Pharmacies are increasingly facing scrutiny and adverse actions from Pharmacy Benefit Managers (PBMs) due to their relationships with certain third-party vendors. These vendors often claim to streamline business operations or administrative services to increase a pharmacy’s profitability. Specifically, such third-party companies may offer to provide benefits verification and similar claims review designed to provide higher profitability on claims while maintaining lower drug cost to patients.
However, PBMs, including Express Scripts, have flagged such third-party companies for allegedly submitting false test claims. These claims are often used to gather details such as a health plan’s benefit design, limitations and reimbursement information, rather than simply verifying a patient’s coverage. According to PBMs, the submission of claims without a valid prescription or allowing the third party to submit claims on behalf of the pharmacy may violate the pharmacy’s Provider Agreement and Manual with the PBM.
As a result of such relationships, PBMs have been increasingly auditing and subjecting pharmacies to a chargeback of any test claims, even when such claims were later reversed and not reimbursed. In addition, PBMs have been seeking network termination of pharmacies over contracting with such third parties without disclosing the relationship with the PBM.
Pharmacies considering contracting with such third-party companies to assist in business processes and increase profitability should have any such arrangement carefully reviewed to ensure compliance with applicable law. In addition, pharmacies should also consider any limitations identified under their PBM Provider Manuals/Agreement that otherwise prevent pharmacies from entering into such arrangements, particularly without prior disclosure or approval. Pharmacies should ensure that if they enter into such arrangements, that they are consistent with pharmacies’ expectations as providers in PBM networks. Most Provider Manuals prohibit pharmacies from submitting test claims, or claims that are submitted without a prescription on file or with the expectation of dispensing a medication to a patient, or from sharing claims level data that offer insights into reimbursement with other third-party vendors. Pharmacies should have any agreements reviewed prior to execution to ensure the terms comply with PBM Provider Manuals and Agreements as well as applicable Federal and State laws.
How Frier Levitt Can Help
If your pharmacy is considering engaging a third-party vendor to assist with benefits verification, marketing, or other business operations, contact Frier Levitt. Our attorneys can help you review agreements and ensure compliance with PBM terms and conditions as well as Federal and State laws.
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