Provider Audits - Drug/Pharmacy
 The
Provider Audit Program assesses that provider claims are billed in compliance
with the Terms and Conditions of the Non-Insured Health Benefits Program.
The objective of the audit program is to ensure that the Non-Insured
Health Benefits (NIHB) Program is appropriately billed by providers for
the benefits and services provided in conformity with NIHB policy.
Overview
Audit Objectives
Audit Components
Stages of the On-Site Audit
Reference Documents
Additional Information
Overview
The overview is intended to provide a better understanding of the pharmacy
provider audit process and the requirements for claims adjudication under
the NIHB Program. The audit activities are based on generally accepted
industry practices and accounting principles and may be carried out,
up to two years from the date a prescription is dispensed or as long
as it is being dispensed against, if longer than two years.
As a publicly funded Program, it is a federal requirement to account
for the expenditure of those public funds. The Pharmacy Provider Audit
Program contributes to the fulfillment of this overall requirement. The
Pharmacy/Medical Supplies and Equipment (MS&E) Provider Agreement
signed by providers allows First Canadian Health (FCH) to verify paid
claims against pharmacy records. In Quebec, the right to audit is established
under the agreement between the Association Québécoise
des Pharmaciens Propriétaires (AQPP) and Health Canada.
On behalf of the NIHB Program, FCH conducts administrative audits of
paid claims for services rendered to NIHB clients. All audit activities,
from the selection of pharmacy providers for audit, to issuance of audit
documentation to providers regarding the findings, are approved by representatives
of the NIHB Program.
The NIHB Program and FCH highly regard and value the services provided
to NIHB clients. The purpose of the Audit Program is to share information
with providers about proper billing conditions, and to verify paid claims
against the NIHB Program requirements. Claims which do not meet the billing
requirements of the NIHB Program are subject to recovery.
The following overview outlines the objectives and components relating
to the audit of claims on behalf of the NIHB Program.
Audit Objectives
The objectives of the Provider Audit Program are as follows:
- To ensure that providers have retained appropriate documentation
meeting both provincial and federal regulations as well as program
requirements, in support of each claim, in accordance with the Pharmacy/MS&E
Provider Agreement;
- To ensure that services paid for were received by NIHB clients;
- To detect billing irregularities; and
- To validate active licensure of the providers.
Audit Components
The components of the Provider Audit Program are outlined below. To
carry out the Next Day Claims Verification and On-Site Audit Programs,
FCH requires access to the following information:
- Client's profile
- Original prescription
- Shipping invoices
- Internal invoices
- Manufacturers' invoices (to determine applicable markup)
- Documentation of item receipt by the client
- Evidence of additional coverage (to coordinate benefits)
Next Day Claims Verification Program - Consists of
a review of claims submitted by service providers the day following receipt
by FCH. Service providers may be contacted to provide copies of prescriptions
and/or invoices as well as any other supporting financial data. Any errors
detected through this process will result in the claim being denied for
payment. Claims submitted for extemporaneous mixtures which do not contain
at least one ingredient on the NIHB Drug Benefit List (DBL) will be reversed
on the system and subject to reclaim.
Client Confirmation Program - Consists of a quarterly
mailout to a randomly selected sample of NIHB clients to confirm the
receipt of the benefit that has been billed on their behalf.
Provider Profiling Program - Consists of a review of
the billings of all service providers against selected criteria and the
determination of the most appropriate follow up activity if concerns
are identified. All claims are subject to review by audit.
On-Site Audit Program - Consists of the selection
of a sample of claims for validation with a service provider's records
through an on-site audit. Providers are not randomly selected for audit.
Providers may be selected for an on-site audit as a result of information
gained through the above three components and any additional information
received. FCH contacts the provider at least three weeks prior to the
proposed on-site audit date. Every effort is made to accommodate the
audit date with the provider's schedule. The date agreed upon for the
on-site audit is confirmed by fax with the provider.
Stages of the On-Site Audit
Pre-Audit/Entrance Interview
The pharmacist will be asked to describe the records filing system for
tracking prescriptions, and whether the documentation for claim transactions
is maintained on hard copy or electronically on the client's profile.
The pharmacist will be asked whether the prescription records under review
are to be retrieved by the pharmacist staff or the auditors. The auditors
will indicate to the pharmacist that a post-audit summary will be provided
at the end of the on-site audit.
Conduct of the On-Site Audit
The purpose of the on-site audit is to verify paid claims against pharmacy
records. At the end of each audit day, a list of prescriptions or documents
not found by the auditor will be provided to the pharmacist. The pharmacist
has the opportunity to locate and supply the documentation to the auditor
the next audit day. If any documents are not located by the end of the
on-site audit, the provider has the opportunity to send these documents
to the auditor within two weeks of the end of the audit. Claims not supported
by the required documentation will appear as recoveries in the audit
letter and report to the provider.
Post-Audit Interview
At the end of the on-site audit, the auditor will provide a general
overview of the categories of errors found. The final audit results will
not be complete until the auditor has conducted additional analysis,
such as, but not limited to, client and prescriber confirmations. During
the post-audit exit interview the provider will be given a standard checklist
to complete and send to FCH, which serves to confirm the audit process
conducted at the respective on-site audit.
Audit Report
A report of the audit findings will be sent to the provider within 60
days of the on-site audit. If there are delays in meeting this deadline,
a letter will be sent to the provider advising of the delay and the revised
delivery date for sending the audit letter and report. Once the audit
letter and report are received, and in the event that there are audit
observations resulting in recovery of claims, the provider has 30 days
to respond to FCH. If the provider needs additional time to respond,
a request for additional time is to be sent in writing to FCH.
Within 60 days of the response from the provider, FCH will send a letter
and report of the final audit findings to the provider. In the event
that there are final audit findings resulting in recovery of claims,
the provider has 30 days from the date of the letter in which to submit
a cheque to FCH for the reimbursement of the identified overpayment .
Failure to respond within 30 days of the 2nd letter, will
result in a withhold against the provider's payment statements until
recovery is paid in full.
Documentation Requirements for Audit Purposes
Providers must retain a copy of the original prescription on file for
two years or as long as it is being dispensed against, if longer than
two years in accordance with provincial or territorial requirements.
Claims for which the original prescription or supporting documentation
is not available for review, including those with prior approvals may
be recovered through the audit program. A unique prescription number
must be assigned by the provider for each item dispensed and claimed.
Hard copy and electronic patient records are reviewed where documentation
is required (documentation of Drug Utilisation Review - DUR - overrides,
therapy change, etc.)
Proper documentation of any intervention is required for verification
against the Program's billing criteria. Safety and protection are outside
the mandate of the Audit Program and the NIHB Program as these roles
are dictated under law by the respective colleges. Appropriate supporting
documentation includes but is not limited to:
- Date of intervention
- Summary of the intervention by the pharmacist
- Documented communication with the physician, caregiver, and/or patient
- Reason for early refill (for example: medication lost, destroyed,
stolen, physician changed dosage, or patient going out of town for
a period greater than the days supply remaining of the current refill)
- Manufacturer's invoices required to substantiate invoice cost + mark-up
- Shipping invoices
- Internal invoices
- Evidence of additional coverage (to support coordination of benefits)
- Items awaiting pick-up (to verify pickup within 30 days of fill or
claim reversal is required)
- Documentation to verify that the client:
- is registered with Indian and Northern Affairs Canada (INAC)
as a status Indian or recognized by an Inuit organization
- resides in Canada or is a student or migrant worker outside
of Canada who is registered or eligible for registration under
a provincial or territorial health insurance plan
A separate valid prescription (as defined by federal and provincial
legislation) is required for each member of a family for the reimbursement
of claims submitted under the NIHB Program. Separate claims must be submitted
for each client using the client's own unique client identification number
and prescription number to ensure accurate patient drug profiles. This
includes prescriptions for products used by more than one person in the
family at the same time such as head lice treatment.
Reference Documents
- FCH Pharmacy/MS&E Provider Agreement
- FCH Pharmacy/MS&E Provider Information Kit
- NIHB/FCH Newsletters -- issued quarterly
- NIHB Program Drug Bulletins
- NIHB Program agreement with provincial pharmacy associations
- Provincial and Federal drug and pharmacy legislation
Additional Information
 Providers
requiring additional information about the FCH/NIHB Provider Audit Program
may contact
the FCH Director of Provider Audit in writing.
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