Despite the fact that many Pharmacy Benefit Managers (“PBMs”) are Fortune 50 companies, many in the general public and even legislators do not know exactly what PBMs do or where their massive revenue streams come from. One of the tactics used by PBMs to rake in millions, among others, are pharmacy audits of independent pharmacies. Using draconian principles and heavy-handed tactics, PBMs recoup millions of dollars from independent pharmacies each year. In this article, we will examine one of many abusive audit practices implemented by PBMs, i.e., demanding pharmacies to “validate” prescriptions that were already dispensed to the patients.
Specifically, during an audit, PBMs often demand pharmacies to provide documentation demonstrating that prescriptions were prescribed to treat patients’ underlying conditions/diseases (i.e., contemporaneous medical records taken by the prescriber). It is axiomatic that in virtually all instances, the doctor’s underlying medical records are not readily available to the pharmacies. If a pharmacy is unable to produce this information (that they are not legally required to obtain and which doctors are often uneasy about providing), the PBM may take back the full reimbursement for the prescription, even when the prescription is facially-valid and there is no doubt that the patient received his or her medication.
Worse yet, we have seen instances where PBMs demanded from pharmacies clinical studies or other scientific resources (e.g., peer-reviewed scientific articles) that would support the clinical bases of the prescriptions. In other words, PBMs are asking the pharmacies to render a clinical opinion on the validity of the prescriptions that were written or authorized by physicians who presumably prescribed a particular medication based on their clinical experience and knowledge, and who likely had access to the patient’s medical history. Critically, PBMs demand such documentation (i.e., medical records, clinical studies, peer-reviewed articles) knowing that it will be difficult for the pharmacies to obtain the documentation and that the pharmacies are not required, under Federal/State laws and board of pharmacy regulations, to maintain such documentation as part of the pharmacy’s records.
How Frier Levitt Can Help?
The unchecked, unregulated and abusive audit practices by PBMs must be contested and placed under scrutiny within the boundaries of the law such as fair audit laws that are meant to provide certain levels of protection against abusive audit practices. Meanwhile, pharmacies should implement policies and procedure, which Frier Levitt can tailor for each pharmacy, in anticipation of the PBM audits. Otherwise, independent pharmacies will continue to dwindle, and the patient care will be dictated by PBMs. If your pharmacy is facing a PBM audit, contact Frier Levitt today to speak to an attorney.
