Frier Levitt recently helped a Texas based pharmacy overturn a network enrollment denial and termination by a major PBM. After undergoing a change of ownership, the pharmacy’s new owners followed the change of ownership procedures detailed in the PBM’s Provider Manual. To the pharmacy’s surprise, after submitting its enrollment application, it received a notification from the PBM conveying not only the denial of the enrollment application, but also the pharmacy’s would be terminated from the PBM’s network. While the distinction is subtle, by framing the enrollment denial as a termination as well, the pharmacy would have been forced to disclose its previous termination from a PBM network to other third-party payers. Such disclosure likely would have prevented the pharmacy from gaining access to other PBM networks. Thankfully, with the assistance of Frier Levitt’s attorneys, the pharmacy was able to reverse the termination and gain entry to the PBM’s networks.
Despite the pharmacy’s change of ownership and enrollment application being submitted in 2023, the PBM sought to rely on the results of an audit conducted over four years ago to terminate the pharmacy and exclude it from the PBM’s network. Specifically, the PBM claimed that because the pharmacy retained the pharmacist-in-charge who worked at the pharmacy when the adverse audit findings were issued four years ago, the pharmacy cannot join the PBM’s network—a position that is even more egregious when considering the fact that the pharmacist-in-charge had remained employed by the pharmacy throughout the four years following the audit without any additional adverse actions from the PBM. After receiving the requisite information from the pharmacy, our attorneys put together a robust appeal response utilizing the law and the pharmacy’s compelling narrative to challenge the unjust enrollment denial and termination. Once the PBM reviewed the appeal response, our attorneys engaged in extensive negotiations to admit the pharmacy into the PBM’s network. As part of these negotiations, our attorneys supplemented the pharmacy’s existing policies and procedures with robust protocols, which the PBM ultimately accepted along with the pharmacy’s enrollment application.
The credentialing process and the accompanying application are onerous for independent pharmacies and require pharmacies to disclose various details including business and ownership information, pharmacy licenses, dispensing practices, and any disciplinary actions taken against the pharmacy or its employees/owners. As highlighted in this case, PBMs will rely on any bit of information—regardless of how insignificant or ridiculous—to attempt to prohibit independent pharmacies from joining their networks to promote the use of the PBM’s own affiliated pharmacies. While states have attempted to address such practices through Any Willing Provider laws and similar statutes, these laws are often vague and provide enough leeway for PBMs to unceremoniously reject independent pharmacies’ enrollment applications.
As mentioned above, when PBMs reject a pharmacy’s enrollment application, especially when such rejection is coupled with a termination, the impact on the pharmacy can be substantial. For instance, three major PBMs administer pharmacy benefits for approximately eighty percent (80%) of covered individuals throughout the country. Consequently, exclusion from one of these PBM networks can be a financial disaster for independent pharmacies. Moreover, when an enrollment denial is coupled with a network termination, the likelihood of termination from other major PBM networks is amplified. Thus, as is the case with all adverse PBM actions, pharmacies must dispute enrollment denials/terminations to the fullest extent possible.
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 PBM abuse of your pharmacy. Our life sciences attorneys are prepared to provide guidance as your pharmacy prepares for audits or network enrollments. Moreover, we adopt an assertive approach to advocating for your rights following adverse PBM actions or audit findings. If you have questions or need help fighting adverse PBM actions, contact us to speak to an attorney.
