Major PBMs’ Changes and Increased Scrutiny to Prior Authorization Requirements

In an ongoing trend, pharmacy benefit managers (“PBMs”) have reinforced their terms and conditions on network pharmacies’ involvement on the prior authorization process. As we discussed last year (read here), health plans utilize the prior authorization process to ensure patient outcomes are optimized while reducing unnecessary drug spending. It is important to note that PBMs have different standards on the level of involvement that a pharmacy may have in the prior authorization process. As such, pharmacies should be aware of the prior authorization process and limitations that PBMs impose upon pharmacies.

Several PBMs, including a major PBM, have recently implemented additional restrictions on the involvement of a pharmacy in the prior authorization process. These PBMs have increasingly enforced their terms on the prior authorization process and attempted to subject pharmacies to a full recovery for any claims not appropriately submitted to the plan or PBM, and even terminating from the provider network.

While it is important to ensure that prior authorization requests are submitted with accurate information regarding the patient’s medical diagnosis and history of treatment, it is also crucial to ensure that the requests are being submitted according to the PBM’s Provider Manual and/or Agreement. Therefore, pharmacies involved in the prior authorization process should review their policies and procedures to comply with Federal and State laws, as well as the Provider Manuals and Agreements of their respective PBMs, to ensure accurate and appropriate submission of requests.

How Frier Levitt Can Help

Frier Levitt helps review and analyze pharmacy practices and prior authorization processes to ensure regulatory compliance and compliance with PBMs’  terms and conditions. In addition, Frier Levitt offers flat fee services aimed at pharmacies to help prepare policies and procedures regarding the prior authorization process, and “legal audit” services that comprehensively evaluate a  pharmacy’s practices. Contact us to speak to an attorney.