Self-Audit Series #13: Diabetic Test Strips

Purchasing Requirements

• PBM contracts require that pharmacies purchase test strips from vendors that are licensed distributors in your state
• OptumRx® requires purchases from suppliers that have received NABP’s Drug Distributor Accreditation (DDA) (formerly known as “VAWD® Accreditation”)
• Caremark® and Express Scripts® also require test strips to be purchased directly from the manufacturer or from authorized distributors only.
• Consider purchasing test strips from one approved wholesaler to make things easier
• Major test strip manufacturer’s have lists of “authorized distributers” on their websites
• Beware of secondary wholesalers which are subsidiaries of authorized distributors who may not show up on the authorized list (e.g., River City and Masters)

Billing

• Make sure that prescriptions have calculable instructions – use as directed is not accepted upon an audit
• Confirm that you are billing the correct NDC – many test strips have a “retail” version and a “Medicare/Medicaid only” version
• Verify the NDC billed is for the correct package size – do not bill the #100 count NDC if you are dispensing the #50 count box
• Dispense only one NDC per claim – you should not dispense 1 x #100 count and 1 x #50 count to equal #150 test strips
• Dispense the package size that is closest to the total quantity – if the prescription is for #200, dispense 2 x #100 count, not 4 x #50 count; some plans prohibit dispensing smaller packages
• Submit the accurate days’ supply based on the quantity and instructions
• If you are billing DMEPOS for Medicare beneficiaries, make sure that you submit the correct modifier to indicate if the patient is using insulin (KX) or not using insulin (KS)
• Some payers may require a diagnosis code at the time of billing to support the clinical need

Additional Newsline Article References for Self-Audit

• If you are delivering or mailing test strips to Medicare beneficiaries under the DMEPOS benefit, you must have a complete Proof of Refill Request and Proof of Delivery as per June 2021 Newsline, DMEPOS Proof of Delivery and Refill Request Requirements
• February 2020 – Self-Audit Series #13: Diabetic Test Strips
• March 2020 – Self-Audit Series #14: DMEPOS Items
• April 2021 – Are You Overbilling on Test Strips?
• July 2021 – LifeScan Hires Law Firm to Pursue Pharmacies Purchasing from Unauthorized Distributers
• January 2022 – Common Claim Denials for Medicare Part B