What Have We Learned about PBM Audits Recently?

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Pharmacy Benefit Manager (PBM) audits continue to plague pharmacies. There are more desk audits than ever before and plans are finding new ways to recoup payment on prescriptions.

For example, some plans now recover full payment on prescriptions that are not picked up within 14 days! Therefore, be sure to reverse prescriptions that are not picked up within 14 days and return them to stock until the patient needs them.

Insulin Pens

EnvisionRxOptions is a PBM that expects pharmacies to split boxes of insulin pens. If the prescriber writes for one box of pens and the dosage is 36 units per day, the pharmacy could dispense three pens (9mls) as a 25DS. This is the only PBM known to Pharmacy Audit Assistance Service (PAAS) National that requires pharmacies to break a box of insulin pens. Florida Medicaid also expects pharmacies to break the box of pens.

With other plans, a complete box of pens is acceptable as long as you don’t refill the prescription early. In other words, if a box of pens should last 50 days and you refill the medication with the patient’s monthly medications, you will be cited for early refills and have to pay back the entire cost of the box of pens. Plans typically expect pharmacies to wait at least until 75-80 percent of the medication is used – in this case 38-40 days minimum.

Other insulin issues occur with products such as Levemir® and Humulin®U-500. These products have a 42- and 40-day expiration date, respectively. If the plan maximum is a 30-day supply, then these items must be entered as a 30-day supply; however, pharmacies still need to be cautious with early refills by waiting until 75-80 percent of the medication is used before dispensing a refill.

Prescription Origin Codes

Another audit trap is prescription origin codes. Some plans take back the entire cost of goods sold for entering the wrong origin code, so it is very important to enter the correct code at the time of dispensing.

1 = Written

2 = Telephone

3 = Electronic

4 = Fax

5 = Pharmacy (Any reason to give a prescription a new number, such as reassigns, pharmacist prescribing by protocol or prescription transfers from another pharmacy.)

Also keep in mind that once a prescription origin code has been assigned, it retains that code for the life of the prescription. So if the prescriber is contacted on a written prescription and the pharmacist makes a clinical note on the hard copy to modify, clarify or change something, it still retains the code for 1 = Written.

Some plans attempt to take back the entire cost of the drug for the wrong origin code, while Humana takes back $5 for each time the drug was filled. For example, a prescription with 11 refills can add up to $60 in take backs, if it was filled 12 times.

Topical Creams and Ointments

Another issue with PBM audits is topical creams and ointments are more heavily scrutinized for quantity and days supply. Some plans now require the pharmacy to document where on the body the cream or ointment is being applied, so the plan can determine whether a small or large area is being affected while estimating a day-supply requirement for the Rx.

Controlled-Substance Prescriptions

Controlled substances are another area of focus for PBMs. Make sure you are aware of federal requirements, including 21 CFR 1306.05a:

§1306.05 Manner of issuance of prescriptions.

(a) All prescriptions for controlled substances shall be dated as of, and signed on, the day when issued and shall bear the full name and address of the patient, the drug name, strength, dosage form, quantity prescribed, directions for use, and the name, address and registration number of the practitioner.1

All controlled-substance prescriptions need to have the Drug Enforcement Administration (DEA) registration number of the practitioner ordering the prescription. If a nurse practitioner or physician’s assistant wrote the prescription, then it is their DEA registration number that must be on the hard copy unless your state law requires the supervising physician’s name and DEA registration number be on the prescription as well.

Special requirements exist for Suboxone® prescriptions to meet federal requirements by having both the regular DEA number on the Rx and the “X” DEA number also. If both DEA numbers are not on the prescription, auditors may recover payment on the prescription.

Dispense As Written (DAW) Codes Explained

0 = DAW not specified: Single-source brand and generic.

1 = Doctor requires brand name.

2 = Patient requests brand name. Write “DAW-2” on the face of the prescription.

8 = Generic temporarily not available in the marketplace. Attach a copy of the daily invoice showing you attempted to order the generic, and it was not available from any source.

9 = Formulary requires brand name (for some plans). Other plans may require a different DAW code. Follow the direction of the online adjudication to ensure you are using the correct code.

DAW codes other than these should only be used on a case-by-case basis and in conjunction with specific plan requirements.

Transferred Prescription Requirements

Humana and some auditors are pursuing pharmacies for incomplete transfer information. Make a mistake on a Humira® prescription with refills, and you could be out $10,000 or more! Follow your state laws for transfer requirements. In general, you need to have the following:

  • The words “Transfer Rx” on the hard copy
  • Name, address and phone number of transferring pharmacy
  • Original Rx number
  • Transferring out pharmacist’s name
  • Transferring in pharmacist’s name
  • Original date
  • Last fill date
  • Original number of refills
  • Refills remaining (best expressed as 1 + X refills remaining)

Consider using a transfer prescription pad for transfers, which will help you remember to fill in all of the blanks.

The audit crunch is going to continue. However, with knowledge and some basic preventative measures in place, you can save your pharmacy a lot of money.


1 Title 21 Code of Federal Regulations. U.S. Department of Justice Drug Enforcement Administration. March 2010. Web. 15 May 2017. https://www.deadiversion.usdoj.gov/21cfr/cfr/1306/1306_05.htm

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