Since CVS Caremark (“Caremark”) introduced the aberrant quantities list (the “List”) in 2019, Caremark has been adding more drug products to the List every year. It now includes nearly 800 drug products and Caremark has been flagging pharmacies that dispense in excess of the 25% aberrant quantity threshold. In addition to the List, Caremark recently rolled out aberrant practices and trends update that goes hand-in-hand with the List starting January 1, 2022.
Similar to the List, the criteria of the aberrant practices and trends is vague and overly broad. It only broadens Caremark’s discretion and encourages limited pharmacy network. Caremark does not define practices that would constitute as “aberrant” and, instead, provides a few examples practices. For instance, a pharmacy is in breach of Caremark’s Provider Manual if Caremark deems that the pharmacy’s purchasing practices are not in line with the health and financial wellbeing of the patients and the plan sponsors (i.e., Caremark’s clients).
It is conceivable that Caremark will use aberrant practices and trends along with the List as a means to penalize the member pharmacies. Once a pharmacy gets flagged by Caremark for violating the List, the pharmacy has a 30-day window to cure the breach. If Caremark determines that the breach still exists, Caremark may impose monetary sanctions and other penalties including network termination. Notably, in the event of termination, the pharmacy not only has to wait a minimum of one year to reapply to participate in Caremark’s network but also has to demonstrate that it did in fact implement corrective measures to remediate the underlying basis of the termination.
Ultimately, the updated language benefits Caremark’s profits over a pharmacy’s operations. However, pharmacies faced with these allegations do have certain rights and defenses. Pharmacies can dispute Caremark’s alleged “aberrant” numbers and/or practices and trends in carefully crafted appeal responses. It is also essential to highlight any claims the pharmacy reversed that Caremark might have included in assessing the alleged aberrant quantity and/or practices and trends. Pharmacies may also be able to challenge the List and/or aberrant practices and trends altogether on the basis that these medications are otherwise included on the formulary selected and established by Caremark, and demand Caremark to provide details in support of their allegations.
How Frier Levitt Can Help
Pharmacies should review their policies and practices to ensure they comply with the updated prohibitions. Contact Frier & Levitt if your pharmacy is subject to an audit or investigation or you received a notice of dispensing drugs in excess of the aberrant threshold or practices and trends. Additionally, our attorneys can evaluate and make recommendations regarding the pharmacy’s billing practices and point-of-sale claim submission procedures to aid in curing the breach and preventing future termination.
