s) submission and request the pharmacy to correct claim billing, if necessary. This type of audit will only be done on a small number of claims; any large group of claims will be reviewed through desktop or onsite processes. Failure to comply with a telephone audit will result in either a desktop or an onsite audit. 2.2 Desktop Claims selected for desktop audit are grouped together and audited concurrently. The pharmacy will receive, via established communication method (most often letter), a communication requesting claim(s) documentation from the pharmacy that will include a specific deadline (typically 30 calendar days), the claim(s) being audited, required documentation, and auditor contact information. The pharmacy must submit requested documentation for all indicated claims back to Humana to substantiate and validate claims previously received. Failure to respond to an audit by the initial due date (unless an extension is granted prior to the due date) will result in assessment of a penalty according to the following chart: If documentation is received: Prior to the audit deadline After the audit deadline but before the post audit deadline None Penalty assessed will be: 25 percent of the total value of the audited claims

After the post audit deadline 100 percent of the total value of the audited claims The pharmacy may submit documentation to Humana via mail or e-mail. Humana will review documentation submitted by the pharmacy to validate accuracy of the documentation for the claim previously submitted, and for compliance with all laws, rules, regulations, Humana benefit limits or other requirements as outlined in the Pharmacy Provider Manual and Pharmacy Provider Agreement. Upon review of all documentation, an initial audit result letter will be sent to the pharmacy. The pharmacy will be allowed approximately 30 calendar days from the date of the initial audit result letter to supply additional documentation to mitigate discrepant claims (see Humana List for acceptable documentation, in Appendix 6.1). Humana will review any additional documentation received by the deadline and determine if any previous discrepancies can be removed. Upon review of any and all documentation received prior to the deadline, a final audit result letter will be sent to the pharmacy. The pharmacy will be allowed approximately 15 calendar days from the date of the final audit result letter (specified in the final audit result letter) to further dispute by submitting an appeal. All appeals must be properly submitted on an appeal form, as outlined in section 3.0. 2.3 Onsite A pharmacy selected for an onsite audit will receive a notification letter via mail, which specifies the date of the audit, date range of claims being audited and auditor contact information. The auditor will follow up with the pharmacy approximately seven calendar days prior to the audit to supply additional information for the pharmacy to prepare for the audit and to answer any questions. Failure to comply with an onsite audit may result in a penalty equal to the total value of the audited claims, as well as a corrective action up to and including termination from Humana s pharmacy network. An onsite audit will be conducted at the pharmacy s physical location. The auditor will review documentation including, but not limited to, hard copy prescription documentation, signature logs, documentation logs (if any) and compliance with the Pharmacy Provider Agreement. Humana requires the auditor be provided a clean work space, away from the dispensing area (as to not disrupt pharmacy practice), and assistance in locating requested audit documentation. All documentation must be pulled within eye sight of the auditor, if possible, or the auditor reserves the right not to accept the documentation. An onsite audit will generally involve more claims than a telephone or desktop audit. The onsite auditor will also review pharmacy procedures, compliance with specific sections of the Provider Agreement, and any applicable rules, laws and regulations. Upon review of all documentation, an initial audit result letter will be sent to the pharmacy, typically within seven to 10 business days of the onsite audit. The pharmacy will be allowed approximately 30 calendar days from the date of the initial audit result letter to supply allowable additional documentation to mitigate discrepant claims (see Humana List for acceptable documentation, located in Appendix 6.1). The auditor will review additional documentation received by the deadline and determine if any previous discrepancies can be

removed. Upon review of any and all documentation received prior to the deadline, a final audit result letter will be sent to the pharmacy. The pharmacy will be allowed approximately 15 days from the date of the final audit result letter (specified in the final audit result letter) to further dispute by submitting an appeal. All appeals must be properly submitted on an appeal form, as outlined in section 3.0. 3.0 Appeals All pharmacies are provided an opportunity to respond to audit findings by filing a written appeal on the Pharmacy Appeal Form (see Pharmacy Appeal Form, in Appendix 8.1) within 15 days from the date of the final audit result letter. The intent of the appeal is to allow pharmacies the opportunity to provide a written explanation describing why the pharmacy disagrees with the audit findings for each claim deemed discrepant. It is not expected that pharmacies will produce additional prescription documentation during an appeal, as it is expected that the pharmacy would have submitted all applicable documentation prior to an appeal. Appeals should be submitted via certified United States Postal Service, FedEx, UPS or other certified carrier. The Humana Pharmacy Appeal Committee will not, as a matter of policy, review appeals or disputes not submitted on the Humana Pharmacy Appeal Form. Upon review of an appeal, an appeal results letter will be sent to the pharmacy, detailing the decision of the Humana Pharmacy Appeal Committee. 4.0 Adjustment Any calculations represented on any initial or final audit reports are estimated or proposed recoveries. Actual recovery amounts are not known until the claim adjustments occur and are communicated through the pharmacy s remittance advice statement. Humana will offset amounts due to Humana due to audits from subsequent pharmacy payments until the audit recoveries have been collected in full. In the event Humana is unable to offset from future payments, the pharmacy must pay Humana the amount owed within 30 calendar days of written notice from Humana. 5.0 Documentation Requirements In general, for a hard copy prescription or electronic prescription, the front and back of the hard copy or electronic prescription documentation must be submitted. The following are elements of the prescription that must be included on the documentation (unless contradicted by state law) for the documentation to be considered acceptable: Name of the patient Date of prescription issuance Name, strength and dosage form (if applicable) of the drug prescribed Directions for use (or the maximum daily dosage allowed by the prescriber) Quantity prescribed Number of refills (or a clear start and stop date or for cycle fills a continue until told to discontinue date)

National Provider Identifier (NPI) of the prescriber (or at minimum the name of the prescriber for nonscheduled medications) Prescriber s Drug Enforcement Agency (DEA) registration number (for scheduled medications) Prescriber s signature (or in the case of a phone-in prescription order the full name of the individual from whom the pharmacist received the prescription order) The unique prescription identifier (prescription number) 5.1 Documentation Requirements for an Electronic Prescription According to the Pharmacy Provider Agreement, pharmacies must be able to accept electronically submitted prescriptions from prescribers in National Council for Prescription Drug Programs (NCPDP) Version 8.1 (Prescriber/Pharmacist Interface SCRIPT Standard, Implementation Guide) or most current NCPDP format. Pharmacies are required to populate NCPDP field 419-DJ with the prescription origin code of three for all prescriptions submitted to a provider using an eprescribing method for claims submitted to Humana s claims processor/administrator. 5.2 Documentation Requirements Electronic Prescriptions for Scheduled Medications Pharmacy systems must comply with Drug Enforcement Agency (DEA) guidance related to requirements for electronic prescribing of controlled substances. Pharmacy systems that accept electronically prescribed prescriptions for scheduled medications must retain digital signatures received. Pharmacies must also validate the DEA registration of a prescriber from whom an electronic prescription has been received when there is some reason to suspect a lack of validity. 5.3 Documentation Requirements for Retail Pharmacy Providers There are no additional requirements related to hard copy prescription documentation, unless otherwise required by law. 5.4 Documentation Requirements for Long-term-care Providers Humana recognizes the elements of a prescription may not be found on one hard copy prescription, but requires a combination of the Chart Order and the Prescription Drug Order to constitute a full hard copy prescription. Please see Appendix 8.2 for long-term-care guidelines. 5.5 Signature Log Elements Humana requires, at minimum, the following data elements on all signature logs:

Full Patient Name Date of Fill Rx Number Signature of the Member (or legal representative) Date of Pick Up or Delivery 5.6 Signature Log Elements for Retail Pharmacy Providers All of the elements listed above must be present on a signature log, unless required by law. 5.7 Signature Log Elements for Long-term-care Providers Humana recognizes that, generally, long-term-care pharmacies do not collect signature logs as is the standard for retail pharmacy providers. If a signature log is provided by a long-term-care pharmacy and meets the requirements of a retail pharmacy provider, Humana will accept it as a signature log for a long-term-care provider. However, if a signature log is not available, Humana requires a delivery manifest or other documentation that clearly displays the member received the medication. Please see Appendix 8.2 for long-term-care guidelines. 5.8 Additional Documentation Humana has the right to request additional documentation for auditing purposes, which includes, but is not limited to, the following: Purchase Invoices and Reports Credentialing Documentation Contract Compliance Documentation Compliance with Medicare Rules and Regulations Training Documentation Employee Documentation 6.0 General Pharmacy Guidelines 6.1 Quantity/Days Supply The quantity prescribed by the physician should be dispensed and submitted to Humana in conjunction with the correct days supply. If Humana rejects the claim, due to quantity or days supply limits, the claim should be readjudicated with a quantity and days supply consistent with the directions for use and the plan s specific limitations. For eye drops, inhalers and topical agents, if the prescription is written for a quantity of one, the pharmacy should dispense the smallest commercially available product. If a larger package size is dispensed, an appropriate reason should be documented either on the hard copy prescription or within another readily retrievable system and should be provided during an audit.

6.2 Insulin Claims should be submitted for the correct quantity and days supply based upon the number of units per day. As it is typical for insulin doses to vary, a maximum daily dose should be used to calculate the quantity and days supply. The maximum daily dose should always be documented on the hard copy prescription and should be provided during an audit. 6.3 Dispense As Written (DAW) Humana recognizes the NCPDP codes for dispense as written situations. For any prescription submitted with a DAW code other than zero, the reason for the selected code must be documented and must be in compliance with all applicable laws, rules and regulations. 6.4 Ophthalmic/Otic Solutions Unless otherwise indicated by the manufacturer, Humana calculates solutions as having 20 drops per milliliter (ml). All claims should be submitted based upon the 20 drops per ml guideline and adjusted to the proper quantity and days supply accordingly. 6.5 Ophthalmic/Otic Suspensions Unless otherwise indicated by the manufacturer, Humana calculates suspensions as having 15 drops per milliliter (ml). All claims should be submitted based upon the 15 drops per ml guideline and adjusted to the proper quantity and days supply accordingly. 6.6 Inhalers In most cases, inhalers should be submitted according to the metric decimal quantity as indicated by the manufacturer and not by the number of inhalations for the given inhaler. 6.7 Kits In most cases, kits should be billed by the number of kit(s) dispensed at the time of fill, not the number of units found within the kit. If the number of kit(s) is not applicable, reference the First Data Bank (http://www.firstdatabank.com). 6.8 Injections In general, injections should be billed by the number of ml being dispensed, not the number of injections or bottles dispensed. If the number of ml is not applicable, reference the First Data Bank (http://www.firstdatabank.com).

6.9 As Directed / PRN With the exception of dosage packs, Humana prohibits the use of As Directed. For drugs that may fluctuate dosage, a maximum or up to daily dose should be used to calculate the appropriate days supply and documented on the hard copy prescription. For topical agents, the affected area should be documented on the hard copy prescription or another readily retrievable system, unless dispensing the smallest commercially available package. 6.10 Compounds The cost of the compound should not exceed the contract rate of the covered ingredients used. Upon audit, Humana will require a compound worksheet be submitted for each compound, which includes the NDC, quantity and cost of each ingredient. 6.11 Reversals Humana requires any claims not picked up within 15 business days to be reversed. 6.12 Origin Code For a new prescription, a valid Prescription Origin Code (POC) must be submitted beginning January 1, 2010. Humana requires this field to be populated correctly for all claims, Medicare and commercial. POC is to be populated with the approved valid values below: 1 = Written 2 = Telephone 3 = Electronic 4 = Facsimile 6.13 Prescriber ID Humana requires the correct National Provider Identifier (NPI) be submitted for each claim. When an NPI is not available or cannot be obtained, the appropriate Drug Enforcement Agency (DEA) registration number may be used. Submission of an incorrect, invalid or dummy prescriber identifier will result in a claim being considered discrepant. 6.14 Changes to Prescriptions Any change in an element of a prescription, as defined in section 5.0 (Documentation Requirements), must be documented and submitted along with all other documentation related to the hard copy prescription.

6.15 Package Sizes The package size dispensed must be the proper package size based upon the directions of the prescription. If the proper package size is not in stock, Humana expects (unless in an emergency) either the smaller package size will be dispensed or the proper package size will be ordered for dispensing within 24 hours. 6.16 Risk Evaluation and Mitigation Strategy (REMS) Programs Medications with special and specific Food and Drug Administration (FDA) guidelines must be dispensed in accordance with the guidelines. 6.17 Network Selection All claims must be submitted to the appropriate network and reimbursed based upon the rate for the network. To ensure the correct network is selected, ensure the days supply is correctly calculated and the patient location code and level of service fields are entered appropriately. 7.0 List The Code List defines each type of potential discrepancy identified during an audit. In addition, this list should be used to respond to the audit findings. Finally, it provides justification for the type of charge back occurring upon finalization of the audit. Humana requires the following elements to consider a prescriber statement valid for post-audit documentation: The address and telephone number of the prescriber should be printed on the prescriber s own letterhead Member name, medication(s), date(s) of service, strength, directions, quantity ordered and refills (if applicable) should be included within the document The original method and date of the prescription should be included within the document The document should include the prescriber s signature Note: Call in or Phone in prescriptions are not acceptable during the post audit phase. Humana requires the following elements to consider a member statement valid for post-audit documentation: Member address and telephone number Medication(s), Rx number(s) and date(s) of service

Member signature BMN Dispense as Written Brand medication billed, but member or prescriber s brand-only order is not documented. Prescriber must specify "Dispense as Written" on hard copy or pharmacy must document prescriber request or, when required by state regulations, member request for brand name dispensing. DAW 1 Prescriber Statement, which validates that the substitution of generic product was authorized. DAW 2 Member Statement, which validates that the substitution of generic product was authorized. DAW 7 Legal reference, which mandates that a specific product be dispensed by brand name only. Partial charge back due to pharmacy submitting incorrect DAW code. Claim will be corrected in the amount of the difference between the brand and generic contracted rate. CPDF Compound Incorrectly Billed A compounded prescription is incorrectly billed resulting in an overpayment. Compound worksheet with ingredients listed National Drug Code (NDC) and Quantity. Full charge back due to compound being billed with noncovered Part D drugs, an incorrect compound indicator or other indicators that lead to inappropriate payment. CPDP Compound Incorrectly Billed A compounded prescription is incorrectly billed resulting in an overpayment. Compound worksheet with ingredients listed (NDC and Quantity). Repriced with compound worksheet. The overpriced amount will be recovered based upon the pricing available in the compound worksheet. CPDW Compound Worksheet Required Prescription is submitted using an inappropriate compound indicator or incorrect NDC #. Compound worksheet required. Full charge back due to missing compound worksheet to validate the claim.

DDB Different Drug Billed Pharmacy billed for a different medication than the one ordered by the prescriber with no documentation on prescription or member profile. For therapeutic exchange, prescriber statement will be accepted in post audit to verify change was authorized in prescribed product. All other discrepancies not due to therapeutic exchange, no post audit documentation will be accepted. Full charge back due to pharmacy submitting claim for different product than prescribed. Documentation should be available at the time of audit. DEA No DEA The hard copy prescription does not contain a DEA number (CII-CV drugs only). No post-audit documentation will be accepted. Full charge back because this element is required by law for a controlled substance prescription to be valid. Post-audit documentation will not be accepted because according to federal regulations, the prescriber DEA should be on the prescription hard copy prior to dispensing. If a controlled substance prescription does not contain the prescriber's DEA, the prescription should not be filled until the prescriber's DEA can be obtained and documented. DID Wrong Prescriber Incorrect prescriber billed or inappropriate use of prescriber ID. Prescriber statement from a nonsanctioned prescriber that shows the prescriber billed is a member of the same practice as the correct prescriber or proof that a reasonable effort was made to bill the correct prescriber ID. CII-CV, no post-audit documentation will be accepted. Full charge back due to pharmacy submitting claim with an incorrect prescriber ID or with a sanctioned prescriber ID. A prescriber statement from a nonsanctioned prescriber will be accepted as post-audit documentation to verify the submitted prescriber is from the same practice as the correct prescriber. No post-audit documentation will be allowed for controlled substance prescriptions.

DN-1 Wrong Member Billed DUP Duplicate Claim The member identified on a hard-copy prescription is not the member identified on the paid claim. Member statement or member identification Full charge back due to claim billed to wrong member. A member statement will be accepted during post audit to clarify the member s identification. Multiple claims for the same prescription fill were paid. A duplicate claim is defined as the same member, product, dosage and close approximate fill dates. No post-audit documentation will be accepted. Full charge back due to duplicate claim. Humana's expectation is that pharmacies will obtain appropriate authorization to fill scripts early rather than circumventing system edits. No post-audit documentation will be accepted because this situation could lead to a potential patient safety risk. EQB Exceeds QTY Limits/Overfilled QTY Quantity billed exceeds the quantity authorized by the prescriber or plan. The pharmacy submitted a quantity greater than the quantity prescribed or a quantity that would last greater than the days supply limit of the plan. No post-audit documentation will be accepted. Partial charge back will reflect the difference between the original paid amount and the corrected paid amount. No post-audit documentation will be allowed for excessive quantity. EXP Exceeds Time Limit The prescription is filled or refilled for a time period longer than allowed by the plan or applicable law. An updated copy of the state code or federal regulation defining the valid length of time that prescriptions of the control level in question may be filled. Full charge back of discrepant claim submissions due to the prescription expiring prior to being dispensed. Updated legal information allowed for post-audit documentation, if pharmacy can provide legal reference that can be validated as more current or different from what was cited in audit.

FBW Filled before Written Prescription was filled before date written. Prescriber statement that validates the prescriber indicated the incorrect date. Full charge back due to claim being billed before script was written. Prescriptions should not be filled before the original date written without authorization from the prescriber. FTR Failure to Respond Pharmacy fails to respond to audit. Tracking evidence indicating that the pharmacy attempted to mail the audit documentation within the audit window. Full charge back due to pharmacy not responding to desktop audit. Tracking information showing proof of delivery or attempt to ship package. ICS Wrong Pack Size The package size submitted on the claim differs from the package size dispensed by the pharmacy or if the pharmacy bills multiples of a smaller size NDC when a stock larger size is available resulting in excess margins. Documentation from wholesaler that shows supply issues occurred at the time of fill with the larger package size. Full charge back due to pharmacy submitting claim for different product than prescribed (acceptable substitution an exception) or claim submitted for incorrect package size. Prescriber statement allowed for post audit to verify change in prescribed product or wholesaler documentation verifying that the specific package size in question was not in stock or unavailable at the time of fill. IDS Wrong or Incorrect Day Supply The days supply value submitted by the pharmacy is not consistent with the quantity and directions. No post-audit documentation will be accepted. Partial charge back due to pharmacy submitted incorrect day supply calculation per prescribed directions. No post-audit documentation allowed because submitted day supply does not match the hard copy's prescribed directions.

INV No Date Written INVP No Doctor Name INVD No Drug Name INVN No Member Name Hard copy prescription contains no written date, as required by law. Prescriber statement (CII-CV, no post-audit documentation will be accepted.) Full charge back because this element is required by law for a prescription to be valid. Prescriber statement will be allowed for post-audit documentation to verify that submitted information is correct. The hard copy prescription does not identify the Prescriber by signature, as required by law. Prescriber statement (CII-CV, no post-audit documentation will be accepted.) Full charge back because this element is required by law for a prescription to be valid. Prescriber statement will be allowed for post-audit documentation to verify that submitted information is correct. The hard-copy prescription does not contain the name of the drug to be dispensed, as required by law. Prescriber statement (CII-CV, no post-audit documentation will be accepted.) Full charge back because this element is required by law for a prescription to be valid. Prescriber statement will be allowed for post-audit documentation to verify that submitted information is correct. The hard-copy prescription contains no member name, as required by law. Prescriber statement (CII-CV, no post-audit documentation will be accepted.) Full charge back because this element is required by law for a prescription to be valid. Prescriber statement will be allowed for post-audit documentation to verify that submitted information is correct.

INVS No Strength IOC Incorrect Origin Code LAWF Law Not Followed LAWP Law Not Followed The hard-copy prescription, for a drug available in more than one strength, fails to identify the strength to be dispensed, as required by law. Prescriber statement (CII-CV, no post-audit documentation will be accepted.) Full charge back because this element is required by law for a prescription to be valid. Prescriber statement will be allowed for post-audit documentation to verify that submitted information is correct. The origin code submitted for the claim differs from the hard-copy prescription. No post-audit documentation will be accepted. This element is used during a desktop audit to ensure that submitted documentation is accurate as referenced in Humana's provider contract. CMS has also provided guidance stressing the accuracy of this field for correct Prescription Drug Event (PDE) submissions. Full charge back due to pharmacy submitting claim with an incorrect origin code. Post-audit documentation will not be allowed because there is no reasonable documentation available to remove the discrepancy due to the requirement to submit the correct origin code at the time of fill. Prescription not filled in accordance with state/federal law. An updated copy of the state code or federal regulation with reference code number. Full charge back due to pharmacy not operating in observance of federal or state regulations. Updated law information allowed for post-audit documentation if pharmacy can provide legal reference that can be validated as more current or different from what was cited in the audit. Prescription not filled in accordance with State/Federal law. An updated copy of the state code or federal regulation with reference code number. Partial charge back due to pharmacy not operating in observance of federal or state regulations. Updated law information allowed for post audit if pharmacy can provide legal reference that can be validated as more current or different from what was cited in audit.

MP-1 Missing Prescription Original hard-copy prescription cannot be found on file during the audit. Prescriber statement. Full charge back due to pharmacy not providing prescription authorization record. Prescriber statement allowed for post-audit documentation to verify that prescription was written by prescriber for specific member and listed date. MSLD Not Dispensed Prescription is billed, but not dispensed to member. Drugs are not returned to stock. Partial fills not picked up and not reversed. Member statement. Full charge back due to prescription not being picked up or delivered. Member statement allowed for post-audit documentation to confirm receipt of prescription. MSL Signature Not Found Results NORX No Rx Number The signature documenting receipt of pharmacy services cannot be found in the signature logs. Member statement. Full charge back due to prescription not being picked up or delivered. Member statement allowed for post-audit documentation to confirm receipt of prescription. The hard copy prescription contains no unique prescription identifier number. A computer generated label/sticker with all defined prescription elements. Full charge back because this element is required by law for a prescription to be valid. Computer-generated label will be allowed for post-audit documentation to verify that submitted information is correct.

NQY No Quantity Prescription quantity is not complete; no quantity on prescription. Prescriber statement. Full charge back because this element is required by law for a prescription to be valid. Prescriber statement will be allowed for post-audit documentation to verify that submitted information is correct. NSI No Directions For Use or Use as Directed OTHF Miscellaneous Prescription lacks specific, calculable directions (use as directed or missing directions). Prescriber statement (must include exact directions or a maximum daily dose). Full charge back because this element is required by law for a prescription to be valid. Also required for accurate dosage and day supply calculation. Prescriber statement will be allowed for post-audit documentation to verify that submitted information is correct. OTHER is assessed when an issue has been cited that is not listed elsewhere on the discrepancy list. Detailed explanation will be given when this discrepancy is cited. Depends upon discrepancy. Detailed explanation will be given when this discrepancy is cited. Full charge back due to any other reason not listed elsewhere on the Humana Pharmacy Solutions Code List. This discrepancy will be cited when circumstance requires claim correction and education to pharmacy. Postaudit documentation will be allowed or not allowed depending on discrepancy and circumstance.

OTHP Miscellaneous OTHER is assessed when an issue has been cited that is not listed elsewhere on the discrepancy list. Detailed explanation will be given when this discrepancy is cited. Depends upon discrepancy. Detailed explanation will be given when this discrepancy is cited. Partial charge back due to any other reason not listed elsewhere on the Humana Pharmacy Solutions Code List. This discrepancy will be cited when circumstance requires claim correction and education to pharmacy. Postaudit documentation will be allowed or not allowed depending on discrepancy and circumstance. RXC Altered Prescription Prescription altered without appropriate documentation. Prescriber statement validating changes were authorized and appropriate. Full charge back due to unauthorized or improperly documented alterations to prescription hard copy. A prescriber statement will be allowed for post-audit documentation to confirm or validate that changes were authorized and appropriate. RXCQ Cut Quantity A quantity less than that prescribed is billed and additional refills are dispensed resulting in undue dispensing fees. Member statement that indicates a request for change. Partial charge back in the amount of the dispensing fee due to the pharmacy submitting incorrect quantity by submitting a quantity greater than the face value of the RX or by cutting the quantity to less than prescribed. No post-audit documentation will be allowed for excessive quantity. A member statement will be allowed for post-audit documentation on cut quantity. Member statement will be used to confirm his/her request to receive less than prescribed.

UAR Unauthorized Refill Prescription is refilled more times than prescribed. Prescriber statement validating prescriber's authorizing refills prior to refill being submitted. Full charge back for any claims submitted for unauthorized refills due to number of authorized refills exceeded or incorrect calculation of quantity or day supply. Prolonged duration of therapy could lead to a potential patient safety risk. Prescriber statement will be allowed for post-audit documentation, validating prescriber authorized additional refills prior to refill being filled. UAR2 Refill Too Soon Prescription is refilled sooner/more frequently than appropriate with respect to quantity and directions for use. No post-audit documentation will be accepted. Full charge back due to duplicate claim (same member, product, dosage and close approximate fill dates) or refill too soon (that misses Refill Too Soon (RTS) logic due to incorrect submitted day supply). Humana's expectation is that pharmacies will obtain appropriate authorization to fill scripts early rather than circumventing system edits. This situation could lead to a potential patient safety risk. Post-audit documentation will not be allowed because there is no reasonable documentation available to remove the discrepancy as a previous claim was submitted incorrectly that allowed this claim to pay.

8.0 Appendix 8.1 Pharmacy Appeal Form PHARMACY AUDIT APPEAL FORM INSTRUCTIONS ed pharmacies have the right to appeal the findings of an audit. The intent of the appeal process is to allow pharmacies the opportunity to provide a written explanation for each prescription marked discrepant. Pharmacy audit appeals are heard by the Humana Appeal Committee. The appeal committee conducts its review based on the original audit documentation submitted and the appeal explanation provided by the pharmacy for the claim(s) in question. Pharmacies should utilize the Pharmacy Appeal Form to provide an explanation as to why they disagree with Humana Pharmacy Solutions audit findings for each prescription deemed discrepant. In order for an appeal to be reviewed by the Humana Appeal Committee, all of the information requested in the attached Pharmacy Appeal Form must be provided for each disputed prescription prior to the appeal deadline. Only claims submitted on a properly completed Pharmacy Appeal Form will be reviewed by the Humana Appeal Committee. Appealing pharmacies may only provide information and documentation different from what was originally submitted for the audit. The pharmacy may include additional sheets or attach a type written explanation to the Pharmacy Appeal Form, if needed. If you have any questions about your appeal or the appeal process, please call 502-580-3232 or e-mail pharmacyauditcompliance@humana.com. Upon Humana Appeal Committee review, you will be notified of the appeal decision. [Form number must go here]

PHARMACY AUDIT APPEAL FORM Pharmacy Name: NCPDP/NPI #: Date: Pharmacy Contact Name: Contact Phone Number: Prescription Number: Date(s) of Service: Humana Code: Reason for Appeal: Attachment Included: Yes / No FOR HUMANA PHARMACY SOLUTIONS INTERNAL USE ONLY DATE RECEIVED: APPEAL MEETING DATE:

8.2 Humana LTC Pharmacy Documentation Guidelines Source: National Association of Boards of Pharmacy and American Society of Consultant Pharmacist (NABP/ASCP) Joint Report: Model Rules for Long-term-care (LTC) Pharmacy Practice, which is a guideline of how NABP and ASCP believe LTC pharmacies should be operating. LTC pharmacy audits may require auditors to look at multiple pieces of documentation to determine whether the billed claim is appropriate. For a hard copy prescription the following are elements of the prescription that must be included on the documentation to be considered acceptable: name of the member, date of issuance, name, strength, and dosage form of the drug prescribed (if applicable), directions for use, quantity prescribed, number of refills (or a clear start and stop date or for cycle fills a continue until told to discontinue date), DEA or NPI of the prescriber or name of the prescriber for noncontrolled prescriptions, and the prescriber s signature. Acceptable Forms of 1. Either the combination of the "Prescription Drug Order," AND the "Chart Order" or either of the above elements found by itself 2. A hard copy prescription from a prescriber as defined by state law 3. A telephone prescription with all appropriate information as defined by state law 4. A properly documented E-script 5. Fax request for refills, as long as it contains all appropriate information (as found on a retail audit) and is clear it came from and was approved by a prescriber 6. Discharge orders with a clear start and stop date 7. Progress notes may accept prescriber order written in progress notes if prescriber notes contain all appropriate prescription elements 8. Any other documentation or combination of documentation that displays all prescription elements and demonstrates clearly that the documentation originated from a prescriber The following will NOT be accepted as a hard copy prescription: 1. Medication Administration Records (MARs) or copies of MARs 2. LTC nurse call-in notes for controlled substances 3. Labels, which do not contain required prescription information 4. Progress notes (unless they contain all prescription information) 5. Screen prints (unless for an E-script) 6. Refill sticker alone For Signature Logs ANY of the following should be accepted: For signature logs, the following are elements of the log that must be included on the documentation to be considered acceptable: If a patient picks up the medication at the facility patient name, RX number(s), date of service, signature of who received the medication and date received. If delivered to a

facility patient name, date of service, RX number(s), date of service, facility delivered, date of delivery and name of person who received medication. 1. A signature log with all required elements 2. A delivery manifest, with all elements, or a delivery manifest on which the prescriptions delivered can be traced back to the order number 3. A copy of an MAR, which shows the prescription was administered and the name and signature of the person who administered the mediation, the date and time the medication was administered 4. Dated and signed statement from nurse or staff member with appropriate information as listed above The following will NOT be accepted for a signature/delivery log: 1. Patient receipt without patient signature 2. Compound worksheet 3. Any documentation that does not clearly display what was delivered, who delivered the medication, where it was delivered and the date of the delivery. Cycle Fills: As per the Humana Pharmacy Provider Manual: LTC pharmacies that provide medications in a cycle fill type of system may bill through the point-of-sale system on a cycle basis, as long as the cycle doesn t interfere with the normal day supply and quantity limit (QL) edits. This may be done at the first of the month or at the end of the month, as long as the time interval in between billing cycles is consistent. In addition, cycle fills may be utilized for maintenance medications only. For cycle fills, documentation must clearly state the prescriber intended and authorized for the member to continue the medication. Documentation Submission: For chain pharmacies, documentation should be sent per your chain requirements. For independents, all documentation should be sent to Humana Pharmacy Solutions at the following address: Attention: Pharmacy WFP 6W 325 W Main Street Louisville, KY 40202

8.3 FAQ Document Frequently Asked Questions (FAQ) 1. Q: Why is my pharmacy being audited and how can I prevent future audits? A: All claims are reviewed by multiple audit factors on a daily basis. Claims are selected randomly for audit through the use of these factors. 2. Q: For a telephone audit, can I correct the claim(s) being audited? A: Yes. If a telephone audit occurs, pharmacies are encouraged to reverse and correctly reprocess the discrepant claims at the time of the audit. 3. Q: For a desktop or onsite audit, can I correct the claims being audited? A: No. The pharmacy should not attempt to adjust or correct these claims on its own. Humana will handle any adjustments to audited claims based on the final outcome of the audit. 4. Q: How will I be notified of a desktop or onsite audit? A: Depending on your pharmacy s preference, either through e-mail or mail (UPS or certified mail.) 5. Q: What should my pharmacy submit for a desktop audit? A: As per section 3.2 of this audit guide, an original hard copy prescription (front and back), a copy of the signature log or delivery manifest, and a compound worksheet if applicable. Also, please provide the requested copy of the computer-generated hard copy label, and if applicable, a copy of the administration record(s) for vaccines. 6. Q: If a compound prescription is in question, what should I submit? A: In addition to the hard copy documentation, a compound worksheet including the NDC of each ingredient, the cost of each ingredient and the quantity of each ingredient used in the compound. 7. Q: How are compound prescriptions calculated? A: Based upon the compound worksheet, the quantity and contract rate for each ingredient is added together. 8. Q: Who should I send my documentation to for an audit? A: To the pharmacy audit general account e-mail address, mailing address, etc. All documentation should be submitted on unstapled, 8 ½ x 11 inch paper. 9. Q: What can my pharmacy do to prepare for an onsite audit? A: The pharmacy should have all documentation from the previous 18-24 months readily retrievable. In addition, Humana s onsite vendor will supply a range of prescriptions two to three days prior to the audit. The prescription books associated with these prescriptions should be in numerical order and readily retrievable prior to the audit.

10. Q: Can my pharmacy be provided an exact list of prescriptions prior to an onsite audit? A: No. To ensure the integrity of the audit, Humana s onsite vendor will not supply a list of exact prescriptions until the date of the audit. 11. Q: Should I have a staff member assist during the onsite audit? A: Yes. It is preferred that a staff member assist with the audit to ensure all documentation is given to the auditor at the time of the audit. 12. Q: How can the audit deadline be extended? A: It is expected that all documentation be submitted by the due date. However, Humana reviews requests for extensions as requested by the pharmacy. If a pharmacy requests an extension after the deadline has passed, Humana will not grant the extension. 13. Q: When can my pharmacy expect to receive an audit report? A: To comply with state laws and contractual requirements, Humana strives to review audit materials in a timely manner. - For onsite audits, the initial finding report is typically sent within seven to 10 days of the audit. The final audit report is typically sent within 30 days of the deadline. - For desktop audits, all audit reports are typically sent within 30 days of the audit deadline. 14. Q: What type of discrepancy can I supply additional documentation for during post audit? A: As per section 6, the Humana Pharmacy Solutions audit discrepancy code list, outlines what is acceptable for each discrepancy type during post audit. 15. Q: What type of discrepancy can I appeal? A: An appeal can be submitted on any claim marked discrepant, as long as the appeal is filed under the guidelines in section 6.2 of this audit guide, using the Pharmacy Appeal Form. 16. Q: Who reviews my appeal? A: The Humana Pharmacy Appeals Committee, which is composed of several associates from numerous functional areas within Humana. 17. Q: My pharmacy provides other services such as delivery and drive-thru services to our patients. For these members, rather than require the patient to sign a signature log, we write mailed, delivery or drive thru to show that this prescription was delivered. Is this practice acceptable? A: No. The pharmacy handwriting mailed, delivery, drive thru or other interpretation does not validate that a patient has his/her medication. The pharmacy should provide a delivery manifest or patient statement. Humana does not accept the signature of the courier or delivery driver as proof of delivery. 18. Q: Will I receive a final/estimated charge back amount with my audit result? A: Yes. You will receive an estimated charge-back amount on all audit findings. The true and final amount cannot be calculated until the claims are adjusted and will appear on the pharmacy remittance statement.

19. Q: How and when will recoupments/penalties take place if applicable? A: Recoupments/penalties will take place within 30 calendar days of the audit closing, meaning all appeals have been exhausted. Recoupments/penalties will be offset from future claims payments. 20. Q: How long do I have to file an appeal? A: Appeals must be submitted on an appeal form and postmarked within 15 calendar days from the date of the final results letter. 21. Q: Who should I contact, with any questions about my audit? A: For Humana desktop audits, call 502-580-3232 or e-mail pharmacyaudit@humana.com For Humana onsite audits, call 215-551-3838 For Argus audits, please e-mail audit.pharmacy@argushealth.com For appeals, please e-mail pharmacyauditcompliance@humana.com