In recent months, we have seen a new audit focus emerge among various pharmacy benefits managers (PBMs) that is catching pharmacies by surprise and resulting in large recoupments and even network termination. It starts with a PBM requesting, in the course of an audit, copies of the pharmacy’s State pharmacy licenses. Thereafter, the PBM compares the States into which a pharmacy has mailed medications with the States in which the pharmacy maintains valid licensure. If a pharmacy has mailed prescriptions to patients in a State where it is not licensed, the PBMs (typically relying on their credentialing provisions) find such claims to be discrepant and seek recoupment from the pharmacy.
When mailing a prescription to a patient in another State, particularly in isolated transactions, pharmacies often do not consider the potential consequences if they are not licensed in that State. PBMs have sought to utilize these “unauthorized mail order” discrepancies as a basis to support network termination, and have threatened to contact Boards of Pharmacy over this issue.
Pharmacies who mail out-of-state must be extremely cognizant of the licensure/registration requirements for the States into which they ship. To that end, Frier Levitt can provide research and advice to pharmacies on the mail order licensure requirements for each of the States into which the pharmacy ships, and offers this service for a flat fee.
In addition, pharmacies must be cautious of what information they provide to PBMs when faced with these audits. Statements made to the PBMs regarding their pharmacy licensure (or lack thereof) could be construed as an admission and could led to negative consequences before various State Boards of Pharmacy, including their home-state Board of Pharmacy (as more State Boards are communicating with one another). However, pharmacies faced with this type of discrepancy may have certain defenses to recoupment efforts by a PBM, including certain “de minimis exceptions” to licensure requirements and exemptions relating to specific types of medications or devices. Therefore, if your pharmacy is facing such an audit, it is important that you contact an attorney to protect their rights.
