Traditional MedicareAdministrativeHigh impact
Senior Services News Vol. 5, No. 8
New Jersey Medicaid·NJ · Pharmacy·Pharmacy
Effective date
Aug 1, 2001
We identified it
Jun 20, 2026
Summary
PAAD (Pharmaceutical Assistance to the Aged and Disabled) program participating pharmacies must now enroll as Medicare Part B suppliers and authorize PAAD to act as their billing agent for dually eligible PAAD/Medicare claims. PAAD will submit these claims to Medicare on behalf of pharmacies and recapture Medicare payments from subsequent billing cycles. Pharmacies must comply with Medicare documentation requirements including ICD-9 diagnosis codes, maintain Medicare enrollment, and cooperate with PAAD on claim discrepancies.
Action Required
IMMEDIATELY: (1) Billing/pharmacy team must ensure enrollment as Medicare Part B supplier with the National Supplier Clearinghouse (NSC) and maintain active status. (2) Submit completed EDI Enrollment Form to PAAD designating PAAD as billing agent for all dually eligible PAAD/Medicare Part B claims. (3) Update pharmacy billing systems and staff training to require ICD-9 diagnosis codes (not ICD-10) on all original physician orders for dually eligible items (diabetic supplies, oral cancer drugs, immunosuppressive drugs, nebulizer solutions). (4) Establish process to capture diagnosis codes via telephone with First Health pending software updates, and maintain written physician orders on file for audit purposes. (5) Implement 34-day supply limit for PAAD claims (with waiver for pre-packaged diabetic supplies per Medicare guidelines). (6) Do NOT collect Medicare copayments from PAAD beneficiaries—PAAD will cover copayment differences. (7) Train staff to recognize dually eligible claims and apply correct documentation requirements. (8) Prepare to receive Medicare remittance advice and coordinate claim recapture with PAAD on subsequent billing cycles. Failure to comply will result in pharmacy exclusion from PAAD program participation.