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Pharmacies Must Use Caution When Dealing with Third Party Auditing Companies

Over the past few years, PBMs have increasingly hired third party companies – such as SCIO, Xerox, Conduent or others – to conduct pharmacy audits. Many times, these companies are compensated based on the amount of money they recoup on behalf of the PBM (thus, they are incentivized to find as many discrepancies as possible). They are given very little training and certainly are not made aware of applicable audit...

Prime Therapeutics Continues Efforts Against Physician Dispensing

A year ago, Prime Therapeutics (Prime) announced that it would no longer accept new Physician Dispensing entities into their pharmacy networks starting on or around January 29, 2018. At the time, Prime had not terminated any Dispensing Physician entities that were already participating providers in its pharmacy networks and had made overtures that their participation would remain unaffected. Many Physician Dispensing entities nevertheless braced for aggressive audits and investigations, out...

Regardless of the Recoupment Amount, PBM Audit Appeals are Essential to Prevent Network Termination Based on Negative Audit History

Often, many pharmacies allow PBM audit findings to go uncontested due to smaller claw back amounts. Even if a PBM audit does not result in adverse action beyond the recoupment of monies from the pharmacy, PBMs keep track of their network pharmacies' audit histories. Increasingly, PBMs are using prior audit results as justification to terminate the pharmacy years later after the pharmacy has another adverse audit finding. Though the smaller...

Good News for Distributors and Manufacturers: Court Holds Municipalities to Higher Pleading Standards in Lawsuits in Comparison to Claims Brought by States and the Federal Government

With lawsuits brought by municipalities against opioid manufacturers and distributors exploding across the country in nearly every state, a recent court ruling gives municipalities pause, providing both relief and clarity to the industry. Last week, the Superior Court in the Judicial District of Hartford dismissed a suit brought by Connecticut municipalities against opioid manufacturers and distributors (including Purdue Pharma, L.P., Teva Pharmaceuticals USA, Inc., Johnson & Johnson, McKesson Corporation, Cardinal...

Frier Levitt Successfully Reduces PBM Audit by $392K for New York-Based Pharmacy

A New York-based pharmacy was facing a $400k recoupment following a PBM invoice reconciliation audit where the PBM had alleged the pharmacy did not have proper inventory. This is not an uncommon occurrence as PBMs often conduct invoice reconciliation audits to compare quantities of medications and the quantities billed. After submitting invoice documentation and other supporting materials, Frier Levitt successfully demonstrated that the pharmacy had maintained sufficient inventory at all...