Pharmacy Benefit Managers (PBMs) continue to increase their scrutiny of pharmacies’ involvement in the prior authorization process. Recent audit trends demonstrate that PBMs are not only focusing on the validity of prior authorizations, but also how prior authorizations are initiated, who was involved, and whether the pharmacy exceeded its permissible role. For pharmacies, misunderstanding these distinctions can result in significant recoupments, adverse audit findings, and in some cases, termination from a PBM network.
Why Prior Authorizations Are a Growing Audit Focus
Prior authorizations are intended to ensure that prescriptions meet plan criteria before coverage is approved. However, PBMs increasingly rely on alleged prior authorization-related deficiencies as a basis for audit findings, often asserting that:
- the prior authorization was not properly obtained or authorized;
- the submission contained false, misleading, or otherwise unsupported information; or
- the pharmacy impermissibly participated in the prior authorization process.
Importantly, PBMs frequently take the position that any deviation from their provider manuals or contractual requirements, regardless of clinical appropriateness, can justify recoupment or termination.
The Pharmacy’s Role in Prior Authorizations
One of the most critical and frequently misunderstood issues is the extent to which a pharmacy may participate in the prior authorization process. PBMs and payors impose contractual limitations that vary across plans. As a general matter, most PBMs require that the prescriber directly complete and submit the prior authorization, given that medical necessity determinations must be made by the treating provider. While some PBMs permit limited administrative involvement by pharmacies, that involvement is typically constrained and, in certain cases, requires the prescriber’s prior approval.
Even where some level of assistance is permitted, the distinction between initiating, assisting, completing, and submitting a prior authorization is where significant audit risk arises.
CoverMyMeds and ePA Platforms
Many PBMs effectively prohibit pharmacies from initiating prior authorization requests, even where not expressly stated in provider manuals or agreements. As a result, electronic prior authorization (ePA) platforms, such as CoverMyMeds, add another layer of complexity. While these platforms may allow pharmacies to populate and transmit prior authorization information, certain plans:
- require submission exclusively through the prescriber’s account; and
- restrict a pharmacy’s ability to “send to plan.”
In addition, improper account configuration (e.g., registering as a provider rather than a pharmacy) may lead to allegations that the pharmacy acted outside its permitted role or misrepresented its identity. Accordingly, a pharmacy’s technical ability to submit a prior authorization through an ePA platform does not necessarily mean that it is contractually permitted to do so.
Best Practices for Pharmacies
To mitigate audit and regulatory exposure, pharmacies should consider the following:
- Review PBM Provider Manuals and Agreements. Each PBM imposes unique requirements. Pharmacies should ensure that their policies align with each applicable PBM’s rules.
- Define Internal Prior Authorization Workflows and Train Staff. Establish clear policies delineating what pharmacy personnel can and cannot do in the prior authorization process, and ensure staff are trained accordingly.
- Ensure Prescriber Control and Documentation. The prescriber’s role in the prior authorization process should be clear and well-documented. Pharmacies should maintain records demonstrating prescriber review, approval, and submission, as well as support for the accuracy of all information provided.
- Audit ePA Platform Use. Regularly review how ePA platforms are being used, including account configurations and submission workflows, to ensure consistency with PBM requirements.
How Frier Levitt Can Help
Given the increasing scrutiny surrounding prior authorizations, proactive compliance and experienced legal guidance are critical. Frier Levitt attorneys have extensive experience representing pharmacies in PBM audits and advising on prior authorization compliance. Our attorneys regularly assist with:
- Responding to PBM audit findings, recoupment demands, and network terminations;
- Developing and implementing compliant prior authorization policies and procedures; and
- Reviewing pharmacy workflows and ePA platform usage, including compliant CoverMyMeds registration and account configuration.
For additional guidance on navigating PBM audits and structuring compliant prior authorization practices, contact Frier Levitt.
