Recently, there has been an increase in the number of surprise, unannounced onsite payor investigations by PBM Special Investigations Units (“SIU”), which may result in post-payment audits and extrapolated overpayment demands. Even more alarming, depending on the severity of the perceived violations, it is possible that PBM SIUs refer pharmacies to external entities like the Medicaid Fraud Division (“MFD”) or the Office of the Insurance Fraud Prosecutor (“OIFP”), leading to potential civil or criminal prosecutions.
In addition to maintaining network and audit teams, PBMs have developed SIUs that include investigators whose role is to detect and investigate aberrant behavior observed in claims and enrollment data and to analyze data including overpayment recovery, measuring pharmacy behavior changes, and seeking possible Fraud Waste and Abuse (“FWA”) savings. When conducting an investigation, SIU investigators will take a more aggressive approach towards the pharmacy. This can include providing limited response times to a request or limited appeal windows for any alleged results, as well as limiting the type of documentation the pharmacy may submit to resolve any alleged discrepancies. In addition to conducting prescription and invoice reconciliation reviews during investigations, SIU investigators may also conduct further review of the pharmacy’s overall practices, particularly those related to marketing efforts the pharmacy might employ. They may even send investigative requests to patients and prescribers to confirm their authorization of prescriptions that a pharmacy dispensed.
There are several reasons a PBM SIU may decide to initiate an investigation. SIU investigations are usually triggered by complaints from patients or prescribers, referrals from regulatory agencies, and/or internal analytics that may indicate “red flags” or outlier dispensing practices. Importantly, recent themes we have noted in the investigations have been allegations involving invalid prior authorizations, inventory reconciliations, claims phishing as a result of test claims submitted by third-party contracted entities, and patient consent to receive medication.
To remain prepared for possible onsite investigations, pharmacies are cautioned to take proactive efforts to maintain an accurate and updated accounting of the pharmacy’s total inventory, including but not limited to, frequently and infrequently dispensed medications, rare drugs, and controlled substances. It is important to ensure a pharmacy’s staff is appropriately trained in all aspects of the pharmacy, including on billing practices, inventory management, prescription verification, etc. To that end, recordkeeping is key, and documents should be well organized in the event there is an investigation. It is recommended for a pharmacy to self-audit on a regular basis to proactively identify any potential concerns so that it can resolve them prior to the initiation of an investigation. Most PBM SIUs will take concern when a pharmacy reverses claims or tries to remedy any oversight after an investigation is initiated.
Because SIU investigations take a more aggressive approach towards the pharmacy and provide limited response times to a request or limited appeal windows for any alleged results, it is important that the pharmacy consider seeking legal advice when an investigation occurs.
How Frier Levitt Can Help
Our experienced healthcare and life sciences attorneys can guide your pharmacy through PBM SIU investigations and any adverse action against your pharmacy as a result of such investigation. If you are undergoing an investigation or have past results that you would like to further challenge, contact Frier Levitt to speak to an attorney.
