Identifying Potential Risks with New or Returning Pharmacy Providers
Every month, new pharmacies enter and bill your network. Quickly identifying this pharmacy activity is crucial for your plan to assess potential risks to the network. By conducting proactive reviews of new pharmacies, your plan can uncover potentially inappropriate pharmacy claims and providers. This enables you to take swift action, if necessary, to address any issues and protect the integrity of your network. Additionally, identifying new pharmacies allows you to request records at an early stage or implement ongoing monitoring of their claims traffic, providing a comprehensive strategy to mitigate risks effectively.
Along with identifying new pharmacies that are billing to your network, it is equally important to identify returning pharmacies. When a previously inactive pharmacy resumes billing your network, investigate the original reasons for their inactivity.
Below are a few important scenarios to consider for both new and returning pharmacies.
Was the pharmacy on review?
- Sometimes a pharmacy will be placed on prepayment review or under a watch, which will cause the pharmacy to reduce billing or stop billing completely. Once the period set by the plan is over, the pharmacy may continue to bill in a similar manner. Depending on how long the pharmacy was suspended from billing, they could be identified as a returning pharmacy.
- Conduct research to determine if the pharmacy received any disciplinary action from the Board of Pharmacy during inactivity.
Was there a recent change in ownership/management?
- An individual may purchase a pharmacy in good standing to start billing immediately.
- A new pharmacy manager may increase the number prescriptions billed by transferring prescriptions from their previous pharmacy, relationships with providers, etc.
What is the origin of the prescriptions?
- Is the pharmacy submitting claims for a lot of transferred prescriptions? A transferred prescription can usually be identified with an origin code of 5. If the pharmacy has a large volume of prescriptions with an origin code of 5, then select a few members to determine where the transfers are coming from. Consider reviewing the pharmacy that transferred the prescriptions and whether that provider has a history of billing issues or other concerns.
- If the prescriptions were transferred from a pharmacy recently terminated from your network, the new billing pharmacy may start billing similarly.
- A new owner/manager may transfer prescriptions from their previous pharmacy to increase their numbers.
What are the written dates submitted?
- If the prescriptions contain an origin code other than 5, compare the written dates to when the pharmacy opened. A red flag would be prescriptions with a written date prior to the pharmacy opening. This is especially true if there is an origin code of 2 (verbal prescription), which could indicate the pharmacy is running through invalid prescriptions.
Types of drugs
- Is there a variety of drugs or is the pharmacy filling only a limited number of brand name expensive drugs?
Patient history
- Is the patient receiving other medications at a different pharmacy and is this drug unrelated to their normal medication?
- Is the pharmacy located near where the member resides?
Prescribers
- Are the new or returning pharmacies submitting claims from prescribers with known issues?
Test claims
- Sometimes pharmacies will run test claims. These test claims are typically small in value and limited in number, serving as payment verification attempts.
Monitoring your network for new or returning providers allows you to identify problematic claims traffic, reduce exposure, select pharmacies for audit, and potentially terminate pharmacies from your network.
Fraud Scope’s dashboard and highlighted provider activity capabilities can assist your plan with identifying new or returning pharmacies as well as pharmacies billing NDC codes that did not appear in their prior claims’ history. This provides the user with identifiers for the new or returning providers, the number of claims at risk, paid exposure, and peer group. In addition to those details, the returning provider widget displays the period of inactivity, and the new code utilization widget displays the NDC codes.
Equip your SIU team with the most advanced tools for accurately identifying and flagging suspicious trends. Contact us today at info@codoxo.com to learn more.