Recently, Frier Levitt has successfully challenged significant audit findings issued by a major pharmacy benefit manager (“PBM”) against an independent pharmacy based in California. During the audit, the PBM identified unsubstantiated drug invoice discrepancies, i.e., invoice audit. Under the guidance of life sciences attorneys Dae Y. Lee, Pharm.D., Esq., CPBS, and Adam C. Farkas, Esq., the pharmacy was able to gather supporting documentation and our attorneys drafted a robust appeal response. The PBM ultimately reversed all alleged discrepancies and rescinded the associated clawback.
Invoice audits are generally narrow in scope and limited types of claims for a specific time-period. In an invoice audit, PBMs are looking to match the purchase history of the pharmacy with the number of claims submitted by the pharmacy. PBMs request the pharmacy to provide, through wholesalers, invoices and purchase summaries in general. Despite the relatively uncomplicated nature of invoice audits, PBMs have used different tactics to discredit valid purchases made by pharmacies.
It is not a secret that PBMs often attempt to use routine audits as a tool to seek unwarranted recoupment of funds from their contracted pharmacies. More troubling, PBMs impose stringent terms dictating which documents are deemed “sufficient” to overturn alleged discrepancies. Thus, it is imperative that pharmacies have significant procedures in place to ensure they are properly retaining the appropriate documents to defeat unfounded PBM audit findings. In addition, pharmacies should utilize the contractual appeal process outlined in their agreements with PBMs to combat any and all audit findings, regardless of the purported clawback amount. Oftentimes, pharmacies allow PBM audit findings to go uncontested due to seemingly insignificant amounts at issue. Critically, even if a PBM does not result in adverse action beyond the recoupment of monies from the pharmacy, PBMs keep track of their network pharmacies’ audit histories. There has been an increasing frequency of instances where PBMs rely on prior audit results to justify the termination of a pharmacy from its network if the pharmacy has more adverse findings years later. Though small amounts may not seem to be worth disputing, failure to do so may serve as a basis for severe PBM sanctions, including network termination, in the future.
How Frier Levitt Can Help
Regardless of the size of your pharmacy or the amount at stake, Frier Levitt is ready and able to assist you in successfully challenging a PBM’s audit of your pharmacy. Our life sciences attorneys are prepared to provide guidance as your pharmacy prepares for PBM audits as well as an aggressive approach to fight for your rights following a PBM audit. If you have questions or need help fighting adverse PBM actions, contact us to speak to an attorney.
