PHARMACY ALERT: PBM Audits in the Time of COVID-19

The continuing COVID-19 pandemic has caused most business operations to go virtual, and PBMs have followed this trend. Earlier this year, we reported that PBMs had briefly suspended audits of pharmacies in an alleged effort to ensure pharmacies were dedicating sufficient time to service patients. Despite the uptick in COVID-19 cases and the challenges that come with servicing patients in the midst of the pandemic, PBMs have resumed their audits of pharmacies. Specifically, several PBMs have substituted their routine onsite audits with “virtual audits.”

PBMs have been initiating their virtual audits in a manner akin to desktop audits, such that PBMs have requested pharmacies compile prescription documentation for a number of identified prescriptions. Pharmacies are expected to gather this information and submit to the PBM for review. Soon thereafter, pharmacies are required to participate in a virtual audit that either takes place through a telephonic or video conference. During this virtual audit, pharmacies are expected to address a number of queries related not only to the prescriptions at issue, but also the pharmacies’ operations and policies and procedures, in an effort to ensure compliance with required terms and conditions of the particular PBM’s Provider Agreement and Manual.  In other words, regardless of the manner of the audit, PBMs obligate the pharmacies to demonstrate, among other things, compliance with applicable laws/regulations and standards set forth by PBMs. 

PBMs’ decision to resume their audit practice through virtual means amid the recent increase in COVID-19 cases is highly concerning for a number reasons, including, without limitation, the pharmacies will have to expend their resource to respond to an audit when they could have used it towards treating patients. Moreover, PBMs often take adversarial actions against the pharmacies after the audit (e.g., chargeback, payment suspension, and network termination).  Thus, it is imperative that pharmacies dedicate the appropriate time and attention to addressing audit requests.

How Frier Levitt Can Help?

Frier Levitt assists pharmacies in preparing for audits, responding to initial audit discrepancies, appealing final audit results, minimizing risks of PBM contract renegotiations, and challenging PBM contract terminations. We also help pharmacies develop business plans and establish standard operating procedures to prepare for audits long before they begin. If your pharmacy received a notice of an audit or is interested in planning ahead, contact us today to speak to an attorney.

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