Audit Tips: Areas of Focus on Recent CMS 1/3 Financial Audits – Part 2

The 1/3 Part D Financial Audits constantly change as CMS directs its auditors to focus on different areas of compliance risk for PACE organizations. In the last issue of Pharmastar News, we presented five areas on which auditors have been focusing attention. Here are a few more specific areas we have observed auditors verifying in CY 2018 and 2019 audits:

  • Participants receiving “hospice” drugs were enrolled in PACE on the date of service and not enrolled in the Medicare hospice benefit
  • Services received from the PACE sponsor or other related party are clearly itemized, and payments from PACE are documented in the general ledger
  • Process changes due to corrective action plans (CAPs) and observations from prior audits are internally audited and monitored to ensure that they continue to be effective; monitoring and auditing activities and any findings are recorded and on file, available to auditors
  • Verification of Direct and Indirect Remuneration (DIR) payments received: check/transaction number and date, amount received for each plan benefit package (pbp) or eligibility level (001, 002, 003) broken down by National Drug Code (NDC).

If you realize your plan is out of compliance or your policies and procedures are out of date in any of these areas, you should start working to correct the deficiencies as soon as possible. If your plan is selected for audit during the next round, it is good practice to disclose the areas of non-compliance you found and provide the status of your CAP. It is better to disclose this information and show the auditors that you are working to correct the deficiency than to let the auditors find the problem and create a finding on your audit report.


Dr. Rich Mueller joins Pharmastar as Vice-President, Clinical Strategy

Pharmastar recently welcomed Richard J. Mueller PharmD, MBA, MS, as Vice-President, Clinical Strategy. In this role, Dr. Mueller will work to ensure Pharmastar’s clinically-related products and services meet current and future prospective client needs. Additionally, Dr. Mueller is responsible for oversight of PBM clinical operations related to Pharmastar services, including identifying and executing opportunities to promote efficiencies as well as synergies between Pharmastar and CareVention HealthCare service lines.

Dr. Mueller joins Pharmastar from Community Care, Inc., in Milwaukee, Wisconsin, where he served as Director of Pharmacy Services. Community Care, Inc., has been a valued Pharmastar PACE client for more than 16 years. Dr. Mueller’s experience as a client will provide valuable insights that will enable Pharmastar to further improve the client experience.

Prior to Community Care, Inc., Dr. Mueller held several leadership roles including Consultant for Milliman, Inc.; Pharmacy Manager at Cesarz Infusion Therapy Service; Director of Pharmaceutical Services for Shawano Community Hospital; and Pharmacy Consultant, Merck Medco. Dr. Mueller holds a Doctor of Pharmacy degree from University of Wisconsin-Madison School of Pharmacy, a Master of Business from Cardinal Stritch University, and a Master of Science with a focus in Pharmacoeconomics from University of Florida College of Pharmacy.


Ask the Pharmacist

What is the best way to determine if a drug should be billed under Medicare Part B or Part D? Can Pharmastar assist with this process?

Pharmastar can definitely help with this process! In general, Medicare Part D covers most self-administered drugs like tablets, suspensions, self-injections, insulins, etc. Medicare Part B covers most drugs that would typically be administered in a hospital or clinic by a health care provider in addition to a couple of specific drug classes. Making appropriate Medicare Part B versus D determinations is important, and Pharmastar understands the intricacies involved. To streamline the process for our clients, Pharmastar provides a Medicare Part B vs. D report. We have identified specific drugs that may require a B vs. D determination, and we share a list of these drugs and the patients taking them with the plan sponsor. The plan sponsor views the list of drugs, answers a question that helps determine Part B vs Part D status, and then redacts PDEs for the drugs determined to be Part B. This is a retrospective way that Pharmastar assists plan sponsors with compliant billing practices.

Are there any continuous glucose monitors (CGMs) that are covered by Medicare Part D?

Currently no, CGMs covered by Part D. CGMs are considered durable medical equipment, so they are covered under Medicare Part B. Some of the most prescribed CGMs are Dexcom® and FreeStyle Libre®. Both of these offer continuous blood glucose readings for patients with diabetes. They differ in how they are used, and patients may prefer to use one CGM over another. For most plan sponsors, FreeStyle Libre® may be the more cost-effective option.

How can we ensure that the Medicare Part D drugs used to treat our participants meets CMS’s criteria for a medically accepted indication?

The Medicare Prescription Drug Benefit Manual (Chapter 6) defines medically accepted indications. Part D sponsors should ensure, to the best of their ability, that covered Part D drugs are being used for medically accepted indications, which include the drug’s FDA approved indication. To find a drug’s FDA approved indication, you can search the FDA’s website for the drug’s most current package insert. In addition to the FDA approved indication, other indications may be covered if they are supported in the following compendia: American Hospital Formulary Service Drug Information and DRUGDEX® Information System. Both compendia require a fee for access. To streamline this process for our clients, Pharmastar provides a monthly Medical Necessity Report. The report identifies drugs and drug classes that CMS has suggested could be targeted during audits for appropriate use. Additionally, the report generates a specific question to be answered by the plan’s clinical staff to help determine whether a medication is being used for a medically accepted indication. Pharmastar has access to the recognized compendia and continuously updates the drugs listed on the report.


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