Generic Diaper UPC FAQs

When will coverage for generic diaper brands start?

• February 28, 2025

When should pharmacies use the Generic UPC?

• Pharmacies may choose to use the generic UPCs when dispensing a generic diaper brand or when dispensing a non-covered UPC, whether due to member preference or the pharmacy's considerations such as pricing, inventory, purchasing, or availability.
• As a reminder, claims for non-covered UPCs will Reject 70—Product Not Covered, and prior authorizations are not allowed. Therefore, pharmacies may choose to process the claim for that product utilizing the Generic UPC assigned for that diaper size.

What diapers can we order for members?

• Pharmacies may choose to order products on the Covered UPC list and process claims for those UPCs and be reimbursed at the assigned MAC rate for that brand and size.
• Pharmacies may also choose to purchase diapers that are not on the Covered UPC list and utilize the Generic Diaper UPC that corresponds to the correct size. These claims will be reimbursed at the Generic Diaper MAC rate, which may be less than the MAC rate assigned to the brand, even if the brand is the same as a covered product.
  • For example, the pharmacy may choose to utilize the Generic Diaper UPC for a non-covered Huggies UPC, however the claim will reimburse at the Generic Diaper UPC MAC rate.

How are claims for diapers processed?

• Covered diaper UPCs will be available in Medi-Span to sync or add to the pharmacy’s system.
• Generic diaper UPCs will not be available to sync with Medi-Span. Pharmacies will need to manually add these products to the pharmacy’s system.
• For products on the Covered UPC List, claims should be processed for full package quantities. Claims may be processed in multiples of the package quantity for that UPC. Packages of diapers should not be broken.
• For Generic Diaper UPCs, pharmacies should process claims for the quantity of the full package (or multiples of the full package) of the product being dispensed. However, claims will not reject when submitted if the package quantity and submitted quantity do not match.

• The following UPCs may be submitted for diaper claims. Pharmacies should submit only the UPC that matches the size of the actual product dispensed

• At this time, training pants are not eligible to be processed under the Generic Diaper UPCs. Please continue to use Covered UPCs.

How much will my pharmacy be reimbursed for Generic UPC diaper claims?

• The MAC Rate for Generic Diapers will be assigned based on size. The assigned MAC rates as of February 28, 2025, are as follows:

• Each claim will have sales tax calculated based on that size specific MAC rate and quantity dispensed.
• The pharmacy will be paid an Admin Fee equal to $3 per 100 diapers ($0.03/diaper).
• The pharmacy will not receive their assigned Professional Dispensing Fee on diaper claims.
• Ingredient Cost Paid = MAC Rate per diaper * # of diapers
• Total Reimbursement = (Ingredient Cost Paid) + (% sales tax * total ingredient cost paid) + (admin fee * # of diapers)
• The MAC rates can be found in the Billing Guide.

Can MAC rates for Generic Diaper UPCs be appealed? How?

• Yes, pharmacies can submit rate inquiries to TennCare’s pricing vendor, Mercer.
• Generic Diaper UPC MAC rates are set based on pricing of the following generic brands only:
  • Parent’s Choice (Walmart)
  • Kirkland Signature (Costco)
  • Little Journey (Aldi)
  • Comforts (Kroger)
  • Member’s Mark (Sam’s Club)
• Pharmacies are allowed to fill diaper orders with brands, outside of the generic brands listed above. However, rate inquiries will not be reviewed for those claims.
• Rate inquiries for products listed on the Covered UPC list will continue to be accepted.
• Two options for submitting diaper MAC inquires:
  • Pharmacies can download the rate inquiry paper form and email it to Mercer with a copy of their invoice attached.
  • Pharmacies can submit through the website by selecting “Submit an Inquiry” and choosing “General Inquiry” under the drop-down menu.
• Mercer’s website
• Mercer’s contact information:
  • Phone: 844-294-9982
  • Fax: 612-642-8931
  • Email: mercerrxpassage@mercer.com
• Mercer Rate Inquiry Process for Diapers:

How can fraud, waste, and abuse be prevented?

• TennCare has provided an OPTIONAL diaper request form that pharmacies can use to collect patient demographics, product requests, parent/guardian attestation of understanding of program rules, and parent/guardian signature of request.
• Signature upon receipt/delivery of diapers is required at point-of-sale and should be maintained by the pharmacy in case of audit.
• Documentation of receipt of diapers is required for each order dispensed to a TennCare or CoverKids Member. Documentation must include, at a minimum, the order or prescription number, member name, date billed, date received, and a signature of the person receiving the diaper order (i.e., the member, member’s representative, or a representative of the facility in which the patient resides). When diapers have been mailed, shipped, or delivered, the pharmacy shall require a signature confirmation documenting proof of receipt. The signature logs are required to be provided for the auditor to review if requested.
• Pharmacies should maintain copies of invoices and receipts for purchase of diapers according to their Network Agreement with Optum Rx.
• Diapers obtained through the program are not eligible for resale, return, or exchange for cash or store credit.
• Pharmacies should take steps to prevent fraud, waste, and abuse. It is recommended for pharmacies to place their pharmacy label over the barcode on the package and/or mark through the barcode with a permanent marker to disallow scanning of the barcode for product returns for cash/gift cards.
• For diaper orders dispensed utilizing the Generic Diaper UPC:
  • The pharmacy shall document the actual product UPC dispensed on the hardcopy, backtag, or electronic record maintained at the pharmacy.
  • The pharmacy may choose to annotate in their pharmacy software electronically on the record associated with the diaper order or on paper records, such as the Diaper Request Form.
  • Documentation of the actual product UPC will allow the pharmacy to keep track of the last product dispensed to the member.
  • The actual product UPC dispensed should be retrievable by the pharmacy in the event of audit.
  • Invoices/receipts for diapers purchased should be maintained for diapers dispensed under the Generic Diaper UPC.

Are diaper claims subject to audit?

• Yes. Pharmacies should maintain proof of receipt of diapers and proof of purchase of the diapers. Pharmacies should keep records of their purchases on file for audit purposes.
• When a pharmacy purchases diapers from another retailer, the pharmacy should consider using a sales tax resale certificate to avoid paying sales tax.
• Diaper orders processed and covered under the TennCare Diaper Program are not considered a drug or device and are not intended to be billed for medical use.

What constitutes a “proof of purchase”?

• Pharmacies should maintain invoices or receipts from wholesalers or other retailers from where diapers were acquired.

How should pharmacy-generated orders for diapers be maintained?

• While diaper orders are not considered a drug or device for medical use, pharmacies may follow their standard procedures for OTC products processed as pharmacy claims. For example, pharmacy generated diaper orders can be filed with other hardcopy prescription files. Orders fulfilled using the Generic Diaper UPC shall contain documentation of the actual product UPC dispensed.

How long must diaper orders be kept for record purposes?

• Pharmacies should follow their standard operating procedures for maintaining records. Pharmacies should maintain records for TennCare according to their Network Agreement.

What format must the diaper order be kept in?

• Pharmacies may choose which format to house their house pharmacy generated orders.
  • Examples may include pharmacy prescription order blanks, scanned or electronic requests for diapers from members, and the optional diaper request form (paper copy or electronic)

What are some options for keeping records of diaper orders?

• Pharmacies may maintain electronic or paper copies of pharmacy generated diaper orders used to bill diaper claims.

Are automatic refills allowed on diaper claims?

• Automatic refills are not allowed. All diaper refills shall be initiated by a request from the physician, member, or other person acting as an agent of the member (i.e., family member).

What is required for proof of receipt?

• Documentation of receipt of diapers is required for each order dispensed to a TennCare or CoverKids Member. Documentation must include, at a minimum, the order or prescription number, member name, date billed, date received, and a signature of the person receiving the diaper order (i.e., the member, member’s representative, or a representative of the facility in which the patient resides). When diapers have been mailed, shipped, or delivered, the pharmacy shall require a signature confirmation documenting proof of receipt. The signature logs are required to be provided for the auditor to review if requested.

Who should the pharmacy contact with questions?

• Pharmacies may call the Optum Rx/TennCare Customer Service line at 866-434-5520.
• Pharmacies may also email the Optum Rx Provider Liaison Pharmacists at TNRxEducation@optum.com