Pharmacy Alert: PBMs Take Action for Mailing of Prescriptions Post COVID-19 PHE

During the COVID-19 pandemic, major PBMs enacted exemptions allowing their providers to engage in activities that would typically violate the terms of their Provider Manual and Agreements. The flexibility was granted to facilitate the provision of services to their patients during a period when strict social distancing policies were in place. Traditionally, PBMs restrict the ability of retail pharmacies to mail prescriptions by prohibiting the use of common carriers (i.e. USPS, FedEx, UPS) to deliver medications, and limiting the geographical radius in which pharmacies may provide these services.  However, to account for the obstacles to patient care during the COVID-19 pandemic, several PBMs permitted their providers whose contracts restricted their ability to mail prescriptions to their patients, to do so freely without the threat of an audit or termination from the network.

Last year, Frier Levitt cautioned that many PBMs began notifying pharmacies that these exemptions were expiring and that the original terms of their respective Provider Agreements would now be reinstated. While some PBMs lifted their COVID-19 mailing “waivers” immediately after the expiration of the PHI, some PBMs allowed for an extension of their waivers for a period thereafter, or through the end of 2023. As a result, this year, Frier Levitt attorneys are noticing an increase in PBMs enforcing their mailing restrictions through audits and disciplinary actions against pharmacies, particularly those that continued engaging in the mailing of prescriptions following the expiration of the PBM’s waivers.

Following the expiration of COVID-19 exemptions, pharmacies should be aware of the increase in audit findings and attempts to recoup amounts properly reimbursed by the PBMs for prescriptions delivered to members via common carrier. To prevent these “clawbacks” or avoid termination from their PBMs network, pharmacies should review and update their policies regarding the delivery and mailing of prescriptions to patients and make sure that their existing contracts with their PBM allow them to provide delivery and/or mail services to patients. Importantly, pharmacies should understand their contracted PBMs’ position on the mailing of prescriptions and whether it is permitted under their Provider Manual and Agreements, and if so, to what extent. 

Pharmacies should also be aware of the risks that any continued mailing of prescriptions in violation of a PBM’s terms and conditions may harm their status as a provider in a PBM’s network. Specifically, continuing to mail prescriptions may lead to pharmacies receiving “cease and desist” notices from their PBMs that threaten termination if the pharmacies’ conduct persists. Furthermore, in the event of an audit of such prescriptions, any discrepancies associated with improper prescription mailing are likely to be used by PBMs to justify their removal from the network, if unresolved.

How Frier Levitt Can Help

If your pharmacy has currently received audit results or a notice of termination from a PBM alleging noncompliance with restrictions on mailing prescriptions, Frier Levitt can help. If your pharmacy also wishes to understand the various stances on mailing under your respective PBM Agreements, contact us today to speak with an attorney.