Recently, Frier Levitt assisted an Illinois-based pharmacy in challenging multiple Pharmacy Benefit Manager’s (“PBM”) audit findings as a service to the TRICARE Pharmacy Program and successfully reversed 100% of the discrepant amounts. In the audit findings, the PBM sought claim data verification for several prescriptions, stating the “Network Provider Refused to or Failed to Provide Requested Information.” Under Frier Levitt’s guidance, the Pharmacy gathered supporting documentation and submitted a robust appeal response challenging the alleged discrepancies, particularly as the PBM withheld the funds despite the Pharmacy’s timely submission of a Grievance Request and Request for Reconsideration. Leveraging Frier Levitt’s experience in addressing PBM audit tactics, the Pharmacy submitted patient records, signed prescriptions, pharmacy work orders, compounding records, progress notes, and delivery tickets demonstrating that the Pharmacy did in fact maintain and provide sufficient claim data verification. Ultimately, the PBM reversed 100% of the audit findings.
The excessive audit findings seen in this case are examples of abusive PBM tactics that have become far too routine in pharmacies’ dealings with PBMs. Being aware of such practices and how they can be remedied is crucial to avoiding negative outcomes for your pharmacy.
While PBMs are increasingly taking disciplinary actions against pharmacies, pharmacies have several effective tools at their disposal to push back against PBM overreach. One of the most important steps pharmacies can take is to implement and maintain comprehensive policies and procedures that ensure compliance with the requirements set forth in PBM Provider Manuals. By doing so, pharmacies can reduce the risk of unfavorable audit outcomes or severe sanctions and, if action is taken by a PBM, they are better positioned to respond effectively.
Moreover, PBM Provider Manuals generally include contractual appeal and dispute resolution processes. These procedures give pharmacies the right to challenge any actions or allegations made by PBMs. Taking advantage of these appeals processes is essential, not only for contesting terminations, but especially in response to audit findings. Pharmacies are strongly encouraged to appeal all audit findings, regardless of the financial impact, as even minor findings can lead to more significant PBM actions if left unchallenged. Timely appeals can result in the reversal of unfounded findings, the release of improperly withheld payments, and a reduced risk of future network termination.
Finally, there is growing momentum among state and federal lawmakers to rein in PBM misconduct. Many states have enacted Fair Audit laws that establish procedural safeguards, including clear limits on what documentation PBMs may demand, when funds can be withheld or recouped, and how audits must be conducted. As regulatory scrutiny of PBM practices increases, additional legislative protections for pharmacies are likely on the horizon.
This matter further demonstrates the importance of combating all PBM audit findings, as PBMs assert unnecessary discrepancies to use pharmacy audits as a source of revenue rather than ensuring compliance with applicable laws and contractual obligations. PBMs will use multiple adverse audit findings to justify terminating pharmacies from their network, so it is crucial for pharmacies to appeal PBM audit findings and attempt to reduce the amounts at issue to the fullest extent possible. Thus, seemingly “insignificant” amounts should be appealed to avoid additional future adverse actions by PBMs.
How Frier Levitt Can Help
Frier Levitt has decades of experience handling investigations and audits conducted by the government or payors, including PBMs. Regardless of the size of your pharmacy or the amount at stake, Frier Levitt is ready and able to assist you. Our experienced life sciences attorneys can guide your pharmacy in preparing for audits and take an aggressive approach to protect your rights. If you have questions or need help fighting adverse actions, contact us to speak to an attorney.
Frier Levitt provides strategic, industry-focused legal counsel tailored to your needs. Contact our team today to learn how we can help you.
