OptumRx Auditing for Medical Supplies Billed Under Medicare Part D

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 Sponsors 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:

1. Generally, insulin used in a DURABLE pump is covered under Medicare Part B, unless patient does not meet coverage criteria. See PAAS Newsline article, Billing Insulin for a Pump is Tricky, Especially for Medicare Patients for more details.
2. Insulin used in a DISPOSABLE pump such as V-Go® or Omnipod®
3. 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 Manual. 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). See PAAS Newsline article, Why Would Anyone Audit Alcohol Swabs? For more details.

 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
  • See the PAAS tool, Considerations for Billing Insulin Vials: Medicare Part B vs Part D on the PAAS Member Portal under “Proactive Tips”