OptumRx Auditing for Medical Supplies Billed Under Medicare Part D

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OptumRx Auditing for Medical Supplies Billed Under Medicare Part D

Jen Clark • May 06, 2024

OPTUMRX should have categorized items as “Part B” instead

In March 2024, PAAS National^® analyst assisted nearly 100 pharmacies with desk audits from OptumRx requesting documentation related to claims for medical supplies (primarily alcohol swabs) that were processed by OptumRx under the Medicare Part D benefit. OptumRx asked pharmacies to provide copies of insulin prescriptions as well as the associated fill histories, signature logs and explanation of payment for these insulin prescriptions dispensed between July 2019 and June 2023.

Most pharmacies report dispensing no insulin to the patients in question and explained that the alcohol swabs were being used in conjunction with diabetes testing supplies (test strips, lancets) that were also billed to OptumRx. Since OptumRx covered the cost for diabetes testing supplies, it would suggest that patients were enrolled in a Medicare Advantage (MAPD) plan and OptumRx incorrectly categorized the alcohol swab claims as “Part D” when they should have categorized as “Part B”. The OptumRx audits seem to stem directly from a nationwide CMS audit of Plan Sponsors¹ initiated in December 2023. During this audit, CMS scrutinized Part D claims for medical supplies, such as alcohol swabs, in cases where patients lacked any claim history for insulin use.

The coverage of insulin and its related supplies may vary depending on the Medicare benefit type and the intended use of the item. Specifically, insulin vials and alcohol swabs could be eligible for coverage under either Medicare Part B or Part D.

Keep in mind that Medicare patients could have prescription and medical benefits that are separate or combined.

Separate: standalone medical benefit Fee-for-Service (FFS), also known as “Original Medicare” + stand-alone pharmacy benefit through a Part D Plan (PDP)
Combined: medical and pharmacy benefit under one roof (sometimes called Medicare Part C) through Medicare Advantage (MAPD) Plan

Here is a chart to help you identify the correct payer depending on the type of Medicare benefit and the item in question.

A few nuances to keep in mind:

Generally, insulin used in a DURABLE pump is covered under Medicare Part B, unless patient does not meet coverage criteria
Insulin used in a DISPOSABLE pump such as V-Go® or Omnipod®
Alcohol swabs are only covered under Part D when used for the injection of insulin according to Section 10.5 from Chapter 6 of the Medicare Prescription Drug Benefit Manual². Additionally, PBMs are likely to audit for high AWP alcohol swabs or when used in excess (i.e., if patient is to use both “before and after” injection).

PAAS Tips:

If you are unsure about a patient’s Medicare coverage (PDP vs MAPD), then ask to see a copy of their card and look for “MAPD” or “Medicare Advantage” wording, or call the patient help desk if needed
If a Medicare patient presents a prescription for insulin vials, clarify if self-administered or used in a pump

The instructions for use may make the route clear such that no clarifications are needed
The presence of insulin syringes on a patient’s profile may also provide context

By Trenton Thiede, PharmD, MBA, President at PAAS National^®, expert third party audit assistance, FWA/HIPAA and USP 800 compliance.

References:

1. https://granepbm.com/wp-content/uploads/2023/12/Medical_Supplies_Associated_with_the_Delivery_of_Insulin_Audit_Notification_Memo.pdf

2. https://www.cms.gov/medicare/coverage/prescription-drug-coverage-contracting/prescription-drug-benefit-manual