As previously discussed in our April 2021 pharmacy alert, we have witnessed a growing trend in aberrant quantity audits and terminations coming from CVS Caremark. Specifically, CVS Caremark has been flagging more pharmacies for allegedly dispensing claims in excess of CVS Caremark’s 25% “aberrant quantity” threshold.
It is often difficult to appeal pharmacy terminations resulting from the alleged breach as CVS Caremark provides a broad definition of what classifies as aberrant quantities. CVS Caremark’s applicable amendment states that providers may not dispense aberrant quantities of a covered item or a high volume of claims within a particular therapeutic category. Moreover, CVS Caremark’s language gives it broad discretion on what constitutes the threshold. As a result, the threshold is often measured by the number of claims billed versus the quantity dispensed or dollars. Based on our experience, the cutoff equates to 25% or more of the provider’s claims or dollars submitted to CVS Caremark during one month for a drug product found on the aberrant quantities list. Although, the threshold can be as low as 10%.
However, the quantity threshold also applies to drugs not specified on CVS Caremark’s list. Therefore, pharmacies that dispense medications above the threshold in proportions different from local prescriber habits could violate the volume provision found in CVS Caremark’s Provider Manual. From our experience, CVS Caremark has held these claims above the threshold because they “are not servicing the needs or patterns of local Prescribers or Plan Sponsor formularies.” In turn, this could mean that a pharmacy focusing on, say, dispensing oncology medications could be at risk for dispensing aberrant quantities where it dispenses more oncology medications than its peer pharmacies.
Effective July 2021, CVS Caremark added 36 new drug products to the “aberrant quantities” list. Not only is this growing list problematic for prescribers and pharmacies alike, it also does not adequately address CVS Caremark’s broad definition of “aberrant” in relation to new to market drugs. For example, CVS Caremark’s list includes several new market drugs, where there is no clear indicator that these drugs are being prescribed in aberrant quantities, since they have never been on the market.
To stay ahead of the curve, pharmacies should (i) be aware of the products on the aberrant quantity list that is updated from time to time, and (ii) if they are dispensing products on the list, run regular internal audits to determine if any drug products found on the aberrant quantity list are over the threshold. In addition, it is essential to act quickly upon receiving CVS Caremark’s notice as the provider only has 30 days to cure the breach.
How Frier Levitt Can Help
Our attorneys have experience in carefully crafting appeal responses. For example, we have found success in disputing reversed claims CVS Caremark might have included in assessing the alleged quantity or challenging the aberrant quantities list on the basis that these medications are on the formulary selected and established by CVS Caremark. Pharmacies that receive a notice of dispensing drugs above the volume provision should consult with Frier Levitt if they wish to cure any breaches and prevent future termination or otherwise seek to challenge this list.
