Pharmacy Administrative Manual

Pharmacy Administrative Manual January 2013

TABLE OF CONTENTS Section I. GENERAL INFORMATION Assistance.......................................... 1.1 Fraud, Waste, and Abuse............................... 1.2 Submission of Prescription Claims....................... 1.3 Paper Claim Form.................................... 1.4 RegenceRx BIN and PCN Information.................... 1.5 II. COMMERCIAL DRUG PROGRAM SPECIFICATIONS Benefit/Plan Specifications............................. 2.1 Preauthorization...................................... 2.2 Compounds......................................... 2.3 Submission of Vaccination Claims....................... 2.4 Vacation Supply..................................... 2.5 Refill To Soon....................................... 2.6 Formulary Changes to Commercial Formulary.............. 2.7 III. MEDICARE PART D PROGRAM SPECIFICATIONS Benefit and Plans.................................... 3.1 National Provider Identification........................ 3.2 BIN and PCN....................................... 3.3 BIN/PCN Combination............................... 3.4 Prescription Origin Code.............................. 3.5 FDA Non-Matched NDC List.......................... 3.6 Preauthorization..................................... 3.7 Compounds........................................ 3.8 Vacation Overrides.................................. 3.9 Refill to Soon....................................... 3.10 Long Term Care.. 3.11 Long Term Care Overrides............................. 3.12 Long Term Care Short Cycle Dispensing 3.13 Long Term Care Refill to Soon......................... 3.14 Formulary Changes to Medicare Part D................... 3.15 IV. MEDICARE PART D TERMS AND CONDITIONS Terms for Network Participation........................ 4.1 Confidentiality and Disclosure.......................... 4.2 Contractual Obligations............................... 4.3 Suspension of Services................................ 4.4 Pharmacy Documentation.............................. 4.5 Complete True and Accurate Data....................... 4.6 2

Payment............................................ 4.7 Non-Payment and Timely Submissions................... 4.8 Cost Sharing........................................ 4.9 Excluded Individuals, Entities, and Debarred Contractors..... 4.10 Conflict of Interest Policy.............................. 4.11 Code of Business Conduct and the Code of Business Conduct Guide.................................... 4.12 Audit.............................................. 4.13 Compliance Questions and Reporting of Non-Compliance.... 4.14 Fraud, Waste, and Abuse Federal Laws................... 4.15 Reporting Fraud, Waste, and Abuse..................... 4.16 Medicare Compliance Training......................... 4.17 Information for Medicare Members...................... 4.18 Pharmacy Member Notification of Lowest Priced Generic Equivalent................... 4.19 Pharmacy Member Notification for Non-covered Medicare Part D Drugs.............................. 4.20 3

I. GENERAL INFORMATION 1.1 Regence Pharmacy Services Assistance. Please contact us with questions about eligibility, preauthorization, coverage, exclusions or general billing issues. 1.1.1 Regence Pharmacy Services Phone Numbers. (800) 643-5918 Regence BlueCross BlueShield of Oregon (800) 572-0316 Regence BlueShield of Idaho (800) 572-0316 Regence BlueCross BlueShield of Utah (800) 732-9157 Regence BlueShield (in Washington) (888) 437-1508 RegenceRx & Medicare Part D 1.1.2 Fax Numbers. (503) 375-4406 Customer Service 1.1.3 Hours of Operation. Hours: Monday-Friday 7:00 a.m. 6:00 p.m. PST (after hours voice messaging is available) 1.1.4 E-mail Address. TRG_PharmQA@regence.com 1.1.5 Web Site. RegenceRx website: www.regencerx.com. Web site for information specific to pharmacies: www.regencerx.com/pharmacy. 1.1.6 For After Hours Assistance. Relay Health Help Desk Phone: (800) 214-1134 Hours: 24 hours/day; 7 days/week; 365 days/year 1.2 Fraud, Waste, and Abuse. To report possible Fraud, Waste and Abuse (FWA) please contact us via: Toll Free Hotline: (877) 4 RX-Tips (877) 479-8477) Mail: External Audit RX PO Box 1271 M/S E12B Portland, OR 97207 4

1.3 Submission of Prescription Claims. All claims are to be transmitted electronically, at Point of Sale (POS) using the BIN and PCN printed on the Member ID card. 1.3.1 Adjudication. The system will identify whether a claim has been accepted or rejected. If the claim is accepted, the system will indicate the amount paid and the copayment to collect. In the event that the calculated reimbursement is less than plan copay, the pharmacy must charge the Member the calculated reimbursement. If the claim is rejected, the system will also identify the reason(s) for the rejection. 1.3.2 System Availability. In the event the system is unavailable due to a major service disruption, paper claims may be submitted. Prior to submission of paper claims, Pharmacy should contact RegenceRx Pharmacy Customer Service to verify the status and anticipated duration of any system disruption. 1.4 Submission of Paper Claims. Please note that many benefit designs offer a lesser reimbursement when the Member does not use the on-line billing process. Members can request claim forms from their Group Administrator or the Customer Service Department using the phone number on the back of their medical ID card. I.4.1 Commercial Paper Claim Forms should be submitted to: RegenceRx PO Box 12625 M/S S2P Salem, OR 97309-0625 1.4.2 Medicare Part D Paper Claim Forms should be submitted to: RegenceRx PO Box 12625 M/S S3P Salem, OR 97309-0625 1.5 RegenceRx BIN and PCN Information. Payer sheets, sample ID cards, and this Administrative Manual are posted on our web site at: www.regencerx.com/pharmacy. If you do not have internet access, please contact the Pharmacy Contracting Department at 208-333-7818 to request paper copies. 1.5.1 Commercial. a. BIN 610622 PCN 02070000 RegenceRx b. BIN 610622 PCN 03000000 RegenceRx 300 c. BIN 610622 PCN 03010000 RegenceRx 301 d. BIN 610622 PCN 03020000 RegenceRx 302 e. BIN 610622 PCN 03030000 RegenceRx 303 5

f. BIN 610622 PCN 03040000 RegenceRx 304 g. BIN 610623 PCN 02050000 Regence BlueCross BlueShield of Oregon h. BIN 610624 PCN 02080000 Regence BlueShield (Washington) i. BIN 610624 PCN 02090000 Asuris Northwest Health j. BIN 610648 PCN 01820000 Regence BlueShield of Idaho k. BIN 610648 PCN 01890000 Regence BlueCross BlueShield of Utah 1.5.2 Medicare Advantage Prescription Drug (MA-PD s). a. Regence BlueCross BlueShield of Oregon MedAdvantage + Rx BIN 610623 PCN 02100000 b. Regence BlueShield (WA) MedAdvantage + Rx BIN 610623 PCN 02100000 c. Regence BlueShield of Idaho MedAdvantage + Rx BIN 610623 PCN 02100000 d. Regence BlueCross BlueShield of Utah MedAdvantage + Rx BIN 610623 PCN 02100000 e. Asuris TruAdvantage + Rx BIN 610623 PCN 02100000 1.5.3 Prescription Drug Programs (PDP s). a. Asuris Medicare Script (PDP for OR and WA) BIN 610623 PCN 02110000 b. Regence Medicare Script (PDP for ID and UT) BIN 610623 PCN 02120000 1.5.4 Secondary Billing (to be used only when a Commercial Regence plan is Secondary to any Medicare drug coverage). a. BIN 610647 PCN 02070000 RegenceRx b. BIN 610647 PCN 03000000 RegenceRx 300 c. BIN 610647 PCN 03010000 RegenceRx 301 d. BIN 610647 PCN 03020000 RegenceRx 302 e. BIN 610647 PCN 03030000 RegenceRx 303 6

f. BIN 610647 PCN 03040000 RegenceRx 304 g. BIN 610647 PCN 02050000 Regence BlueCross BlueShield of Oregon h. BIN 610647 PCN 02080000 Regence BlueShield (Washington) and Asuris Northwest Health i. BIN 610647 PCN 01820000 Regence BlueShield of Idaho j. BIN 610647 PCN 01890000 Regence BlueCross BlueShield of Utah 7

II. COMMERCIAL DRUG PROGRAM SPECIFICATIONS 2.1 Benefit and Plans. Most benefit plans have generic incentives and dispensing limitations as well as reduced benefits for prescriptions filled outside the pharmacy network. Many include a three-tier benefit design that offers a copayment/coinsurance for generics, a formulary copayment/coinsurance for formulary brand drugs and a higher copayment/coinsurance for non-formulary brand drugs. For more information regarding the RegenceRx formulary, please visit our web site at www.regencerx.com. 2.2 Preauthorization. There are certain prescription drugs which must be preauthorized before they will be considered for payment. Preauthorization means the process by which we determine that a prescription drug is medically necessary based on the information provided to us, before it is dispensed. Any prescription drug that requires preauthorization and is purchased without such preauthorization is not covered, and therefore not reimbursable. 2.2.1 Physician and Pharmacy Preauthorization Notification. Participating physicians and pharmacies will be notified which drugs require preauthorization. The prescribing physician can request preauthorization on behalf of the Member by contacting Regence Pharmacy Services to initiate the preauthorization request. Pharmacies or Members can also contact Pharmacy Customer Service directly to initiate a preauthorization request. For more information regarding prior authorization information, please visit our website at www.regencerx.com. 2.3 Compounds. Effective January 1, 2012, NDC 99999-9999-99 will no longer be accepted. All compound ingredients must be submitted in the Compound Segment within a single transaction per version D.0 specifications. Pharmacies will be paid based on U&C submitted on the claim. 2.3.1 Not all plans cover compound medications. Compound claims with a plan paid amount over $225 per claim require preauthorization for Idaho, Oregon, and Utah plans. 2.3.2 Certain plans in Washington can require preauthorization for compound claims with plan paid amount over $67.00 per claim. 2.4 Submission of Vaccination Claims. The Pharmacy must submit the following items: 1. Professional Service Code: NCPDP field 440-E5 (acceptable value is MA). 2. Incentive Amount Submitted: NCPDP field 438-E3 (acceptable amount greater than zero). 3. Result of Service Code: NCPDP field 441-E6 (acceptable values are 00, 1B, & 3A). 8

a. The field may have a drop-down in your pharmacy's system with approximately 20 options. If the Pharmacy cannot find the field or the codes, please contact your software vendor or internal help desk. 2.5 Vacation Supply. RegenceRx has developed a prior authorization code to use when refilling a prescription early in response to a member s request for a vacation supply. Transmit the claim as usual, using the authorization code 12312312341 in the NCPDP Prior Authorization/Medical Certification (PA/MC) field with a PA/MC type of 2 (other override). If a member requests more than one refill, please contact Regence Pharmacy Services to obtain authorization. 2.6 Refill Too Soon. If the dosage instructions on a prescription have changed, refill too soon edits can be overridden by using a PA/MC code as well. The authorization code is 45645645641 and the PA/MC type is 2 (other override). Please use this code when the dosing instructions have changed and the prescription needs to be refilled earlier than expected. The claim will still deny for refill too soon if the member has not yet used 75% of their previous fill following the new dosing directions. For a controlled substance, for members of our Utah Plan, 80% of their previous fill must be used following the new dosing directions, before the medication can be refilled. 2.7 Formulary Changes to Commercial Formulary. The Plan periodically makes changes to the Commercial formulary. Changes can be reviewed on our website at: http://www.regencerx.com/. 9

III. MEDICARE PART D PROGRAM SPECIFICATIONS 3.1 Benefit and Plans. For Medicare Part D, we offer two Plan types: Classic and Enhanced. Each has its own unique benefit structure and our Enhanced benefit offers coverage of Tier 1 generic medications during the Coverage Gap period. Both benefit plans include a multiple-tier benefit design that offers a copayment for generics, a copayment for preferred brand drugs, a higher copayment for non-preferred brand drugs and a coinsurance for miscellaneous injectables and specialty per 30 day supply (up to day supply limitations). For more information regarding the Medicare Part D benefits and formulary, please contact us at 1-888-437-1508. 3.2 National Provider Identifier (NPI). An active NPI shall be used by the pharmacy when submitting a Medicare Part D prescription drug event (PDE). RegenceRx will be using a process that will validate the NPI against a national master list during adjudication to verify that the NPI is active and for controlled medications that the Prescriber is within their scope of practice to prescribe the medication. 3.2.1 Inactive or Inaccurate NPI. In the event that the NPI is not active or inaccurate, a reject message will be returned allowing the pharmacy an opportunity to correct the information and resubmit. 3.2.2 SCC42 through 46 and SCC99. NCPDP has defined submission clarification codes of 42-46 to be used by the pharmacy during adjudication to indicate to RegenceRx that the pharmacy has validated the prescriber information submitted and believes the data to be accurate. Pharmacy can utilize the following submission clarification codes to override rejects as appropriate: 42 Plan s Prescriber data base indicates the Prescriber ID submitted is inactive or is not found. 43 Plan s Prescriber data base indicates the associated DEA to submitted Prescriber ID is inactive. 44 Plan s Prescriber data base indicates the associated DEA to submitted Prescriber ID is not found. 46 Plan s Prescriber data base indicates the associated DEA to submitted Prescriber ID does not allow this drug class. 99 For situations where the Prescriber data is missing or invalid. These submission clarification codes should be submitted by the pharmacy after the prescriber information has been validated. RegenceRx will be performing retrospective reviews of claims submitted with submission clarification codes listed above in order to assist the physician and the pharmacies with updating their NPI information as well as determining pharmacy compliance in the use of the codes. 3.3 BIN and PCN. Effective January 1, 2012, CMS is requiring that pharmacies bill using correct BIN and PCN numbers corresponding to the plan along with the group number 10

located on the member ID card. See section 1.5.2, for appropriate BIN and PCN numbers. 3.4 BIN/PCN Combination. Pharmacies must bill using the correct BIN/PCN combination for Medicare Part D members in order for claims to process. Pharmacies will be able to bill the BIN/PCN in combination with all claim types. For example, C is for Covered Drugs, B for Medicare Part B Drugs, and X for Excluded Drugs. 3.4.1 Benefit Stage Qualifier. When the claim is processed, a Benefit Stage Qualifier will be returned to alert the pharmacy how the claim was processed: CMS Drug Status Plan Type Benefit Stage Qualifier C Medicare Part D 01,02,03,04 B Part B 50,62 X Excluded 80 3.5 Prescription Origin Code. The Prescription Origin Code (NCPDP field 419-DJ) is required on all new Medicare Part D prescriptions. New prescriptions sent with a value of 0 will be rejected. 3.6 FDA Non-Matched NDC List. Claims submitted with NDC s that are on the FDA Non- Matched NDC List will reject with the message NDC not FDA listed. 3.7 Preauthorization. There are certain prescription drugs which must be preauthorized before they will be considered for payment. Preauthorization means the process by which we determine that a prescription drug is medically necessary based on the information provided to us, before it is dispensed. Any prescription drug that requires preauthorization and is purchased without such preauthorization is not covered, and therefore not reimbursable. 3.7.1 Physician and Pharmacy Preauthorization Notification. Participating physicians and pharmacies will be notified which drugs require preauthorization. The prescribing physician can request preauthorization on behalf of the Member, or the Member can submit a preauthorization request along with supporting documentation from the physician backing their request for consideration, by contacting Regence Pharmacy Services. Pharmacies can also contact Pharmacy Customer Service directly to initiate a preauthorization request. Prior authorization criteria can be found on our website at: http://www.regencerx.com/pharmacy/medicared.html. 3.8 Compounds. Effective January 1, 2012, compound claims must be based off of the pricing of each individual item in the compound and can no longer be paid based off U&C pricing. When submitting a compound claim, price each item separately. If there is an ingredient that is not a Part D covered drug, it will reject. The pharmacy has the option to enter a submission clarification code of 8 to override the reject and allow the claim to pay. However, in doing so the pharmacy is agreeing to reimbursement less the non-covered drug and they cannot bill the member. Claims over $100.00 will be subject 11

to preauthorization by Pharmacy Services. 3.9 Vacation Overrides. Vacation overrides are not allowed on Medicare Part D plans. If a Medicare Member needs an additional supply of medication, they will need to consider utilizing mail order or a network 90 day supply pharmacy to obtain an extended supply of medications (up to day supply limitations). To inquire about becoming a 90 day supply pharmacy, please contact Regence Pharmacy Services at (888) 437-1508. 3.10 Refill Too Soon. If the dosage instructions have changed, refill too soon edits can be overridden using a Prior Authorization/Medical Certification (PA/MC) code. The authorization code is 45645645641 with a PA/MC type of 2 (other override). Please use this code when the dosing instructions have changed and the prescription needs to be refilled earlier than expected. The claim will still deny for refill too soon if the Member has not yet used 75% of their previous fill following the new dosing directions. For a controlled substance, for Members of our Utah Plan, 80% of their previous fill must be used following the new dosing directions, before the medication can be refilled. 3.11 Long Term Care. LTC pharmacies will be able to bill using SCC 19, which will stop a dispense fee from being paid in situations where the LTC pharmacy has billed Part A (Hospital Stay) and needs to bill the balance to a Part D claim. Without it, Part D is incorrectly paying a dispense fee already covered under the Part A billing. 3.12 Long Term Care Overrides. Effective January 1, 2012 Long Term Care pharmacies must submit claims with a patient residence of 2, 3, 4, or 7; a place of service of 13, 31, 32, or 51; and a pharmacy type of 4 or 5 in order to receive LTC reimbursement. These codes will override the following standard benefit errors for claims filled through LTC facilities. You may also call Regence Pharmacy Services at (888) 437-1508 to request an override. a. Prior Authorization Required Non-Formulary b. Quantity Over Time c. Therapy Over Time d. Generic First Requirements 3.13 Long Term Care Short Cycle Dispensing. Effective January 1, 2013 Long Term Care Short Cycle Dispensing (SCD) will go into effect for Branded Solid Oral Dosage forms. LTC pharmacies must submit claims with appropriate pharmacy type; patient residence of 3; an appropriate Submission Clarification Code in order to receive LTC reimbursement. 3.14 Long Term Care Refill to Soon. If a patient is a new admit to a LTC facility and medications are denying for refill too soon, the pharmacy should enter appropriate patient residence, place of service, and pharmacy type codes along with a submission clarification code in their system to override the rejection. You may also call Regence Pharmacy Services at (888) 437-1508 to request an override. a. 03 Vacation Supply (up to a 14 day supply) 12

b. 05 Therapy Change c. 06 Starter Dose 3.15 Formulary Changes to Medicare Part D. The plan periodically makes changes to the Medicare formulary. Changes can be reviewed on our website at: http://www.regencerx.com/pharmacy/medicared.html. Changes to the Medicare formulary are also communicated to membership 60 days in advance of the change and are posted on the Medicare Part D public website for membership. 13

IV. MEDICARE PART D TERMS AND CONDITIONS 4.1 Terms for Network Participation. In order to render services to Medicare Members, Pharmacy must agree to the following terms. Pharmacy will implement and follow all applicable Medicare laws, regulations, and CMS instructions. Pharmacy will ensure that all of its first tier, downstream, and related entities (as defined in 42 CFR 423.501) implement and follow these federal laws or mandates, and that Pharmacy s first tier, downstream, and related entities agree in writing as outlined in Section 4.19 of the Participating Pharmacy Agreement. Pharmacy will implement and follow all RegenceRx Medicare policies and procedures related to Pharmacy s services to Medicare Members, and RegenceRx will make reasonable business efforts to provide Pharmacy with adequate notice of any changes to said policies and procedures. If federal law changes any of Pharmacy s obligations herein, RegenceRx will make reasonable business efforts to notify Pharmacy of those changes, but in no event does any lack of notice change the applicability of federal law. See 42 CFR 422.504(i)(4)(v); 42 CFR 423.505(i)(4)(iv). 4.1.1 CMS Documentation. CMS policies, forms, and other information on Part D coverage can be found at: www.cms.gov/prescriptiondrugcovcontra. 4.2 Confidentiality and Disclosure. Without limiting the obligation for confidentiality or nondisclosure owed by one party to the other in the Participating Pharmacy Agreement, Pharmacy agrees that the medical or personal information regarding an Medicare Member or other health and enrollment information about an Medicare Member will be protected from disclosure to any third party, except as otherwise allowed by law. Pharmacy will ensure that unauthorized individuals will not have access to Medicare Member medical records, or other health and enrollment information. Pharmacy will maintain the records and information in an accurate and timely manner and will ensure timely access by Medicare Members to the records and information that pertain to them. Pharmacy will abide by all Federal law and relevant state laws regarding confidentiality and disclosure of mental health records, medical records, other health information and Medicare Member information. With respect to information that identifies a particular Medicare Member, Pharmacy will have procedures that specify: (1) for what purposes the information is used by Pharmacy; and (2) to whom and for what purposes it will disclose the information to a third party. See 42 CFR 422.118; 42 CFR 423.126. 4.3 Contractual Obligations. Medicare Plans are responsible for adhering to and otherwise fully complying with all terms and conditions of their contracts with CMS. For services rendered pursuant to the Participating Pharmacy Agreement, Pharmacy s performance and the performance of any first tier, downstream, or related entity of Pharmacy, may be monitored by such Plans, RegenceRx or CMS on an on-going basis. Pharmacy will ensure that any service or other activity performed by Pharmacy or its first tier, downstream and related entities, shall be provided consistent with and comply with the terms of Section 4.19 of the Participating Pharmacy Agreement and the Medicare Plans contractual obligations to CMS. RegenceRx will make reasonable business efforts to notify Pharmacy of terms of the Medicare Plans contracts with CMS that are applicable to Pharmacy. See 42 CFR 422.504(i); 42 CFR 423.505(i). 4.4 Suspension of Services. The Medicare Plan, RegenceRx or CMS may suspend or revoke the professional or technical services, activities, reporting requirements or any other duties that Pharmacy has agreed to perform hereunder related to Medicare Members, if the Medicare Plan, RegenceRx or CMS determines that Pharmacy has not performed satisfactorily. See 42 CFR 422.504(i)(4)(ii); 42 CFR 423.505(i)(4)(ii). 14

4.5 Pharmacy Documentation. Pharmacy shall provide RegenceRx a copy of any documentation requested by RegenceRx to audit and/or monitor compliance with the provisions set forth in the Participating Pharmacy Agreement without charge. 4.6 Complete True and Accurate Data. CMS requires Medicare Plans to submit Pharmacy s claims data and other records to CMS, or a CMS contractor. Pharmacy will submit only complete, true and accurate data to RegenceRx. In the event CMS alleges or finds that claims data or other records submitted by Pharmacy are not complete, true or accurate, Pharmacy will indemnify and defend the Medicare Plan and RegenceRx with regard to any claim, demand, allegation, or legal action brought by CMS, or on behalf of CMS, against the Medicare Plan or RegenceRx, its officers, directors, agents or employees. See 42 CFR 422.504(l)(3); 42 CFR 423;505(k)(3). 4.7 Payment. RegenceRx shall follow the terms of the Participating Pharmacy Agreement related to prompt payment of claims, or otherwise follow applicable law; as such law may be amended from time to time. 4.8 Non-Payment and Timely Submissions. Pharmacy hereby agrees that in no event, including, but not limited to, non-payment by RegenceRx for any reason such as a determination that the services furnished were not Medically Necessary, RegenceRx's insolvency, Pharmacy s failure to submit claims within the time period specified herein, or breach of the Participating Pharmacy Agreement, will Pharmacy bill, charge, collect a deposit from, seek compensation, remuneration or reimbursement from, or have any recourse against Medicare Members or persons other than RegenceRx for Covered Services furnished pursuant to the Participating Pharmacy Agreement. Except as otherwise set forth in Section 4.19.6 of the Participating Pharmacy Agreement, nothing in this provision shall prohibit collection of applicable copayments, coinsurance or deductibles, or late charges thereon, billed in accordance with the terms of the Member Agreement; nor will it prohibit Pharmacy from collecting payments from Medicare Members for non-covered Services or services that were not Medically Necessary. This section shall survive the termination of the Participating Pharmacy Agreement regardless of the cause giving rise to the termination. See 42 CFR 422.504(i)(3)(i); 42 CFR 423.505(i)(3)(i). 4.9 Cost Sharing. If a Medicare Advantage Member is eligible for both Medicare and Medicaid benefits, Pharmacy shall not collect cost sharing for Medicare B services from such Medicare Member when the State under its Medicaid program is responsible for paying such cost sharing amounts. In such case, Pharmacy shall accept the amount paid by RegenceRx as payment in full for Covered Services or bill the appropriate State source for the cost sharing amount. See 42 CFR 422.504(g)(iii). 4.10 Excluded Individuals, Entities, and Debarred Contractors. Pharmacy acknowledges that neither Pharmacy nor any of its employees, contractors, board members, or any shareholders (interest 5% or more) that work directly or indirectly on any Federal healthcare program appear in the List of Excluded Individuals/Entities as published by the Department of Health and Human Services Office of the Inspector General, nor in the List of Debarred Contractors as published by the General Services Administration. The List of Excluded Individuals/Entities can be found at http://oig.hhs.gov/fraud/exclusions/exclusions_list.asp. The List of Debarred Contractors can be found at http://epls.arnet.gov/. 4.10.1 Pharmacy Notification of Individuals, Entities, and Debarred Contractors. Pharmacy must notify RegenceRx immediately if Pharmacy or any employee, contractor, board member or shareholder (interest of 5% or more) that work 15

directly or indirectly on any Federal healthcare program appears in the List of Excluded Individuals/Entities or the List of Debarred Contractors4.11.2 4.10.2 Pharmacy Review. Pharmacy agrees to review the List of Excluded Individual/Entities and the List of Debarred Contractors for all new employees, contractors, board members or shareholders (interest of 5% or more). Pharmacy also agrees to review the List of Excluded Individuals/Entities and the List of Debarred Contractors for all employees, contractors, board members and shareholders (interest of 5% or more) at least once a year. If an employee, contractor, board member or shareholder (interest of 5% or more) is on such lists, Pharmacy shall immediately remove the person or entity from any work related directly or indirectly to all Federal healthcare programs and will take appropriate corrective actions. Pharmacy will keep a record that such reviews have been completed in support of compliance with this section for inspection and review upon request during scheduled on-site audit or other review process. 4.11 Conflict of Interest Policy. Pharmacy agrees to comply with RegenceRx s conflict of interest policy or a conflict of interest policy developed by Pharmacy that meets CMS requirements as outlined in Section 50.2.1.2 of Chapter 9 of the Medicare Prescription Drug Coverage Manual. RegenceRx conflict of interest policy is a part of Regence s Code of Business Conduct and the Code of Business Conduct Guide, which can be found at http://www.regence.com/legal/ethics-and-compliance.jsp. Pharmacy will require its managers, officers and directors (as applicable) responsible for the administration or delivery of Medicare benefits to sign a conflict of interest certification at the time of hire and annually thereafter certifying that the managers, officers and directors are free from any conflict of interest in administering or delivering Medicare benefits. This certification should state (1) that the individual has reviewed RegenceRx or the Pharmacy s conflict of interest policy as applicable; (2) that the individual has disclosed any potential conflicts of interest in administering or delivering Medicare benefits; and (3) where a conflict of interest may exist, that the individual has obtained management approval to work despite any conflicts or has eliminated the conflict. Pharmacy will provide a copy of such conflict of interest certifications in support of compliance with this section for inspection and review upon request during a scheduled on-site audit or other review process. 4.12 Code of Business Conduct and the Code of Business Conduct Guide. Pharmacy agrees to comply with Regence s Code of Business Conduct and the Code of Business Conduct Guide (which includes Regence s disciplinary guidelines) or to adopt and comply with its own code of conduct and disciplinary guidelines that reflect a commitment to detecting, preventing and correcting non-compliance with Medicare requirements in the delivery of Medicare services, including detecting, preventing and correcting fraud, waste and abuse. RegenceRx may terminate the Participating Pharmacy Agreement for cause if Pharmacy fails to comply with Regence s Code of Business Conduct and the Code of Business Conduct Guide or its own code of conduct and disciplinary guidelines, as applicable. Regence Code of Business Conduct and Code of Business Conduct Guide can be found online at http://www.regence.com/legal/ethics-and-compliance.jsp. RegenceRx has the right to audit compliance with this provision. 4.13 Audit. Pharmacy agrees that the Medicare Plan, RegenceRx, HHS, the Comptroller General, or their designees, may inspect, evaluate and audit any pertinent contracts, books, documents, papers, facilities, services, and records of Pharmacy or any first tier, downstream, and related entity of Pharmacy that pertain to the services provided hereunder. The Medicare Plan, RegenceRx, HHS, the Comptroller General, or their designees right to inspect, evaluate, and audit extends through ten (10) years from the 16

final date of the contract period or completion of audit, whichever is later, unless there are special circumstances requiring Pharmacy to retain such documents for a longer period of time. See 42 CFR 422.504(i)(2); 42 CFR 423.505(i)(2). 4.14 Compliance Questions and Reporting of Non-Compliance. RegenceRx encourages Pharmacies to ask Medicare compliance questions and report potential and actual instances of non-compliance with Medicare requirements to RegenceRx through its anonymous hotline or through other means. To ask compliance questions and report potential and actual instances of non-compliance or to report possible Fraud, Waste and Abuse (FWA) please contact us via: Toll Free Hotline: (877) 4 RX-Tips (877-479-8477) Mail: External Audit RX PO Box 1271 M/S E12B Portland, OR 97207 4.15 Fraud, Waste, and Abuse Federal Laws. Federal funds are used, in whole or in part, to pay Pharmacy s claims. Pharmacy agrees to comply with -- (1) federal laws and regulations designed to prevent or ameliorate fraud, waste, and abuse, including, but not limited to, applicable provisions of federal criminal law, the False Claims Act (31 U.S.C. 3729 et seq.), and the anti-kickback statute (section 1128B(b) of the Social Security Act); and (2) HIPAA administrative simplification rules at 45 CFR parts 160, 162, and 164. 4.16 Reporting Medicare Fraud, Waste and Abuse. RegenceRx encourages Pharmacy to report potential and actual instances of Medicare fraud, waste and abuse to RegenceRx through its anonymous hotline or through other means. Details about how to report potential and actual instances of fraud, waste and abuse can be found online at http://www.regence.com/legal/you-can-fight-health-care-fraud.jsp. Federal law prohibits RegenceRx from retaliating against Pharmacy for reporting a fraud, waste and abuse issue. 4.17 Medicare Compliance Training. Pharmacy shall ensure that Pharmacy, its employees, board members, agents and contractors that provide administrative services or healthcare services for RegenceRx Medicare business pursuant to the Participating Pharmacy Agreement participate in the appropriate Medicare compliance training, fraud, waste and abuse training and other specialized training (as RegenceRx determines necessary) that meets CMS s requirements within (30) days of hire and annually thereafter. Pharmacy may request copy of Regence s Medicare compliance training, fraud, waste and abuse training or other specialized training by contacting: http://www.regencerx.com/pharmacy/medicared.html. Alternately, such training may be given by Pharmacy or obtained through a third party. Pharmacy shall keep a copy of such training materials if given by Pharmacy or third party (unless the third party restricts access to such material) and maintain proof that such training has been completed by Pharmacy, its employees, board members, agents and contractors. Upon request, Pharmacy shall provide RegenceRx a copy of such training material and proof that the training has been completed during a scheduled on-site audit or other review process. Pharmacies that have met the fraud, waste, and abuse certification requirements through enrollment into the Medicare program are deemed to have met the training and educational requirements for fraud, waste, and abuse and do not need to complete the fraud, waste, and abuse training requirements outlined in this section. 4.18 Information for Medicare Members. Pharmacy must post or distribute notices 17

instructing Medicare Members to contact their Plan to obtain a coverage determination or request an exception if they disagree with the information provided by the pharmacist as required by CMS (e.g., the Medicare Prescription Drug Coverage and Your Rights standardized pharmacy notice). See 42 CFR 423.562(a)(3). A copy of the notice can be found on the CMS website at: http://www.cms.gov/medprescriptdrugapplgriev/14_plannoticesanddocuments.asp# TopOfPage. 4.19 Pharmacy Member Notification of Lowest Priced Generic Equivalent. Pharmacy must inform Medicare Members of any differential between the price of the dispensed drug and the price of the lowest priced generic version of that drug that is therapeutically equivalent and bioequivalent and available at the Pharmacy, unless the particular drug being purchased is the lowest-priced therapeutically equivalent and bioequivalent version of that drug available at the Pharmacy. 4.19.1 Notice Requirements. Pharmacy must provide this notice at the point of sale or, in the case of dispensing by mail order, at the time of delivery of the drug. If and to the extent required by CMS, long-term care pharmacies must provide this notice by providing such information to RegenceRx for Plans inclusion in written explanation of benefits provided to Medicare Members. 4.19.2 I/T/U pharmacies and Long Term Care. To the extent required by CMS, the notice requirement in this section does not apply to I/T/U pharmacies, pharmacies located in any of the U.S. territories, and long-term care pharmacies. See 42 CFR 423.132(a), (b), (c). 4.20 Pharmacy Member Notification for Non-covered Medicare Part D Drugs. Beginning January 1, 2012, Part D plan network pharmacies will provide a written copy of the standardized pharmacy notice to enrollees (beneficiaries) when an enrollee s prescription cannot be filled under the Medicare Part D benefit and the rejection cannot be resolved at point of sale. See Revised CMS 10147 section 423.562(a)(3) and an associated regulatory provision at 423.128(b)(7)(iii). A copy of the standardized notice can be found on the CMS website at: http://www.cms.gov/medprescriptdrugapplgriev/14_plannoticesanddocuments.asp#t opofpage. 4.20.1 Medicare Part D Member Notice. The purpose of this notice is to provide enrollees with information about how to contact their Part D plans to request a coverage determination, including a request for an exception to the Part D plan s formulary. The notice reminds enrollees about certain rights and protections related to their Medicare prescription drug benefits, including the right to receive a written explanation from the drug plan about why a prescription drug is not covered. 4.20.2 Distributing Instructions. RegenceRx will arrange with its network pharmacies to distribute notices instructing enrollees to contact their plans to obtain a coverage determination or request an exception if they disagree with the information provided by the pharmacist 423.562(a)(3). 18