The California Department of Healthcare Service (DHCS) has just posted an update regarding Medi-Cal Rx transition (See Related Blog Post). In anticipation of this transition, there are some early cutoff activities that California pharmacies should note:

  • Pharmacy Paper Claim Submitters: The cutoff for claims processing for paper claim submissions to the current FI is March 14, 2021. Paper claim submissions received after this date will be routed to Medi-Cal Rx for processing on April 1, 2021.
  • Pharmacy Claim Inquiry Forms (CIFs) and Appeals: The cutoff for the receipt of pharmacy CIFs and Appeals to the current FI is March 14, 2021. Submissions received after this date will be routed to Medi-Cal Rx for processing on April 1, 2021.
  • Pharmacy Computer Media Claim (CMC) Batch Submitters: The cutoff for the receipt of pharmacy CMC submissions is March 14, 2021 at 11:59 p.m. CMC claims sent to the current FI on or after March 14, 2021 will be rejected. For batch claim submissions after this cutoff, DHCS recommends that submitters prepare these files per the Medi-Cal Rx Payer Sheet and then hold the files and submit them to Medi-Cal Rx on or after April 1, 2021.
  • Pharmacy Treatment Authorization Request (TAR) Fax Lines: The existing pharmacy TAR fax lines (800-869-4325, 800-371-0712, 800-829-4325, 800-641-1021, 213-346-9424, 209-933-9593) will be shut down on March 31, 2021 at 5:00 p.m. These numbers will be transitioned to Medi-Cal Rx and are scheduled to be available for Fax Prior Authorizations and attachments for Medi-Cal Rx on April 1, 2021.
  • Pharmacy TAR Fax Attachment Line: The existing free-form attachments for the electronic TAR fax line (877-270-8779) will continue to operate for non-carved out pharmacy services and medical services. As of April 1, 2021, the pharmacy free-form attachments line for Medi-Cal Rx is 800-869-4325.

For more information, visit Medi-Cal Rx website.

If you are into pharmacy technology, you might have heard of a new pharmacy software designed to optimize profitability – UGO. It was built by pharmacy owners who know the industry and day-to-day problems that independent pharmacies face. For example, the platform integrates and functions with most existing pharmacy operating systems and provides “Key Performance Indicators” highlighting what the pharmacy is currently doing and ways it could improve its profitability. It also provides a “Medicare Part-D” tool that searches approved medications and provides information on their reimbursement prices.

Some other interesting features are:

  • A forum where independent pharmacy owners can discuss common problems and ask questions.
  • A marketplace, which provides information about competitive pricing on inventory and other pharmacy items.
  • News where leading industry professionals offer industry updates and trends.
  • Wholesale calculator tool to target and negotiate the most favorable prices.

UGO’s website explains that the intention behind the platform was to improve pharmacy’s “efficiency by reducing the number of software/programs needed to operate, monitor, and manage the business aspect of the pharmacy.”

Sounds interesting? If so, check out UGO’s video explaining their product.


I am starting a series of posts consisting of mini-topics that I covered during my December webinar. I had many questions regarding the information presented and will try to address some of the issues in this series.

Today I will be talking about manufacturer coupons, which is a common cause of significant PBM recoupments.

Let’s review when a pharmacy can safely apply manufacturer coupons. According to PBM manuals, coupons may be applied when a pharmacy:

  • complies with the pharmaceutical coupon program. For example, all such programs exempt government-sponsored plans.
  • does not apply coupons on any compounds, medical devices or medical foods. Sounds straightforward? Often, however, pharmacies fail to spot these products. For example, one of the cases I had last year involved a scar gel, which the FDA classifies as class 1 medical device.  As a result, a PBM recouped 100% of what it paid to the pharmacy for dispensing these expensive gels.
  • does not apply coupons on products not subject to the FDA approval process, such as multivitamins and supplements.
  • does not apply coupons to non-FDA approved drugs. In my experience, this is the most common PBM issue relating to inappropriately applied coupons. The easiest way to verify if the drug is FDA approved is to consult the Orange Book.

Some PBMs also exclude coupons from specific programs or associations. Make sure to review your manuals to ensure compliance with each specific PBM requirement.

Related Blog Post: “When applying manufacturers coupons could get a pharmacy in trouble.” 

The transition date of Medi-Cal managed care claims to fee-for-service is still set for April 1, 2021.

Medi-Cal Rx – the name of the new program – will apply to all pharmacy services billed on pharmacy claims. However, most DME claims are exempt. For a complete list of exempt products, visit Medi-Cal Rx website.

The existing Medi-Cal managed care pharmacy carve-outs will continue to be reimbursed in the same manner (e.g., blood factor, HIV/AIDS drugs, antipsychotics, or drugs used to treat substance use disorder).

The Department of Health Care Services (DHCS) promises that the entire dedicated Medi-Cal Rx website will be fully operational by April 1, 2021. In the meantime, DHCS encourages Medi-Cal providers, health plans, beneficiaries, and other interested parties to sign up for the Medi-Cal Rx Subscription Service, which sends Medi-Cal Rx updates by email.

DHCS will allow beneficiaries to have enough time during the transition period to work with their prescribers to either submit prior authorizations (TARs) based on medical necessity, or switch to a preferred Medi-Cal Rx covered drug. If a drug is not listed on the Medi-Cal Contract Drug List, a TAR will be required.

For all Medi-Cal beneficiaries with an existing prescription that did not require a TAR but will otherwise require it after the implementation, DHCS will use paid claims data received from Managed Care Plans to “look back” and validate that a prior prescription existed for the applicable medication.

For existing prescriptions with previously approved TARs, DHCS will use TAR history data to “grandfather” those prescriptions to allow continuation of the TAR through its stated duration, e.g., three months, six months, etc., but not to exceed one (1) full year from the original TAR start date.

Some additional changes:

  • The DHCS will not enforce “6 prescriptions per month” requirement.
  • The DHCS will not require pharmacy lock-ins as some managed care plans do.
  • The DHCS plans to eliminate some co-pays and to have long-running TARs for certain conditions and classes of drugs. For example, TARs lasting up to 5 years, for such conditions as ADHD, Alzheimer and drugs as Antidepressants, hormone replacement and many others.
  • The DHCS also plans to expand auto-adjudication functionalities to reduce the number of drugs with TAR requirements with manual review.

Prior to the implementation date, the DHCS encourages pharmacies to submit test transactions to ensure connectivity and uncover any software issues. If you would like to submit test claims, please email with your Contact Name, Phone Number, Pharmacy National Provider Identifier (NPI), and Switch information

DHCS will also be transferring previously established Electronic Fund Transfer (EFT) account information from the existing Medi-Cal fee-for-service (FFS) Fiscal Intermediary to Medi-Cal Rx. However, for those pharmacy providers that do not wish to have their EFT account information transferred over to Medi-Cal Rx for use after the April 1, 2021, assumption of operations, an option to “opt out” is available. Opt-out instructions.

Registered users who wish to provide new or modified EFT account information to Medi-Cal Rx for use after the Medi-Cal Rx assumption of operations may do so at this link.


The SUPPORT Act (Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act) requires that controlled substances prescriptions covered under Medicare Part D be transmitted electronically. The effective date for compliance was set for January 1, 2021. Does this mean that pharmacies can no longer accept paper/faxed prescriptions?

First of all, the Act only applies to prescribers (not pharmacies) and requires them to have technology that supports e-prescribing. There are a number of exceptions to the requirement that a controlled substance prescription must be transmitted electronically. For example: prescriptions for hospice patients, for dual patients residing in skilled nursing facilities, emergency circumstances (as determined by the prescriber), or if a prescriber has a waiver. The Act and its guidance specifically states that pharmacies can continue filling scripts issued for a legitimate medical purpose by an individual practitioner acting in the usual course of their professional practice. Therefore, the responsibility for compliance rests on the prescribers and not on pharmacies.

Secondly, CMS announced that due to the Covid outbreak, it will delay compliance until 2022 to allow prescribers ample time to install and test the technology. The announcement states that no penalties will be imposed until that time.

Pharmacies may continue accepting Part D prescriptions for controlled substances transmitted by means other than e-prescribing platforms as long as all other requirements are met.

The news are full of excitement regarding a recent US Supreme court decision in Rutledge v PCMA. But there is still lots of confusion what this decision means for independent pharmacies.

So let’s look at what the case is really about.

It all started in Arkansas when the state passed Act 900, which provided that:

  1. PBMs are to tie reimbursement rates to pharmacies’ acquisition costs by timely updating their MAC lists when drug prices increase in a timely manner.
  2. PBMs must provide administrative appeal procedures for pharmacies to challenge MAC reimbursement prices that are below the pharmacies’ acquisition costs.
  3. PBMs must allow pharmacies to reverse and rebill each reimbursement claim affected by the pharmacy’s inability to procure the drug from its typical wholesaler at a price equal to or less than the MAC reimbursement price.
  4. The Act permits a pharmacy to decline to sell a drug to a beneficiary if the relevant PBM will reimburse the pharmacy at less than its acquisition cost.

The Pharmaceutical Care Management Association (PCMA) representing the 11 largest PBMs in the country, challenged the Act arguing – like in many other state cases – that ERISA pre-empted it and the state could not regulate PBMs in how they administer pharmacy benefit. The Eight Circuit (the appeal court) agreed with the PCMA. The state appealed the case to the U.S. Supreme Court which held that ERISA does not necessarily interfere with state objectives: “ERISA does not pre-empt state rate regulations that merely increase costs or alter incentives for EIRSA plans without forcing plans to adopt any particular scheme of substantive coverage.”

While the case is a strong step towards effective PBM regulations, a lot of work still remains to strengthen and enact proper regulations that would protect independent pharmacies and reduce drug cost. Also remember, Rutledge only deals with a narrow issue whether ERISA  preempts state laws regulating PBMs. After losing this argument, PCMA may come up with other arguments why states cannot interfere with PBM practices.

 Due to extremely high demand, we created a second webinar on regulatory compliance. So, if you have not registered for our November 24th, 2020 webinar, we encourage you to register for this one, which will take place on December 2, 2020 at 6:30 pm PST. Both seminars have the same agenda. But we want to make sure everyone has an opportunity to ask questions and participate.

This webinar is geared towards pharmacy owners, managers, and pharmacists-in-charge, focusing on regulatory compliance.

Webinar’s Agenda:

1. PBM changes for 2021: formulary changes, aberrant quantities updates and strategies, preferred networks.

2. California regulatory changes: New CURES regulations, new prescription pads, collaborative practice agreements, Independent HIV Preexposure and Postexposure Prophylaxis Furnishing.

3. Medi-Cal managed care pharmacy benefit transition into fee-for-service.

4. Independent pharmacies’ plan to survive: overview of legal actions against PBMs, updates on PSAOs, national trends.

5. Q-&-A session

Please register here or email us directly:

We are looking forward to seeing you there!

In the most recent Script newsletter, the California State Board of Pharmacy explained that it received multiple complaints and observed practices where non-pharmacist staff were initiating the immunization process. It reminded that the authority to independently initiate and administer a vaccination extends only to pharmacists.  The Board strongly encouraged pharmacies, designated pharmacists-in-charge, and pharmacists to evaluate their practices of initiating and administering vaccinations and take immediate corrective actions. Based on some of our cases, the Board has issued multiple citations/fines to non-compliant pharmacies.

If your pharmacy administers immunization, review your policies, train your staff, update any written procedures, and prepare immunization forms, if necessary.

To remind, Cal, Business & Professions Code 4052.8 requires that pharmacists performing immunization (1) complete an immunization training program endorsed by the CDC or the Accreditation Council for Pharmacy Education; (2) be certified in basic life support, (3) comply with all state and federal recordkeeping and reporting requirements.

You can download our Immunization policy and procedure here. 

Currently, California pharmacies must report dispensing of Schedules II-IV to CURES (California’s PDMP database) “as soon as reasonably possible, but no more than 7 days after a controlled substance is dispensed.”

Effective January 1, 2021, California pharmacies will have to report the dispensing of a controlled substance prescription to CURES no more than one working day after the medication is dispensed (some exceptions apply). Also effective January 1, 2021, pharmacies must report dispensing Schedule V controlled substances to CURES.

For other healthcare providers, the new rule will mandate CURES review at least once every 6 months after the first time the substance is prescribed and the prescriber renews the prescription (with some exceptions). The rule would also establish a review and documentation requirement for a health care practitioner who receives the CURES database information from another authorized user.

For the full text of the new regulation, please go to AB 528.

Every healthcare provider has at least one problematic patient who demands extra attention. Some of these patients continue to cause troubles even after they are “discharged.” A recent case coming from Utah illustrates this.

Ms. Reynolds was a regular customer of Kent’s Market pharmacy. On many occasions, she complained to the pharmacy staff about the wait time (she alleged that her usual wait-time was about 45 minutes). According to the pharmacy manager, his staff spent numerous hours on the phone with Ms. Reynolds’ insurance. As a result, the pharmacy informed Ms. Reynold that they no longer would fill her scripts.  The pharmacy also notified the state Medicaid agency of a potential insurance fraud that Ms. Reynolds was allegedly trying to commit.

The enraged patient filed a legal action against the pharmacy under the American with Disabilities Act (ADA) and Utah’s Consumer Protection laws.

During the litigation, the pharmacy argued that the decision to “discharge” Ms. Reynold was based on the amount of time it took its staff to accommodate her requests. The Pharmacy called Ms. Reynold “a very difficult and demanding costumer,” who demanded large amounts of employees’ time. The pharmacy further explained that Ms. Reynolds made unreasonable requests such as demanding prescriptions “in amounts and doses higher than written” and requiring the employees to spend anywhere from 20 minutes to an hour on the phone with her insurance company.

The court ruled for the pharmacy holding that Ms. Reynolds failed to present sufficient evidence that the pharmacy discriminated against her based on her disabilities.

While the case resulted in a favorable outcome for the pharmacy, it still spent time and money defending itself and putting its reputation on the line. So while you may be right when you do not want to deal with difficult patients, before “discharging” them, consider collateral damage that they may cause. Any “discharge” should be done in a very careful non-confrontational manner to avoid any implications of violating patients’ right to care.