Pharmacy Services - In
INDIANA HEALTH COVERAGE PROGRAMSPROVIDER REFERENCE MODULEPharmacy ServicesNote:This module is intended as a policy and procedure reference for theIndiana Health Coverage Programs (IHCP) fee-for-service (FFS)pharmacy benefit only. For information pertaining to managed carepharmacy benefits – including those covered under the HealthyIndiana Plan (HIP), Hoosier Care Connect, or Hoosier Healthwiseprograms – see the links for the IHCP-contracted managed careentities (MCEs), available on the Pharmacy Services page atin.gov/medicaid/providers.For updates to information in this module, see IHCP Banner Pagesand Bulletins at in.gov/medicaid/providers.LIBRARY REFERENCE NUMBER PROMOD00042PUBLISHED: AUGUST 27, 2020POLICIES AND PROCEDURES AS OF JULY 1, 2020VERSION: 5.0 Copyright 2020 DXC Technology Company. All rights reserved.
Revision HistoryVersion1.0DatePolicies and procedures as ofOctober 1, 2015Reason for RevisionsCompleted ByNew documentFSSA, OptumRx,and HPEScheduled updateFSSA, OptumRx,and HPECoreMMIS updateFSSA, OptumRx,and HPEScheduled updateFSSA, OptumRx,and DXCScheduled updateFSSA, OptumRx,and DXCScheduled updateFSSA, OptumRx,and DXCScheduled update Edited text as needed for clarity Updated FSSA secretary’s lastname in addresses Updated OptumRx IndianaMedicaid website references Changed CMCS references toDXC Changed PDSL references from“Diabetic” to “Diabetes” Updated pharmacy auditdepartment telephone number Updated DXC PA telephonenumber in the Drugs and DrugRelated Medical Supplies Billedon a Professional Claim section Added a note regardingrequirements for a phoned-inprescription in the Dispense-asWritten Codes section Updated the Drugs Carved Outof Managed Care sectionFSSA, OptumRx,and DXCPublished: February 25, 20161.1Policies and procedures as ofApril 1, 2016Published: June 23, 20161.2Policies and procedures as ofApril 1, 2016(CoreMMIS updates as ofFebruary 13, 2017)Published: February 13, 20172.0Policies and procedures as ofApril 1, 2017Published: July 13, 20173.0Policies and procedures as ofFebruary 1, 2018Published: June 19, 20184.0Policies and procedures as ofMarch 1, 2019Published: August 20, 20195.0Policies and procedures as ofJuly 1, 2020Published: August 27, 2020Library Reference Number: PROMOD00042Published: August 27, 2020Policies and procedures as of July 1, 2020Version: 5.0iii
Pharmacy ServicesVersionDate ivReason for RevisionsAdded information about dayssupply and product shelf life inthe Storage and HandlingRequirements sectionUpdated the Medical Supplies(Including Preferred DiabetesSupplies) and Durable andHome Medical Equipmentsection and subsectionsProvided clarification regardingcopayments in the PharmacyCopayment sectionAdded the Family PlanningEligibility Program sectionUpdated the Coverage of DrugProducts for Treating TobaccoDependence sectionUpdated Table 6 – Exclusions to 5,000 LimitAdded the Claim ReimbursementAdjustments sectionIncluded information aboutMedicare Part B crossoverclaims in the Claim Processingfor Dually Eligible (Medicareand Medicaid) Members sectionUpdated the InvoiceReconciliation Audits sectionAdded Notice of FinalDetermination as requireddocumentation in the Processand Requirements for AppealingPharmacy Audit DeterminationssectionIncluded signed and datedsignature log and/or proof ofdelivery as requireddocumentation for retailpharmacies in the RequiredPharmacy DocumentationsectionUpdated the Proof of DeliverysectionCompleted ByLibrary Reference Number: PROMOD00042Published: August 27, 2020Policies and procedures as of July 1, 2020Version: 5.0
Table of ContentsSection 1: Introduction . 1Pharmacy Benefit Managers . 1Managed Care Pharmacy Benefit Managers . 1Fee-for-Service Pharmacy Benefit Manager . 1Additional Pharmacy-Related Services and Contact Information . 3IHCP General Provider Services. 3Drugs and Drug-Related Medical Supplies Billed on a Professional Claim . 4Right Choices Program . 4Websites . 4Section 2: Pharmacy Coverage and Reimbursement . 5Legend Drug Coverage . 5Medically Accepted Indication . 6Federal Rebate Program . 6Federal Drug Efficacy Study and Implementation Program . 6Mandatory Generic Substitution and Brand Medically Necessary . 7Dispense-as-Written Codes . 7Brand Medically Necessary . 7Tamper-Resistant Prescriptions . 8Legend and Nonlegend Product Reimbursement . 9State Maximum Allowable Cost Program . 10Usual and Customary Charge . 10Professional Dispensing Fee . 10Vaccination Administration Fee . 11Blood Factor Reimbursement . 11Drugs Carved Out of Managed Care . 12Storage and Handling Requirements . 12OTC Drug Formulary and Pharmacy Supplements Formulary . 13Active Pharmaceutical Ingredients. 13Medical Supplies (Including Preferred Diabetes Supplies) and Durable and Home MedicalEquipment . 13Preferred Diabetes Supply List – Blood Glucose Monitors and Test Strips . 14Diabetes Supplies and Holding Chambers for Inhaled Medication . 15Pharmacy Copayment . 15Emergency Services Only: Package E . 16Family Planning Eligibility Program . 16Pharmacy Services Provided Prior to Indiana Medicaid Eligibility Determination . 17Coverage of Drug Products for Treating Tobacco Dependence . 17Pharmacy Reimbursement of Methadone . 17Compounded Prescription Claims Equal to or Greater Than 500 . 18Pharmacy Claims Equal to or Greater Than 5,000 . 18Pharmacy Claims Equal to or Greater Than 10,000 . 19Section 3: Pharmacy Billing Policy and Procedures . 21Methods of Submitting IHCP Drug Claims . 21POS Transaction . 21Paper Pharmacy Claim Forms. 21Professional Billing – Paper and Electronic Claims . 22Timely Filing Limit for Claim Submissions . 22Claim Reimbursement Adjustments. 22Mandatory Reversal of Paid Claims for Unclaimed “Return-to-Stock” Prescriptions . 22General Billing Information . 22Library Reference Number: PROMOD00042Published: August 27, 2020Policies and procedures as of July 1, 2020Version: 5.0v
Pharmacy ServicesPharmacy Drug File – Medi-Span . 22Place of Service Code Required for Pharmacy Claims . 23Billing Units . 23Common Billing Errors. 23National Drug Codes Configuration . 24Patient Residence Code. 24Patient Gender Code and Pregnancy Indicator . 25National Provider Identifier . 25Third-Party Liability, Coordination of Benefits, and Cost Avoidance . 26Billing Procedures for Specific Services and Programs . 29Billing Procedures for Compounds and Drug Products Requiring Reconstitution . 29Billing Procedures for Enteral Nutrition Therapy . 30IHCP Policy and Billing Requirements for the 340B Program . 30Billing Procedures for Emergency Services Only: Package E . 30Electronic Funds Transfer Payments. 31Section 4: Medicare Prescription Drug Coverage . 33IHCP Drug Coverage for Dually Eligible (Medicare and Medicaid) Members . 33Claim Processing for Dually Eligible (Medicare and Medicaid) Members . 33Section 5: Medicaid-Certified Long-Term Care Facilities . 35Medical and Nonmedical Supplies and Equipment . 35Unit Dose Packaging . 35Returned Medications . 35Section 6: Drug Utilization Review Processes . 37Prospective Drug Utilization Review . 37Patient Counseling Standards. 38Patient Record Maintenance . 38Pro-DUR Therapeutic Screening . 39Retrospective Drug Utilization Review . 41Section 7: Pharmacy Audit . 43Types of Pharmacy Audits . 43Real-Time/Telephone Audits . 43Self-Audits . 43Desk Audits. 43Invoice Reconciliation Audits . 44Onsite Audits . 44Process and Requirements for Appealing Pharmacy Audit Determinations . 44Requirements for Prescriptions and Drug Orders . 45Tamper-Resistant Prescription Pads (TRPPs) . 45Required Pharmacy Documentation . 45Proof of Delivery . 46Corrected Claims . 47Reporting of Suspected Fraud/Abuse . 47Section 8: Preferred Drug List and Prior Authorization Requirements . 49Preferred Drug List . 49Prior Authorization Requirements . 49Automated Pharmacy Prior Authorization (“SilentAuth”) . 50Pro-DUR Edits Requiring Prior Authorization . 50Early Refill Prior Authorization for Legend Drugs . 50Early Refill Prior Authorization for Drugs on the OTC Drug Formulary Dependent onAllowed Amount . 50Emergency Supply . 51Days Supply – Maintenance and Nonmaintenance Medications . 51Mental Health Medications and Mental Health Quality Advisory Committee . 52viLibrary Reference Number: PROMOD00042Published: August 27, 2020Policies and procedures as of July 1, 2020Version: 5.0
Pharmacy ServicesMental Health Drug Utilization Edits . 52Administrative Review and Appeal Process for Prior Authorization Denial . 53Library Reference Number: PROMOD00042Published: August 27, 2020Policies and procedures as of July 1, 2020Version: 5.0vii
Section 1: IntroductionThe Indiana Health Coverage Programs (IHCP) is administered by the Indiana Family and Social ServicesAdministration (FSSA), with policy and operational oversight provided through the FSSA Office ofMedicaid Policy and Planning (OMPP). This document provides relevant information about the IHCPpharmacy benefit.Updates to this document are issued periodically. In the interim, providers should read and retain thebulletins and banner pages published by the IHCP. Current and archived copies of these publicationsare accessible from the News, Bulletins, and Banner Pages page at in.gov/medicaid/providers. Thesepublications advise providers of program changes that occur between published updates to thisdocument.The IHCP pharmacy benefit is a dynamic program and, as such, this document does not contain allapplicable information. A significant amount of program information is available and maintained in anup-to-date format at the websites listed on the Pharmacy Services page at in.gov/medicaid/providers.All payments made to providers are subject to audit and recoupment based on requirements listed in thismodule.Pharmacy Benefit ManagersThe FSSA contracts with other entities to serve as pharmacy benefit managers (PBMs) for IHCP members: PBMs contracted with each of the four managed care entities (MCEs) serving Healthy Indiana Plan(HIP), Hoosier Care Connect, and Hoosier Healthwise members manage pharmacy benefits andprocess pharmacy claims for IHCP managed care programs. OptumRx serves as the PBM and pharmacy claim processor for IHCP fee-for-service (FFS) programs.Pharmacy providers can verify whether a member’s coverage is FFS or managed care and obtainMCE assignment information through the Eligibility Verification System (EVS) options: IHCP Provider Healthcare Portal, accessible from the home page at in.gov/medicaid/providers Interactive Voice Response (IVR) system at 1-800-457-4584 270/271 electronic transactionsThe PBM information may also be listed on the member’s ID card. For more information on IHCPprograms, see the Member Eligibility and Benefit Coverage module.Managed Care Pharmacy Benefit ManagersPharmacy providers can contact the IHCP member’s MCE (or its associated PBM) for questions aboutpharmacy services covered under the managed care pharmacy benefit. See the IHCP Quick Reference Guideat in.gov/medicaid/providers for contact information. Links to the PBMs for managed care programs can befound on the Pharmacy Services page at in.gov/medicaid/providers.Fee-for-Service Pharmacy Benefit ManagerAs PBM for the fee-for-service pharmacy benefit, OptumRx has the following responsibilities: Prior authorization (PA) and related clinical call center operations Preferred Drug List (PDL) development and maintenanceLibrary Reference Number: PROMOD00042Published: August 27, 2020Policies and procedures as of July 1, 2020Version: 5.01
Pharmacy ServicesSection 1: Introduction Over-the-Counter (OTC) Drug Formulary and Pharmacy Supplements Formulary maintenance Drug Utilization Review (DUR) Board and Therapeutics Committee and Mental Health QualityAdvisory Committee (MHQAC) support functions Federal and State supplemental drug rebate program administration (see Federal Rebate Program inSection 2) Required federal and State reporting Stakeholder communications Retrospective Drug Utilization Review (retro-DUR) Adjudication of and payment for pharmacy claims Pharmacy benefit systems support Pharmacy-related provider and member assistance functions Administration and maintenance of the Indiana Medicaid Maximum Allowable Cost (State MAC)program, including development of State MAC rates (see State Maximum Allowable Cost Programin Section 2) Development and maintenance of OTC Drug Formulary and Pharmacy Supplements FormularyState MAC rates Audits, including real-time audits, self audits, desk audits, invoice audits, and onsite auditsSee Table 1 for FFS pharmacy-related contact information. OptumRx hosts technical and clinical helpdesks via a call center (referred to as the OptumRx Clinical and Technical Help Desk). The OptumRxClinical and Technical Help Desk is open 24 hours a day, 7 days a week and can be contacted toll-free at1-855-577-6317. All pharmacy and member calls directly related to FFS pharmacy claim processing orpharmacy-related inquiries, including clinical inquiries or requests for FFS pharmacy prior authorization,should be directed to OptumRx. Calls related to provider enrollment, physician-administered drugs, theIHCP Provider Healthcare Portal (Portal), and all other nonpharmacy calls are handled by DXCTechnology, which can be contacted toll-free at 1-800-457-4584.Table 1 – Fee-for-Service Pharmacy Benefit Contact InformationContact Information2Reason for ContactOptumRx Clinical and Technical Help Desk:Telephone: 1-855-577-6317Fax: 1-855-678-6976PA Fax: 1-855-577-6384All pharmacy and member calls directly relatedto FFS pharmacy prior authorization or claimprocessing, including clinical inquiries andrequests for pharmacy PAState of IndianaOptumRx Pharmacy Audit Department150 W. Market Street, Suite 300Indianapolis, IN 46204Telephone: (317) 610-5228Fax: 1-866-926-0168Email: Rxaudit.INM@Optum.comPharmacy audit documentation and questionsregarding the pharmacy audit process, includingdocumentation requirementsMS07Audie GilmerSecretary Jennifer Sullivan, MD, MPHIndiana Family and Social Services AdministrationOffice of Medicaid Policy and Planning, Pharmacy Unit402 W. Washington St., Room W374Indianapolis, IN 46204Appeals of pharmacy auditLibrary Reference Number: PROMOD00042Published: August 27, 2020Policies and procedures as of July 1, 2020Version: 5.0
Section 1: IntroductionPharmacy ServicesContact InformationReason for ContactOptumRx – PAP.O. Box 44085Indianapolis, IN 46244-0085Administrative review requests related topharmacy prior authorization determinationsOptumRx – Manual Claim ProcessingP.O. Box 29044Hot Springs, AR 71903Paper claims (including paper replacementclaims)OptumRx electronic funds transfer (EFT)Fax: 1-866-244-8543For submitting the completed Electronic FundsTransfer (EFT) Request FormProvider Refund Lock Boxes:The following should be sent to either of theProvider Refund lock boxes: Refunds Payments OverpaymentsFirst Class Mail:OptumRx Claims26594 Network PlaceChicago, IL 60673-1265Courier Mail:OptumRx Claims LBX 26594JP Morgan Chase131 South Dearborn – 6th floorChicago, IL 60603OptumRx – MAC Rate Review RequestsP.O. Box 44085Indianapolis, IN 46244-0085All State MAC documentation and inquiries,including State MAC rate review requestsOptumRx MAC Provider Relations:Telephone: 1-800-880-1188Fax: 1-877-293-1845Email: MAC@Optum.comOptumRx Indiana Drug Rebate Operations5775 Peachtree-Dunwoody Rd., Suite C-600Atlanta, GA 30342Email: indiana.rebates@Optum.comQuestions and correspondence related to theIndiana Drug Rebate ProgramAdditional Pharmacy-Related Services and ContactInformationThe following sections discuss IHCP pharmacy-related functions that are not handled by the PBM.IHCP General Provider ServicesDXC Technology serves as the fiscal agent for the IHCP. Pharmacy providers can call 1-800-457-4584 forassistance related to the following areas of responsibility: Member eligibility data source Primary third-party liability (TPL) data source Provider enrollment functions Provider communicationsLibrary Reference Number: PROMOD00042Published: August 27, 2020Policies and procedures as of July 1, 2020Version: 5.03
Pharmacy ServicesSection 1: IntroductionDrugs and Drug-Related Medical Supplies Billed on aProfessional ClaimTo request prior authorization for drugs and drug-related medical supplies billed as FFS on a professionalclaim (CMS-1500 claim form or electronic equivalent), call the FFS medical PA contractor, DXCTechnology, at 1-800-457-4584, option 7 or send fax to 1-800-689-2759. For mailing addresses andadditional contact information, see the IHCP Quick Reference Guide at in.gov/medicaid/providers.Right Choices ProgramFor information regarding the Right Choices Program (RCP) Administrator for FFS programs, contactDXC at 1-800-784-3981. See the Right Choices Program module for more information about the RCP.WebsitesTable 2 provides a list of websites that IHCP pharmacy providers may find useful.Table 2 – Websites for IHCP Pharmacy ProvidersName4DescriptionAddressOptumRx IndianaMedicaidThe official website for IHCPpharmacy providers that includesfee-for-service pharmacy forms,publications, PDL, OTC DrugFormulary, Pharmacy SupplementsFormulary, PA request forms,pharmacy frequently asked questions(FAQs) for providers and members,and DUR Board and MHQAC meetingagendas and minutes.This site also includes the Indiana StateMAC lists and drug rebate labelers.inm-providerportal.optum.com(accessible from the Pharmacy Servicespage at in.gov/medicaid/providers)Indiana AdministrativeCode (IAC)Regulations pertaining to the IndianaMedicaid benefitin.gov/legislative/iacSee Title 405, Office of the Secretary,FSSANational Plan andProvider EnumerationSystem (NPPES)National ProviderIdentifier (NPI) LookupToolThis site provides access to providerNPIs at no charge.npiregistry.cms.hhs.govNPI Number LookupToolThis site provides access to providerNPIs at no charge.npinumberlookup.orgCenters for Medicare &Medicaid Services(CMS)The official website for CMScms.govMedicaidThe official U.S. government websitefor people with Medicaidmedicaid.govMedicareThe official U.S. government websitefor people with Medicaremedicare.govLibrary Reference Number: PROMOD00042Published: August 27, 2020Policies and procedures as of July 1, 2020Version: 5.0
Section 2: Pharmacy Coverage and ReimbursementThe Indiana Health Coverage Programs (IHCP) fee-for-service (FFS) pharmacy benefit program operatesunder the following basic parameters. Providers must be aware of and abide by these provisions: The scope of coverage and reimbursement methodologies is as set out in the IHCP rule at IndianaAdministrative Code 405 IAC 5-24. All covered drugs require a prescriber’s order or prescription, as defined in Indiana Board ofPharmacy law. The program is a payer of medically necessary covered services provided in accordance withapplicable law. The program is jointly funded by federal and State monies and, as such, is subject tofederal and State requirements. Although the program strives to have system edits in place whenever feasible and possible toenforce program policy and parameters, it is not systematically possible to have edits for each andevery dispensing situation. Therefore, the pharmacy provider must ensure that services renderedare covered by the program, rendered in accordance with pharmacy practice law and all otherapplicable laws, and do not exceed any established program limits. Payments that may result froma pharmacy provider’s failure to exercise due diligence in this regard are subject to recoupment.Legend Drug CoverageThe IHCP FFS pharmacy benefit program covers legend (prescription) drugs in accordance with the IHCPrule 405 IAC 5-24-3 Coverage of legend drugs, which, at the time of publication of this document, is asfollows:405 IAC 5-24-3 Coverage of legend drugsAuthority: IC 12-15-1-10; IC 12-15-21-2Affected: IC 12-13-7-3; IC 12-15Sec. 3. (a) A legend drug is covered by Indiana Medicaid if the drug is:(1) approved by the United States Food and Drug Administration;(2) not designated by the Centers for Medicare and Medicaid Services (CMS) as less thaneffective, or identical, related, or similar to a less than effective drug;(3) subject to the terms of a rebate agreement between the drug’s manufacturer and theCMS; and(4) not specifically excluded from coverage by Medicaid.(b) The following are not covered by Medicaid:(1) Anorectics or any agent used to promote weight loss.(2) Topical minoxidil preparations.(3) Fertility enhancement drugs.(4) Drugs when prescribed solely or primarily for cosmetic purposes.Library Reference Number: PROMOD00042Published: August 27, 2020Policies and procedures as of July 1, 2020Version: 5.05
Pharmacy ServicesSection 2: Pharmacy Coverage and ReimbursementMedically Accepted IndicationBased on federal law United States Code 42 USC 1396r-8, a state may exclude or otherwise restrictcoverage of a covered outpatient drug if the prescribed use is not for a medically accepted indication.The term “medically accepted indication” means any approved use for a covered outpatient drug underthe Federal Food, Drug, and Cosmetic Act, or a use that is supported by one or more citations included(or approved for inclusion) in any of the following compendia: American Hospital Formulary Service Drug Information United Status Pharmacopeia-Drug Information (or its successor publications) DRUGDEX Information SystemFor an indication that is not approved by the U.S. Food and Drug Administration (FDA) (includingappropriate duration for a medically accepted indication), pharmacy providers must document approvedcompendia supporting the indication and make the documentation available for audit review upon request.Claims that do not have a medically accepted indication documented are subject to audit and recovery.Federal Rebate ProgramFederal law requires that, for a legend or nonlegend drug to be covered by state Medicaid programs, themanufacturer must have a drug rebate agreement in effect with the Centers for Medicare & MedicaidServices (CMS).The drug rebate program was created by the federal Omnibus Budget Reconciliation Act of 1990 (OBRA-90)a
Pharmacy providers can contact the IHCP member’s MCE (or its associated PBM) for questions about pharmacy services covered under the managed care pharmacy benefit. See the IHCP Quick Reference Guide at in.gov/medicaid/providers for contact information. Links to the PBMs for managed care programs can beFile Size: 1MB
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