While the year may be coming to an end, PBMs are gearing up to perform even more audits on their pharmacy providers. PBMs perform audits to monitor provider compliance all year round, but have been observed to increase frequency at the end of the year as they prepare to “clean-up” their respective networks (i.e. remove non-compliant providers). The purpose of these clean-ups is to ensure the provision of cost-effective as well as efficient pharmacy services to its members by monitoring the performance of its providers, and most critically, their compliance with the terms and conditions of their provider agreements and manuals. In the instance of any alleged noncompliance, PBMs will terminate their contracts with pharmacies whose participation they consider a risk to such provision of services by the end of the year. Therefore, the importance of compliance with audits from now until the end of the year cannot be overstated, as any discrepancies or problematic practices identified by the audits performed in the coming months may likely serve as a basis for termination.
Although this end of year “clean-up” may be unavoidable, pharmacies can minimize the administrative burden and headaches associated with PBM audits by taking measures to ensure that they are adequately prepared prior to receiving notices. One way for pharmacies to prepare is to be aware of the types of pharmacy activities that bring about heighted PBM scrutiny. Earlier this year, Frier Levitt updated its PBM Audit Checklist as a resource for pharmacies to make this assessment on their own practices.
In addition to the typical audit triggers, recent updates to the terms and conditions of PBMs’ provider contracts will also likely subject pharmacies to audits for engaging in certain practices which may have previously been considered common place. For example, up until last year, a pharmacy purchasing large quantities of medications may not have triggered any type of scrutiny. However, since the enactment of a prohibition of bulk purchases by a major PBM, such purchases are likely to subject pharmacies to an audit recovery. Similarly, the end of COVID-19 waivers, which permitted pharmacies to engage in conduct that was previously prohibited during the pandemic, may now serve as a justification for audits. Accordingly, pharmacies should be aware that any instances where medications were delivered via common carriers or delivered outside a specific geographic scope may very well trigger an audit, despite the fact that these practices were explicitly permitted in the years prior.
This year has also seen an increase in pharmacies being audited based on trending activities, such as servicing a large quantity of customers who are not considered local to a pharmacy, dispensing a large concentration in prescriptions from a limited number of prescribers or only for particular therapeutic categories.
Therefore, it is crucial that pharmacies engage in proactive efforts to prepare for an audit and in the event of an audit or any receipt of audit findings, that pharmacies appropriately address and resolve any concerns raised by the PBM to avoid recovery and potential network termination.
How Frier Levitt Can Help
If your pharmacy has recently received an audit request, or just wants to ensure that they are prepared for an audit, Frier Levitt can help. Contact us today to speak with an attorney.
