Medicare Part D audits do not just verify that a drug was clinically appropriate. They examine whether the claim was valid, documented, and billed correctly. That’s why small clerical mistakes often lead to large clawbacks. Plans and their audit vendors assume that if a required element is missing or wrong, the claim was never payable. Below are the five most common clerical errors that drive recoupments—and how to prevent them with simple, reliable routines.
What Part D auditors actually check
Auditors follow the money. They look for proof that the prescription was valid under state law, the prescriber was eligible, the product billed matches what was dispensed, the patient actually received the drug, and the days’ supply and price were correct. If any of those fail, they can recoup the entire paid amount. Why? Because Medicare pays only for services that are “reasonable and necessary” and properly documented. Missing paperwork means the payer cannot prove compliance.
Audits can look back years. They may extrapolate sample findings across thousands of claims. That’s how a missing signature on a handful of prescriptions turns into a six-figure take-back.
The top 5 clerical errors that trigger massive clawbacks
1) Invalid or incomplete prescriptions
What it is: Prescriptions missing required elements or not meeting state/federal rules. Typical misses include no prescriber signature (or invalid e-signature), no date of issue, unclear directions, missing quantity, wrong patient name or DOB, or using an electronic prescription printout as if it were an original. For controlled substances, errors include missing DEA, unauthorized faxing, or altered directions without proper documentation.
Why it leads to recoupment: If the prescription is invalid, the claim is not payable—no matter that the drug was dispensed and the patient took it.
Example: A Schedule II eRx is printed by the clinic and faxed to the pharmacy. The pharmacy fills it. During audit, the plan recoups because a printed/faxed copy is not a valid original for Schedule II in most states.
How to prevent it:
- Use a simple intake checklist for every new Rx: patient, date of issue, drug, strength, quantity, directions, prescriber name/NPI, signature (or valid eRx confirmation), and refills.
- Document any clarifications: who you spoke with, date/time, exact change, and initials.
- For controlled substances: confirm DEA, prescriber authority, and permitted transmission method before filling.
- Do not treat a printed or faxed copy of an eRx as the original unless your state law explicitly allows it.
What to keep on file: The actual original or unaltered eRx record; addendum notes for clarifications; any hard-copy changes initialed and dated by pharmacist; for controlled substances, any required exceptions documentation.
2) Missing or weak proof of pickup/delivery
What it is: No patient signature, no delivery manifest, incomplete logs, or missing documentation for caregiver pickup, curbside delivery, or LTC facility receipt.
Why it leads to recoupment: Medicare pays for drugs dispensed and received. If you cannot show the patient (or authorized agent) got the medication, auditors assume they did not.
Examples:
– A family member picks up a controlled medication. The log shows only a first name, no relationship, and no staff verification.
– A mail delivery lacks tracking or delivery confirmation, and the address on the label is different from the patient’s file.
How to prevent it:
- Require legible signatures and printed names, date/time, and relationship when not the patient. Staff must initial any third-party pickup verification.
- For deliveries: maintain route logs, carrier tracking numbers, delivery address, and a delivery signature or documented waiver with patient consent.
- LTC: keep facility delivery logs plus MARs or eMAR extracts showing administration or availability to the patient.
- For curbside/drive-thru: record vehicle, staff initials, date/time, and identity verification.
What to keep on file: Signature logs, delivery manifests, tracking details, MARs/eMARs, and any signed delivery waivers.
3) Days’ supply and directions that don’t match the quantity billed
What it is: The billed days’ supply doesn’t agree with directions or package size. This happens often with inhalers, insulin pens, eye drops, and test strips. It also occurs during med sync or partial fills without documentation explaining the short supply.
Why it leads to recoupment: Days’ supply drives plan edits, refill timing, pricing, and utilization metrics. If billed days’ supply is wrong, the claim may have paid when it should not have, or at an incorrect amount.
Examples:
– Lantus pens: A box contains 15 mL (1,500 units). Patient uses 20 units/day. True days’ supply is 75 days (1,500 ÷ 20), not 30.
– Inhaler labeled “200 puffs,” directions “2 puffs BID.” True days’ supply is 50 days, not 30.
How to prevent it:
- Train staff to calculate days’ supply from directions and package counts. Build quick-reference sheets for high-risk categories (insulins, inhalers, eye drops).
- When performing med sync or short fills, add a note: “Partial fill per sync. 10-day supply dispensed on [date]. Remainder due [date].”
- For test strips and lancets, align quantities with testing frequency and document any overrides.
- If directions change, update the claim with correct days’ supply and document the change.
What to keep on file: Calculation notes or system memo for complex products, any partial-fill rationale, and prescriber confirmation for direction changes.
4) Prescriber eligibility and identifier errors
What it is: Wrong or mismatched NPI, prescriber outside scope of practice, expired DEA for controlled drugs, resident prescriptions without supervising physician when required, or prescribers on a preclusion list. Telemedicine across state lines without a valid license is another trap.
Why it leads to recoupment: Part D pays only for prescriptions from eligible, legally authorized prescribers. If the prescriber is ineligible or misidentified, the claim fails the basic payability test.
Examples:
– A physician assistant writes for a Schedule II drug in a state where a supervising physician must be listed. The claim is billed under the PA’s NPI alone.
– An out-of-state telehealth prescriber issues a prescription for a patient’s state where they are not licensed.
How to prevent it:
- Validate prescriber NPI at intake and tie it to the correct practitioner record. Keep DEA numbers up to date and linked to controlled authority.
- Know your state’s scope rules for NPs/PAs, including supervision or cosignature needs. Capture supervising physician data when required.
- Check for any payer preclusion lists and act on alerts in your system.
- For telehealth prescribers, verify state licensure matches the patient’s location.
What to keep on file: Prescriber records with NPI/DEA, scope notes, supervision documentation if applicable, and any system alerts/resolutions.
5) Billed NDC does not match product dispensed (or lacks invoice support)
What it is: Claim billed under an NDC different from what was actually dispensed, or billed with a package size that doesn’t match, or repackaged product billed under the wrong labeler. Auditors also request invoices to prove you bought the exact NDC you billed and had adequate stock on the dispense date.
Why it leads to recoupment: Part D claims are paid at the NDC level. If the NDC is wrong or unsupported, the pricing and reimbursement are wrong.
Examples:
– Unit-dose blister from a repackager billed under the manufacturer’s NDC.
– Shortage substitution where the technician changed the NDC at the register but the claim kept the old NDC.
How to prevent it:
- Scan the actual product NDC at dispensing and lock the claim to that NDC. Avoid manual overrides.
- Keep wholesaler invoices organized by NDC and date; verify you had stock on the fill date and in a quantity sufficient for the claim.
- For repackaged drugs, ensure the billed NDC matches the repackager’s labeler code, not the original manufacturer’s.
- Perform monthly NDC-to-invoice spot checks for high-volume items.
What to keep on file: Product labels, NDC scans, purchase invoices, and any pedigree or repackaging documentation.
Less obvious traps that still cause take-backs
- Prior authorization and overrides: If the plan required PA, keep the approval letter and the effective dates. If you used a plan override code, keep the reason and prescriber support. Without it, auditors treat the claim as non-covered.
- Wrong benefit: Some drugs are Part B in certain situations (for example, insulin used in a pump). Billing Part D by mistake invites recoupment. Document benefit checks for borderline items.
- Coordination of benefits: If another payer should have paid primary, keep EOBs showing that payer’s payment or denial, and your secondary billing details.
A simple 15-minute weekly audit routine
Pick five recent Part D claims. For each, confirm:
- Valid prescription: All required elements present; any clarifications documented.
- Prescriber eligibility: Correct NPI, scope compliance, DEA valid if controlled.
- Product match: Billed NDC equals dispensed NDC; invoice on hand for that NDC and date.
- Days’ supply: Calculation matches directions and package sizes.
- Proof of receipt: Signature or delivery documentation is complete and legible.
Log issues, fix patterns, and update staff training. This small habit catches most audit findings before an auditor does.
What to do when you get an audit notice
- Do not alter records. Create copies for the audit. Keep originals intact.
- Assemble a document packet with a cover sheet listing each claim and the documents included (prescription, clarifications, proof of delivery, invoices, MARs, PA approvals).
- Ask for an extension early if needed. Auditors often grant a short, one-time extension.
- Fill gaps ethically. You can obtain prescriber attestations or missing clinic notes if allowed by contract, but you cannot backdate signatures or change original records.
- Appeal strategically. Focus on factual evidence: state law allowances, documented clarifications, scope rules, and benefit coverage.
Quick checklists you can post at the bench
- Prescription intake: Patient + DOB, date, drug/strength, quantity, directions, refills, prescriber name/NPI, signature/eRx confirmation, DEA if controlled.
- Before claim submission: NDC scanned, days’ supply calculated, prescriber eligibility verified, PA/override documented if used.
- At handoff/delivery: Patient or agent signature, printed name, date/time, relationship; delivery address and tracking if shipped.
- Monthly file hygiene: Invoices matched to high-volume NDCs; spot-check days’ supply on insulins/inhalers; review any scope or telehealth prescriptions for licensure.
- Record retention: Keep all audit-relevant documents for at least the period required by Medicare and your contracts (10 years is a safe standard).
The bottom line: Part D audits are document audits. If the paperwork is clean, the claim stands. If a single required element is missing or mismatched, plans will assume the claim was never payable and claw back the funds. Build simple, repeatable checks—especially for the five errors above—and you’ll protect your patients, your license, and your bottom line.
I am a Registered Pharmacist under the Pharmacy Act, 1948, and the founder of PharmacyFreak.com. I hold a Bachelor of Pharmacy degree from Rungta College of Pharmaceutical Science and Research. With a strong academic foundation and practical knowledge, I am committed to providing accurate, easy-to-understand content to support pharmacy students and professionals. My aim is to make complex pharmaceutical concepts accessible and useful for real-world application.
Mail- Sachin@pharmacyfreak.com