Recently, Frier Levitt attorneys assisted a Philadelphia-based pharmacy overturn a notice of termination (the “Notice”) issued by a national PBM. The PBM issued the Notice in response to the results of an audit conducted by an affiliated-PBM which alleged various discrepancy types including inventory shortages, member denials, invalid patient/prescriber relationship, and waiving member cost shares. Even more concerning, the Pharmacy was still in the process of appealing the audit which led to the purported termination and the audit findings had not yet even been finalized.
Frier Levitt’s life sciences attorneys conducted an extensive review of the audit findings to challenge both the audit findings themselves and the attempted termination. When challenging the termination, Frier Levitt’s attorneys guided the Pharmacy to ensure that proper supporting documents were obtained to address each of the alleged discrepancies in the audit findings. With the requisite documents collected, our attorneys were able to draft a robust appeal of the pending termination. After reviewing the Pharmacy’s appeal submission, the PBM decided to rescind the termination without imposing any additional conditions such as a Corrective Action Plan or Enhanced Oversight Agreement. In addition, the documents collected by the Pharmacy were used to challenge the audit findings which led to the purported termination, but the results of that appeal are still pending. However, based on the results of the Pharmacy’s termination appeal, there is hope that the audit findings will be reduced as well.
While Frier Levitt was able to obtain a positive outcome for the client in this instance, pharmacies should be cognizant of the recent uptick in PBM actions against independent pharmacies. In recent months, Frier Levitt has observed increases in aggressive PBM audit findings, network enrollment denials, and network terminations. In light of the heightened scrutiny imposed by PBMs, the importance of challenging PBM audits, denials, and/or terminations to the fullest extent cannot be overstated. To illustrate, pharmacies often allow PBM audit findings to go uncontested due to smaller recoupment amounts. However, PBMs regularly rely on a compilation of multiple “small” audits to justify termination of a pharmacy from its network, even years later. To compound this issue, termination from one PBMs network often results in additional network terminations, as PBMs require pharmacies to disclose any network terminations during the re-credentialing process – a disclosure that could have severe financial repercussions for any pharmacy. For instance, three major PBMs administer pharmacy benefits for approximately eighty percent (80%) of covered individuals throughout the country. Consequently, exclusion from one of these PBM networks can be a financial disaster for independent pharmacies. Thus, because even seemingly insignificant audit findings can lead to compounding issues and adverse actions in the future, independent pharmacies must proactively and vigorously challenge any and all PBM actions.
How Frier Levitt Can Help
Regardless of the size of your pharmacy or the amount at stake, Frier Levitt is ready and able to assist you in successfully challenging PBM abuse of your pharmacy. Our life sciences attorneys are prepared to provide guidance as your pharmacy prepares for audits or network enrollments. Moreover, we adopt an assertive approach to advocating for your rights following adverse PBM actions or audit findings. If you have questions or need help fighting adverse PBM actions, contact us to speak to an attorney.