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Worry-Free Medicare Audits


Increased Medicare audits are raising the stakes for compliance in today’s pharmacies, with stricter enforcement than ever before. In fact, the likelihood of receiving a Part B audit request continues to climb amid national efforts to control fraud, waste and abuse.

In our first discussion of Medicare audits, we addressed three ways to improve your pharmacy’s outlook, and forward-thinking pharmacists are actively seeking the best infrastructures and workflows to address this readiness. For many, the best strategy starts with a front-end process improvement plan that lays the groundwork for a clean audit—and ultimately improves the outcomes potential for future requests.

While it may seem obvious, many resource-strapped pharmacies can be intimidated by the complexities associated with the Medicare Part B landscape. Strategic time and resource management is essential for front-end compliance. As such, pharmacies are increasingly leveraging partners to enable accurate and efficient documentation processes and achieve a worry-free audit.

Front-End Processes: Understanding the Impact

Pharmacies need to accurately complete the following documentation during front-end processes in order to maintain Medicare compliance:

Detailed written order or prescription

Incoming physician orders and prescriptions require documentation of the start date, item description, dated physician signature, dosage, route of administration, frequency of use, dispense quantity and number of refills. If any of these items are missing, pharmacies must reach back out to a physician before sending a claim to Medicare to be compliant.

Pharmacies often fall out of compliance when claims are billed to Medicare with only a dispensing, verbal or transfer prescription order. Physician signatures—often illegible—can also be problematic, and lack of substantiating evidence proving that a signature belongs to a particular physician can result in non-compliance.

Proof of delivery/pickup slip

Pharmacies are required to prove a patient received intended medications. When prescriptions are picked up, for example, correct documentation must include: the beneficiary’s name and signature, date of receipt, address and quantity. Shipped medications must have additional documentation including: a sufficiently-detailed item description, an identification number linking pharmacy documents with delivery service documents (e.g. a package or invoice number) and evidence of delivery.

Pharmacies can also be out of compliance for Medicare claims if the dispensing date of the medication does not match the pick-up date, or if a patient fails to sign their prescription pick-up slip.

Refill request

Documentation of refill requests must be complete with each of the following elements in order to be considered compliant and include the following: the beneficiary name or authorized representative, item description, date of request, quantity of previous prescription still in a patient’s possession (consumable medications) and an assessment of functionality or dysfunction (non-consumable items).

A Better Front-End Strategy

Leveraging a strong partner is a simple step pharmacies can take to improve front-end Medicare compliance. Leveraging solutions that automate the capture and management of necessary information can help minimize draws on internal resources and flag issues, like illegible signatures or incomplete documentation.

Today’s pharmacies are likely to see increased audit activity. Having the right systems in place to ensure all necessary elements are present for a clean, compliant audit goes a long way towards placing pharmacies in a favorable light with Medicare.

Deborah Roberts is Change Healthcare’s Manager Recovery and Audit, CMS Compliance. 

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