A Texas pharmacy’s status as a provider in a major PBM network is now secured thanks to Frier Levitt attorneys, Harini Bupathi, Esq. and Andrea C. Hageman, Esq. The PBM sought to terminate the pharmacy’s participation based on the Pharmacy’s submission of claims for COVID-19 test kits that were otherwise allowed to be dispensed to patients without a prescription in the State of Texas following a mandate in January of 2022. Specifically, the PBM flagged the pharmacy for having dispensed a number of COVID-19 test kits, along with what the PBM considered to be disproportionate ratio of claims that were either rejected or reversed, compared to the claims which were successfully reimbursed. However, with help from Frier Levitt, the Pharmacy was able to successfully dispute the basis of termination and in doing so, reverse the PBM’s decision.
While PBMs’ decisions to terminate a pharmacy are commonly triggered by an audit, the decision to exclude a pharmacy from a network can also be triggered by a pharmacy’s general conduct or practices, rather than any specific instances of wrongdoing. While the PBM did not allege that any individual claims were improperly submitted by the pharmacy, it took issue with the total number of claims for COVID test kits initially submitted and the number of claims that were reversed. PBMs often justify flagging certain activity as abnormal by comparing one pharmacy’s activity against other similarly situated pharmacies in order to identify “outlier practices.” However, conduct that a PBM may attribute to non-compliance with the terms of its provider agreement or manual can often be explained. For example, what a PBM may flag as suspicious activity can often be attributed to common pharmacy practices, or to circumstances outside a pharmacy’s control, such as the number of local patients who happen to take a certain medication or, as was the case here, an influx of patients who opted to not receive their medication, as opposed to the submission of test claims.
This termination reversal is a clear example of why pharmacies should consider disputing or appealing any PBM action or allegations of misconduct, especially terminations. In particular, terminations from one PBM network are typically required to be disclosed to other PBM networks a pharmacy is currently enrolled in or seeks to apply to in the future. Here, the pharmacy challenged the PBM’s limitation on dispensing a number of COVID-19 test kits without a prescription where the state otherwise allowed pharmacies to do so and where any claims reversals were appropriately made.
To that end, pharmacies are also strongly encouraged to ensure they are following any guidance from their PBMs and payors relating to the submission of claims for COVID-19 test kits to prevent unnecessary clawbacks or further action, such as network termination. In addition, pharmacies should ensure that they are appropriately submitting claims for reimbursement and timely reversing them, where applicable.
How Frier Levitt Can Help
Whether you have only just recently received a notice of termination from a PBM, or have already been terminated from a PBM’s network, Frier Levitt can help. Contact us to speak to an attorney.
