Pharmacy Alert: Growing Trend of Major PBM Using Past Audit Results of Pharmacies for Network Review

As Pharmacy Benefit Managers (PBMs) review participation in their retail pharmacy networks, pharmacy providers find themselves at risk of termination over past audit results. We have recently seen a significant increase in a particular PBM presenting pharmacies for network review based on outstanding audit findings dating back to 2017 through audit findings as recent as within the past month. The pharmacies are then tasked with submitting information and documents for review and consideration by the PBM’s network review committee.  In conducting audits of network pharmacies, PBMs want to ensure that a pharmacy acts consistently with the terms and conditions of participation identified by the PBM. However, the concern arises when a pharmacy’s participation in a PBM network is at risk over minor audit discrepancies or even discrepancies that were erroneously alleged by the PBM.

Given this heightened focus on network compliance, pharmacies must be proactive and ensure that they meet the PBM’s Provider Agreement and all audit requirements. Pharmacies that undergo any investigation or audit with a PBM are cautioned to take proactive efforts to resolve discrepancies as unresolved findings may lead to claim recoupment and, if undisputed, network review and possible potential termination.

If a pharmacy receives a notice of review, it is essential that the pharmacy takes this notice seriously as the network review committee will decide on the pharmacy’s continued membership in the PBM’s network. If the PBM elects to terminate the pharmacy, the decision will often be final and will limit the pharmacy from reapplying admission for a period. It is crucial for a pharmacy subjected to a network review to provide any documentation not previously presented to dispute the outstanding audit findings, but also to demonstrate that the pharmacy substantially meets the PBM network’s terms and conditions. If a pharmacy does not submit a response to the network committee, the PBM will likely expedite an adverse decision to terminate the pharmacy.

Additionally, if a PBM finds a concerning pattern or practice identified during an audit that continues to be prevalent in the pharmacy, the network review committee is likely to take adverse action against the pharmacy.

It is important for a pharmacy to review its current policies and procedures regarding recordkeeping, claim submissions, prescription verification, copayment collections, inventory management, etc., to be prepared if the pharmacy is subjected to network review. Moreover, if the pharmacy submitted a corrective action plan during its audit appeal, it should ensure adherence to the corrective measures and be able to provide the PBM with documentation validating the pharmacy’s compliance.

How Frier Levitt Can Help

If your pharmacy has received a notice of network review, it is critical that you consult with experienced legal counsel. Frier Levitt attorneys have extensive experience and knowledge in the specific issues PBMs take regarding audit/investigation findings and have assisted numerous pharmacies in overcoming these results. Additionally, if you have unresolved audit findings, our attorneys can evaluate your situation and make recommendations regarding your pharmacy’s practices to resolve underlying concerns and prevent future termination. To address any related concerns and discuss your options moving forward, contact us to speak with a member of our team.