Frier Levitt successfully reversed over 90% of audit findings for an Arizona-based pharmacy. The pharmacy had faced tens of thousands of dollars in discrepancies following an audit conducted by a national Pharmacy Benefit Manager (“PBM”). Under the guidance of Frier Levitt’s attorney’s Dae Y. Lee, Adam Farkas and Kelly Reynolds, the pharmacy was able to overturn the majority of the alleged discrepancies.
During the audit, the PBM identified a number of discrepancies including invoice shortages and missing signature log discrepancies. These discrepancies are commonly asserted by PBMs without having completed an adequate review of supporting documentation provided by the pharmacy. Rather, the PBM issues unwarranted findings, forcing independent pharmacies to uncover overlooked documentation and resubmit relevant documents.
Invoice Reconciliation
During this audit, Frier Levitt uncovered a concerning discrepancy among the PBM’s allegations. In reviewing correspondence between the pharmacy and the PBM, our attorneys learned that the PBM had requested documentation for an incorrect audit period. Frier Levitt’s attorneys were able to evaluate the prior correspondence and communicate with the PBM to correct the audit period as well as demand the PBM to accept updated purchase histories to reflect the correct audit period. Regardless of the unique circumstances of the present audit, the successful reversal of the invoice discrepancies illustrates the importance of rigid document management policies and knowledge of potential tactics used by PBMs during audits. The pharmacy was able to identify errors made by the PBM as well as be prepared to provide supporting documents on hand for varied audit periods.
Missing Proof of Delivery
In addition to the entirely false invoice discrepancies, the PBM’s audit findings incorrectly asserted that the Pharmacy lacked proof of delivery for several claims. However, the PBM failed to provide any additional evidence to support the allegations related to the missing documentation. Frier Levitt’s attorneys successfully challenged the alleged discrepancies by combing through the documents prepared by the pharmacy and providing them to the PBM.
Key Takeaways
This matter demonstrates several important lessons. First, pharmacies must be vigilant in assessing audits and requests made by PBMs. Failure to identify errors within unwarranted audit findings could result in a pharmacy being submitted to significant recoupment amounts as well as additional sanctions such as network termination against a pharmacy down the road. Identifying PBM errors while within the appropriate timeframe to contest findings ensures a pharmacy’s ability to reverse incorrect findings and avoid deceptive audit practices.
Second, this matter demonstrates the importance of stringent document management practices. Being able to provide PBMs with indisputable evidence of the pharmacy’s practices or supporting documents is an ideal way to overturn adverse audit findings. Moreover, organized management practices enable a pharmacy to provide supporting evidence in a timely manner, avoiding the risk of missing strict appeal deadlines.
How Frier Levitt Can Help
At Frier Levitt, we are committed to supporting independent pharmacies in navigating these complex challenges posed by PBMs. Our team of experienced attorneys is dedicated to defending pharmacies against unjust PBM practices and ensuring their continued ability to serve their communities. If your pharmacy is facing audit threats or other PBM-related issues, we are here to help you protect your business and secure your future. Please contact us today to speak to an attorney. By staying informed, prepared, and united, independent pharmacies can resist the pressures of PBM audits and network terminations, ensuring their vital role in the healthcare system endures.
