H0504_12_394 11052012 S2468_12_394 11052012

1. 2012 Medicare Part D Compliance & FWA TrainingFor Blue Shield of California Contracted Network Pharmacies • H0504_12_394 11052012 • S2468_12_394 11052012

2. Welcome • Welcome to the 2012 Medicare Part D Compliance & FWA Training course! • This is Blue Shield of California’s 2012 Medicare Part D Compliance & FWA Training for contracted pharmacies. • At the end of this training, pharmacies will be asked to complete and submit an attestation for completing the training. • Medicare Part D Compliance Training for contracted pharmacies • Fraud, Waste & Abuse for contracted pharmacies • Attestation

3. Introduction to the Medicare Part D program

4. Part D overview • Part D (prescription drugs) is the biggest change in Medicare in 40 years. • The Medicare Modernization Act (MMA) of 2003 provided prescription drug coverage for Medicare beneficiaries.

5. Part D overview, continued • Part D is embodied in statute through the Code of Federal Regulations under Title 42, CFR 423 VOLUNTARY MEDICARE PRESCRIPTION DRUG BENEFIT • Part D is a voluntary benefit offered through health plans, qualified contractors, and some employers

6. Part D players Centers for Medicare & Medicaid ServicesGovernment agency that supervises the administration of Medicare benefits, including Part D CMS PBMs Plan Sponsors MEDICs IREs Pharmacy Benefit ManagersCompanies that manage pharmacy benefits, create formularies, process pharmacy claims, and negotiate discounts with drug manufacturers. (Some plan sponsors, like Blue Shield of California, may perform some or all of these functions rather than outsourcing to a PBM.) Plan SponsorsPharmaceutical chains, health insurance companies, and others that contract with CMS to deliver PDP plans (Prescription Drug Plan – Part D benefits only) and MAPD plans (Medicare Advantage Prescription Drug Plan – Part C & Part D benefits) Medicare Drug Integrity ContractorsAgencies contracted by CMS to investigate fraud, waste, and abuse in the Parts C & D programs, including compliance and enforcement work. Independent Review EntitiesAgencies contracted by CMS to review Plan denials of coverage decisions

7. First-Tier and downstream entities • Some plan functions may be delegated by a Plan Sponsor to a first-tier or downstream entity. • You are considered a first-tier entity, because we contract directly with you. • Even when plan functions are delegated to a first-tier or downstream entity, the Plan Sponsor is still responsible for meeting all CMS requirements and must establish oversight. • One of CMS’ requirements is that each Plan Sponsor (i.e. Medicare health plan) have a comprehensive compliance program.

8. What’s covered under Part D • Outpatient prescription drugs • Approved by the FDA • Used & sold in the United States • Used for a medically accepted indication • Vaccines & biologicals not covered by Part B • Insulin & medical supplies associated with the injection of insulin

9. What’s NOT covered under Part D • Benzodiazepines • Barbiturates • Drugs used for anorexia, weight loss, or weight gain • Drugs used to promote fertility • Drugs used for cosmetic purposes or hair growth • Drugs used for symptomatic relief of cough & colds • Prescription vitamins & minerals, except prenatal vitamins & fluoride preparation products • Over-the-counter drugs • Drugs for which the manufacturer requires that associated tests and monitoring services be purchased exclusively from the manufacturer or its designee • Drugs listed under Title XIX of the Social Security Act • Drugs currently covered under Part B • Drugs for erectile & sexual dysfunction • Beginning January 1, 2011, drugs from pharmaceutical manufacturers that did not sign a manufacturer discount agreement with CMS Note: Although benzodiazepines and barbiturates are not covered under Part D, BSC is covering these drugs as a supplemental benefit under Blue Shield of California’s enhanced plans.

10. 2012 standard benefit coverage design*Amounts will change for 2013

11. TrOOP = true out of pocket • The total amount of money spent by the beneficiary • Because the catastrophic level of coverage is dependent upon the TrOOP calculation, it is very important for plans to record TrOOP accurately. • Plans may offer an “enhanced” benefit to reduce or eliminate the deductible and/or beneficiary costs during the coverage gap. deductible + initial coverage + money spent in the coverage gap = TrOOP

12. The Medicare Coverage Gap Discount Program • Starting in January 2012, Medicare Part D members (excluding low income subsidy members) will get a 50% discount under the Medicare Coverage Gap Discount Program on “applicable” brand drugs and a 14% subsidy for generic drugs while in the coverage gap. • Over the next 10 years the goal of this program is to increase coverage of all covered drugs in the coverage gap to decrease what Medicare Part D members (excluding low income subsidy members) pay until it reaches 25% in 2020.

13. How should pharmacies prepare for the Medicare Coverage Gap Discount Program? • 1. Manage the Supply Chain: Pharmacies should work with Medicare Part D contractors to review the list of labeler codes on the CMS Web site to determine if their inventories have applicable drugs. This can be done by comparing inventory against CMS’s list of labeler codes that are covered by a signed agreement in 2012. The Medicare Coverage Gap Discount Program labeler code list can be used to identify which manufacturers’ applicable drugs will continue to be covered under Medicare Part D in 2012. • 2. Educate Staff: Pharmacy staff should be made aware of the Medicare Coverage Gap Discount Program and be prepared to answer patient inquiries about it. • To obtain more information regarding this program and specific claims go to www.Medicare.gov or call the applicable plan sponsor.

14. Member rights to coverage • Members under Part D are entitled to the benefit coverage offered by Blue Shield. As part of the entitlement process, members have specific rights to appeal coverage determinations. If a member disagrees with a plan’s coverage, the member should contact the health plan. Who can request a coverage determination? • A beneficiary or their authorized representative • A beneficiary’s prescribing physician or other authorized prescriber

15. Doing business with the government

16. Office of Inspector General (OIG) & General Services Administration (GSA) exclusion lists • CMS prohibits any employee, provider, contractor, or subcontractor that is listed in the General Services Administration (GSA) database of excluded individuals/entities or the Office of Inspector General’s (OIG) database of excluded individuals or entities from performing any activity related to Medicare Part D or other federal programs. • Human Resources, Procurement, Pharmacy, Credentialing, Corporate Compliance, Producer Services, and other contractors, and subcontractors must review the exclusion lists for all staff working with Medicare Part D ―upon employment and annually thereafter.

17. Exclusion list (cont’d) • You must notify Blue Shield of California immediately if an exclusion is identified. Excluded persons or entities are prohibited from receiving payment. • OIG: http://exclusions.oig.hhs.gov • GSA: http://sam.gov

18. Data accuracy • Never falsify certifications or attestations or any transmissions to CMS on Medicare enrollment data, disenrollment data, coordination of benefits status, or applicable true out-of-pocket costs. Any outliers in your oversight process should be included as footnotes in your pharmacy’s certifications or attestations. • All data used in calculation of your submissions is subject to audit and must be accurate. It must also be retained for ten years. • If you become aware of a systems issue that affects the accuracy of any data used in your pricing or submissions to the plan, report it to your pharmacy manager or one of your compliance resources.

19. Laws • Here are important laws you need to be aware of when working with Medicare Part D: The False Claims Act - Prohibits knowingly presenting (or causing to be presented) to the federal government a false or fraudulent claim for payment or approval. The Anti-Kickback Statute -Section 1128B(b) of the Social Security Act (42 U.S.C. 1320a-7b(b)) provides criminal penalties for individuals or entities that knowingly and willfully offer, pay, solicit, or receive remuneration in order to induce or reward business payable (or reimbursable) under the Medicare or other federal health care programs. The Health Insurance Portability and Accountability Act 75 - All member information under Part D must be done in compliance with HIPAA regulations and internal policies to manage and maintain adequate controls in use and handling of member data. Health Information Technology for Economic and Clinical Health Act Penalties -Penalties up to $1.5 Million for all violations of an identical provision

20. Prevent double billing • Ensure that the Part D Plans remain the primary payer • Ensure that benefits are coordinated so that TrOOP tracking of SPAPs is taken into account • Ensure that expenditures by other plans are excluded for the purposes of reaching the beneficiaries true out-of–pocket (TrOOP) expenditures Additional vulnerabilities • Coordination with State Pharmacy Assistance Programs (SPAPS) • National Council for Prescription Drug Programs (NCPDP) and National Association of Drug Diversion Investigators (NADDI)’s lists of susceptible pharmaceuticals • Drugs excluded From Part D coverage • Part B and Part D coverage issues • Inappropriate duplicate coverage between A, B, and D drugs (Home Infusion, Crossover Drugs, Differential Copays)

21. Medicare Part D fraud, waste, and abuse training

22. Prescription drug fraud, waste, and abuse cost the United States billions of dollars annually. By learning how to detect, correct and prevent Medicare Part D prescription drug fraud, waste, and abuse, you can save money for your pharmacy, Medicare, and your customers. The Centers for Medicare and Medicaid Services (CMS) requires that all individuals who work with Medicare Part D in any way receive training on identifying andcontrolling fraud, waste, and abuse. This training lesson is designed to help you become an active participant in the fight against Medicare Part D prescription drug fraud, waste, and abuse.

23. What is Blue Shield doing about it? • Elements of the updated Medicare Compliance Program include: • FWA Training • Procedures for reporting non-compliance with Medicare Program requirements & WA • Reviewing OIG and GSA exclusions lists • Internal Monitoring/ Auditing • Pharmacy Network Monitoring/Auditing • Special Investigations Department • In 1989, Blue Shield established the Special Investigations Department to centralize the company’s efforts to combat fraud. The department’s investigators work to detect and prevent medical fraud, and now partner with Pharmacy Services to includeprescription drug fraud. • Medicare Compliance Program • With the introduction of the Medicare Prescription Drug Benefit (Part D) in 2006, Blue Shield updated its existing Medicare Compliance Program to include Fraud, Waste, and Abuse (FWA) for Part D.

24. What can you do? • You can help to detect prescription drug fraud, waste, and abuse related to Medicare Part D plans by reporting suspicious incidents to Blue Shield. • To do so, you need to be able to recognize activities that may constitute Medicare Part D fraud, waste, or abuse committed by a pharmacy, provider, customer, subcontractor, or plan employees, and then report incidents as quickly as possible. • It’s the right thing to do!

25. What is prescription drug fraud? • Examples • Fraud • A person uses someone else’s insurance card to receive Medicare Part D benefits. This person intentionally posed as someone else and received Medicare Part D benefits they were not entitled to. • A provider intentionally prescribes drugs that are not medically necessary. • Not Fraud • A pharmacy bills for a full 30-day supply, fills only 15 days, but later revises the claim to 15 days. The intent to misrepresent is not present. • Definition • Fraud means that someone is trying to obtain something of value by intentionally deceiving, misrepresenting, or concealing. • Proof of fraud involves the following components: • An intentional misrepresentation, a lie, a false statement, an omission, or a concealment of the truth, related to a pharmacy prescription or claim, or • An individual or company receiving money or pharmacy prescription drug benefits.

26. Who commits fraud? Just about anybody could potentially commit prescription drug fraud: • Providers • Members • Pharmacies • Wholesalers • Pharmaceutical manufacturers • Medicare Part D sponsor employees On the next few slides you’ll see examples of fraud committed by each of the groups above.

27. Provider fraud examples • Providers could participate in Medicare Part D fraud that involve: • Prescribing drugs without reviewing a patient’s condition. • Prescribing drugs in exchange for payment, usually involving narcotics and physicians with “marks” on their licenses. • Writing a prescription for a higher quantity than appropriate to assist member with minimizing their copay.

28. Member fraud examples • Medicare Part D members may participate in fraud that involves: • Stealing a prescription pad and writing their own prescriptions. • Using someone else’s ID card to get Medicare Part D benefits. • Modifying a prescription to add more refills, increase quantities, etc.

29. Pharmacy fraud examples • Pharmacies could participate in fraud that involves: • Billing for the full amount prescribed but filling only a portion, and not crediting the difference back to the plan sponsor. • Billing for brand but dispensing generic, or for the wrong NDC code. • Manipulating calculations to keep beneficiaries in the coverage gap or to push beneficiaries into catastrophic coverage.

30. Wholesaler fraud examples • Wholesalers may participate in fraud that involves: • Selling counterfeit and adulterated drugs through black and gray market purchases, including fake, diluted, expired, and illegally imported drugs. • Illegally gaining control of discounted medicines intended for nursing homes, hospices, and AIDS clinics, marking up the prices, and selling to small wholesalers who sell to consumers (people who do this are referred to as “diverters”).

31. Pharmaceutical manufacturer fraud examples • Pharmaceutical manufacturers may participate in fraud that involves: • Offering inducements if the purchased products are reimbursable by any of the federal healthcare programs. • Promoting off-label drug usage illegally through marketing, financial incentives, or other promotion campaigns. • Using free samples illegally by knowingly providing them to physicians who will bill the federal health care programs for the samples.

32. Part D sponsor fraud examples • Medicare Part D sponsor employees could participate in fraud that involves: • Violating the Medicare marketing guidelines, such as offering beneficiaries a cash payment as an inducement to enroll in Part D. • Bait and switch pricing. • Payment for prescriptions written by dead or sanctioned physicians. • Misrepresenting or falsifying information furnished to CMS or to an individual under the Part D drug benefit program. • Altering or manipulating Part D claims data to avoid paying interest.

33. Red flags of Part D fraud • Now you know the two main components of prescription drug fraud and some examples, but how would you actually identify prescription drug fraud in your daily work in the pharmacy? • Let’s take a look at some“red flags” that would lead you to suspect prescription drug fraud may have occurred: • Multiple Pharmacies • Repetition and Excessive Billing • Large Pharmacy Claims/Excessive Billing • High-Prescribing Physicians • Medical Conditions Don’t Match or Don’t Exist We’ll explain each of these on the next few slides.

34. You see that a Medicare Part D recipient has used three or four pharmacies long distances from each other within a six-month period for the same prescription. This can be indicative of substance abuse or narcotics trafficking. Red flag: multiple pharmacies

35. Pharmacy bills a high volume of only one type or limited type of medication. This may be a case where pharmacy is billing for medication not being dispensed. You start to notice a pattern of the same claims for prescriptions being submitted on a weekly, monthly, or yearly basis, and you know that is inconsistent with how the drug is typically administered. Red flag: repetition and excessive billing

36. High-dollar claims are worth inspecting further. The bill is three or more times the usual and customary price contracted rate for a drug. Excessive numbers of refills for one patient or same family members, which may indicate pharmacy employee collusion. Red flag: large pharmacy claims

37. You notice that a physician is one of the highest prescribers, but he has relatively few patients. This may be a case where medications are used for illegal sale, especially with medications that have a high likelihood of being abused. Red flag: high-prescribing physicians

38. The prescribed medications are out of line with the medical history/claim history of the patient. For example, a pharmacy bills for a large number of antipsychotic medications, with no patient history of psychiatric illness. Red flag: medical conditions don’t match or exist

39. Difference between fraud and abuse • There is a fine line between fraud and abuse, based on whether there was intent to deceive. • abuse examples • Charging for Medicare Part D benefits when it should be Part B • Using multiple NDCs for a compounded drug and billing separately when only the highest NDC should be charged • Incorrectly billing for secondary payers that resulted in an increased reimbursement • Fraud involves intentional deception or misrepresentation intended to result in an unauthorized pharmacy benefit. • Abuse may be similar to fraud except that it may not be possible to establish that the abusive acts were done with an intent to deceive the insurer. Can you prove that the person knew they were committing a crime? If so, it’s fraud. If not, it’s probably abuse. In either case, you should report it.

40. What is waste? • A portion of Medicare Part D dollars are spent on waste. Waste and inefficiencies continue to increase, costing taxpayers more while providing beneficiaries with less. • Waste is described as: • “The extravagant, careless, or needless expenditure of funds, or the consumption of property that results from deficient practices, systems, controls, or decisions.” • Think about how you can help reduce waste in the administration of Part D benefits. • waste examples • Submitting a claim with an inflated ingredient cost for extra payment rather than the actual price of the drug • Consistently filling prescriptions for a 30-day supply (when a 15-day supply will suffice) • Drugs prescribedthat are not medically necessary • Making payment and other errors in the administration of Part D benefits

41. Why should I report? • The Centers for Medicare and Medicaid Services (CMS) requires you to report fraud. • By detecting and reporting fraud, waste, and abuse, you are doing the right thing.

42. What if I’m not sure? • In some cases you may want to do a little research to find an explanation for the unusual claim. But if you suspect that something is not right, report it. • If you are concerned that you could be wrong about suspecting Part D fraud, waste, or abuse, don’t be. Rest assured that Blue Shield of California’s Medicare Compliance, Pharmacy Services, and Special Investigations Department appreciate all tips and will work to screen the case and collect the evidence to determine if there is a reason to suspect fraud. • If you suspect, report • All tips are welcome

43. How to report • There are several ways to report Blue Shield of California Medicare Part D fraud, waste & abuse: • Form Access the Fraud Report Form Pharmacists and other people outside of Blue Shield of California: https://www.blueshieldca.com/bsca/about-blue-shield/fraud-prevention/report/home.sp • PhoneCall Blue Shield of California Anti-Fraud Hotline at 800-221-2367. • EmailSend an email to stopfraud@blueshieldca.com • Contact the Blue Shield of California Medicare Compliance Officer, Mark Andes. Telephone: 818-228-2655 or via email at mark.andes@blueshieldca.com • When you report a suspicious incident, you can identify yourself or you may remain anonymous. Part D-related calls and emails related to all suspected fraud, waste & abuse will be routed to the appropriate area for screening, then submitted to our Pharmacy Services and/or Special Investigations departments for further assessment.

44. What happens after I report? • Routing of Forms, Calls, and Emails • Prescription drug fraud forms and Medicare Part D fraud, waste, and abuse calls/emails are routed to Pharmacy Services and/or Special Investigations. • Compliance issues are routed to Medicare Compliance. • Assessment, Investigation,and Coordination with CMS • When Pharmacy Services and Special Investigations determine that an issue is a potential prescription drug fraud, Special Investigations follows their investigation process to follow up on fraud issues reported. • This process involves Special Investigations coordinating with Blue Shield of California’s Medicare Compliance department,CMS, MEDIC, and other law enforcement (as needed) for resolution. • You may report anonymously and retaliation is prohibited when you report a concern in good faith. MEDIC (Medicare Drug Integrity Contractor) is an organization that CMS has contracted with to manage CMS’ audit, oversight, and anti-fraud and abuse efforts related to the Part D benefit.

45. If you suspect any possible fraudulent, wasteful or abusive activity, please let us know right away! Call Blue Shield of California Anti-Fraud Hotline:800-221-2367 Submit form: https://www.blueshieldca.com/bsca/about-blue-shield/fraud-prevention/report/home.sp Email: StopFraud@blueshieldca.com Contact the Medicare Compliance Officer: Mark Andes 818-228-2645 Mark.Andes@blueshieldca.com Module I summary • We’ve covered a lot of information about Medicare Part D in this training module. • So what are the key points to remember? • It’s important for you to understand the basics of Medicare Part D, the standard benefit, and Blue Shield of California's requirements for offering Medicare Part D plans. • To do business with CMS we all have to follow the rules they’ve set regarding exclusion lists and data accuracy, as well as all applicable laws. As an entity processing and accepting payment for Medicare part D claims, your pharmacy and all staff are responsible to abide by all Federal and State requirements of this program. • Identifying and reporting prescription drug fraud, waste, and abuse is the right thing to do because it may reduce the money spent by the government, plans, and ultimately taxpayers due to fraudulent, wasteful, and abusive practices.

46. Module II • The second part of the training will review the following information. • Compliance Plan • Health Insurance Portability and Accountability Act (HIPAA) • Legal Actions • Conflict on Interest • Code of Business Conduct • Non-Retaliation • FWA Recap

47. What is a compliance plan? • A compliance plan is a series of internal controls and measures to ensure the plan sponsor follows applicable laws and regulations that govern Federal programs, like Medicare. • The adoption and implementation of a compliance program significantly reduces the risk of fraud, waste and abuse in the health care setting, while providing quality of services and care to patients. • Fraudulent behavior and non compliance will result in mandatory retraining and may result in disciplinary action, including possible termination when such behavior is serious or repeated or when knowledge of a possible violation is not reported. • Attendance and participation in compliance and FWA training programs is a condition of continued employment and a criterion to be included in employee evaluation • The Compliance plan should reference the policies related to contracting with the government, such as the laws addressing gifts and gratuities for Government employees. • Organizations contracting directly or indirectly with the federal government are obligated to: Report fraud, waste and abuse; • Demonstrate their commitment to eliminating fraud, waste and abuse; and • Implement internal policies and procedures to identify and combat health care fraud.

48. What is a compliance plan? (cont’d) • An effective Compliance Plan includes 7 core elements: • Written Standards of Conduct: Development and distribution of written Standards of Conduct and Policies and Procedures that promote our Plan Sponsors’ commitment to compliance and that address specific areas of potential fraud, waste and abuse. 2. Designation of a Compliance Officer: Designation of an individual and a committee charged with the responsibility and authority of operating and monitoring the compliance program. 3. Effective Compliance Training: Development and implementation of regular, effective education and training, such as this training. 4. Internal Monitoring and Auditing: Use of risk evaluation techniques and audits to monitor compliance and assist in the reduction of identified problem areas. 5. Disciplinary Mechanisms: Policies to consistently enforce standards and address dealing with individuals or entities that are excluded from participating in CMS programs

49. What is a compliance plan? (cont’d) • 6. Effective Lines of Communication: Between the compliance officer and the organization’s employees, managers and directors and members of the compliance committee, as well as first tier, downstream and related entities. • Includes a system to receive, record and respond to compliance questions, or reports of potential or actual non-compliance, while maintaining confidentiality • First tier, downstream, and related entities must report compliance concerns and suspected or actual misconduct 7. Procedures for Responding to Detected Offenses and Corrective Action: Policies to respond to and initiate corrective action to prevent similar offenses including a timely, reasonable inquiry.

50. Health Insurance Portability and Accountability Act (HIPAA) • Among other things, HIPAA, was enacted to improve the efficiency and effectiveness of health information systems through the establishment of standards and requirements for the electronic transmission of certain health information. • Regulations include standards for certain electronic transactions, minimum security requirements, and minimum privacy protections for individually identifiable health information covered entities (i.e., protected health information). • HIPAA includes a provision that established the Medicare Integrity Program (MIP) • The goal of the MIP is to pay it right -pay the right amount, to the right provider or supplier, for the right service, to the right beneficiary. • The CMS staff, Fiscal Intermediaries, and carriers work within a wide range of Medicare programs to improve payment accuracy. - These programs include cost report auditing, the Medicare Secondary Payment (MSP) provisions, Medical Review (MR), and anti-fraud activities to improve payment accuracy.