Are You Prepared for an OTC COVID-19 Test Audit?

Billing and dispensing OTC COVID-19 tests is widespread throughout community pharmacies. PAAS National® wants to make sure pharmacies are prepared to provide the correct documentation in case of an audit. To date, PAAS has seen:

  • Desk/invoice audits from Caremark, MedImpact and Prime Therapeutics,
  • Regular desk audits from Humana

While the dollar amount of these claims does not seem audit worthy, PBMs are checking for Fraud, Waste and Abuse and contract violations. The PBMs have been known to reach out to the member to verify quantity, manufacturer, and proof of receiving the test kits from the pharmacy.

PAAS has created a COVID-19 Resources section for our members on the PAAS Member Portal. Here you can find the Medicare and Commercially-Insured Patient Request and Attestation for OTC COVID-19 Test Billing and Frequently Asked Questions . These documents have been created for our members to help answer questions and ease the documentation burden so pharmacies can save time and be audit ready.

What documentation to have in case of an audit:

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  1. Prescription – While a prescription to bill an OTC COVID-19 Test Kit is not required per the PREP Act, one of the following should be provided as a “placeholder prescription”:
    • A backtag (which preferably has patent demographics, manufacturer of test, quantity, SIG, date, and dispensing pharmacist) with documentation “per PREP Act”
    • A copy of a protocol with a backtag attached
    • A copy of our patient request and attestation (pharmacy claim info on bottom of form may serve as a “placeholder prescription” with a backtag attached)
  2. Proof of Patient/Caregiver Request
    • Medicare and Commercially Insured Patient Request Attestation for OTC COVID-19 Test Billing is available on the PAAS Member Portal. Medicare states, “pharmacies must keep good documentation of the patient’s request for the tests and failure to provide such documentation could result in claim reversal and additional administrative actions”. PAAS recommends obtaining this request for all PBMs.
    • By signing the attestation, the patient is attesting
      • The tests are for personal use for indicated patient(s) on the form,
      • The tests are not for employer or travel purposes
      • The tests are not for children < 2 years old
      • The patient will not resell the tests provided under their benefit
      • The cost of the tests is not being covered by any other source
      • The patient has not requested OTC COVID-19 tests from any other provider in the current calendar month
  1. Proof of Dispensing
    • Provide a valid signature/delivery log showing the patient received the tests

PAAS Tips:

  • Only tests that have been authorized by the FDA should be billed and dispensed. You can find a list of authorized tests here
  • See the CMS website for further guidance on billing Medicare for OTC COVID-19 tests
  • Be sure you are ordering OTC COVID-19 tests from a reputable wholesaler, see our January 2022 Newsline article, Self-Audit Series #12:Invoice Audits
  • The claim submitted to the PBM must match the NDC/UPC of the product dispensed
  • Package size must be divisible by the quantity being dispensed
Jennifer Ottman, CPhT
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