Pharmacies should be vigilant of an increased trend in pharmacy audits by several Pharmacy Benefit Managers (PBMs) focusing on claims with alleged “invalid” prior authorizations. Many prescriptions – especially high cost, specialty medications – require a prior authorization before being covered under the plan, as part of plan’s efforts to avoid higher costs potentially in favor of lower cost alternatives. The prior authorization process is time-consuming and tedious, and it often requires several steps that alternate between the prescriber, the pharmacy, the PBM or even the insurance company before a pharmacy ultimately receives approval to dispense the medication.
As a result of these challenges, the prior authorization process can lead to breakdowns of communication or instances where overworked physicians do not have the time or focus to diligently complete all aspects of prior authorization requests. In either case, this results in patients not getting needed medications.
However, in some cases, to facilitate the prior authorizations, pharmacies have become involved in the prior authorization approval process through a few different means. In certain instances, pharmacies have undertaken to compile the needed information and “prepare” the prior authorization forms for submission by the prescribers. In other instances, some pharmacies have undertaken to submit the prior authorization requests themselves – either through the pharmacy directly or on behalf of the prescribers. When undertaking these submissions, pharmacies often indicate that they are associated with the prescribers themselves or are acting as agents of the prescriber. Of note, submitting prior authorizations in this fashion is not without risk, and has been the cause of many audit discrepancies leading to network suspensions or terminations. PBMs have stringent rules in place that strictly prohibit pharmacies from submitting a prior authorization while acting as a prescriber. As such, pharmacies should be cautious when taking part in the prior authorization process as various PBMs have placed limitations on the pharmacy’s involvement in the prior authorization process.
Equally problematic is the accuracy of the information contained in the prior authorization applications themselves. Any false or inaccurate information submitted in the prior authorization process can lead to adverse consequences such as criminal or civil penalties, especially when it has been the pharmacy that has supplied the information..
As there are significant consequences for pharmacies if prior authorizations are not completed accurately and appropriately, pharmacies should take care to maintain and adhere to proper prior authorization practices, training, and standard operating procedures to ensure it is in full compliance with all laws and PBM requirements. One way that pharmacies can combat prior authorization audits includes ensuring the proper role in the process. For example, certain PBMs and government programs explicitly prohibit the pharmacy from submitting the prior authorization requests. Taking steps to demonstrate that it was, in fact, the prescriber, not the pharmacy, that submitted the prior authorization form can be important to avoid audit recoupments or terminations. Likewise, where the pharmacy takes a role in the prior authorization process (where allowable by PBM contract and law), the pharmacy should employ a clear process for cross-referencing or validating the prior authorization submissions with medical records to demonstrate that the information on the prior authorization forms is accurate.
How Frier Levitt Can Help
Our life sciences attorneys have the knowledge and experience to assess your pharmacy’s prior authorization practices, employee training, and standard operating procedures to ensure compliance with PBMs terms and conditions and other rules and regulations. Frier Levitt also offers flat fee services including, but not limited to, drafting and implementing robust prior authorization policies and procedures and other related prior authorization guidance which have been reviewed and approved by government agencies in the past. Contact us today to speak to an attorney.
