In a growing trend, Pharmacy Benefit Managers (PBMs) have taken issue with a pharmacy’s alleged common ownership and/or affiliation with other pharmacies, particularly those that (i) have been previously terminated from the PBM’s pharmacy networks, (ii) have had suspected fraud, waste, and abuse, or (iii) have had serious/significant audit findings. Often, PBMs have terminated pharmacies over common ownership and/or affiliation during the time of a change of ownership or recredentialing, as pharmacies and their past performance are generally more scrutinized during this time.
According to PBMs, pharmacies who have been identified to have some overlap of ownership or even affiliation with other pharmacies that have not performed well in the PBM network are informed that they no longer meet the PBM’s terms and conditions. For example, a PBM may terminate a pharmacy for significant audit findings, and the pharmacist-in-charge (PIC) at such pharmacy may seek employment at another pharmacy. However, as a result of the PIC’s previous employment at a pharmacy that had audit findings and was later terminated, the new pharmacy that has since employed him will likely face issues contracting with the PBM. The degree of connection to warrant a finding of “common ownership” or “affiliation” has been very attenuated in some cases, where even just a single common employee (such as a staff pharmacist) is enough for the PBM to make the claim.
While PBMs have suggested that they review these matters on a “case by case” basis, it has been increasingly common for PBMs to terminate pharmacies for their employees’ past conduct at other pharmacies or for reasons of common ownership. For example, common ownership could include spousal relationships or even parental relationships.
How Frier Levitt Can Help
When faced with termination based on common ownership or affiliation, please contact us to speak to an attorney today. Frier Levitt has help pharmacies navigate this complex and tenuous issue, and enable pharmacies to remain in network in spite of allegations by PBMs.
