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Cross-Terminations of Commonly-Owned Pharmacies Becoming Increasingly Common

There is a growing trend of pharmacies that are being terminated from pharmacy networks by Pharmacy Benefit Managers (PBMs) due to the pharmacy’s affiliation with providers who have been previously terminated from the PBM’s pharmacy network. PBMs are targeting pharmacies that have relationships with terminated individuals or pharmacies. This means that your pharmacy could be subject to termination if it has common ownership, hired employees, maintains officers, or directors, who have all been terminated from the pharmacy network. Due to this growing trend, it is more important than ever to take all PBM actions serious, including audits, investigations, terminations, and even credentialing rejections.

However, a pharmacy can take the following steps to ensure that it does not fall subject to network termination:

  • Ensure current and present employees are not on the excluded providers list
  • Confirm that all owners of the pharmacy have not been employed by or owned a pharmacy that was previously terminated
  • Exercise right to appeal any audit discrepancy findings (discrepancy findings can be a basis for network termination)
  • Implement Corrective Action Plans for acknowledged discrepancies and errors
  • Conduct proactive self-audits to catch and remediate problems before they become bigger issues
  • Closely scrutinize all responses to PBM credentialing and recredentialing applications
  • Continually monitor PBM contractual updates, including amendments, bulletins, newsletters, etc.

Frier Levitt offers several Flat Fee services aimed at assisting pharmacies in this regarding, including a “Legal Audit” flat fee and a PBM credentialing flat fee.

If your pharmacy is currently undergoing Audit Findings, has multiple pharmacies under common ownership, or is simply looking to maintain compliance with the terms of your PBM Provider Agreement, contact Frier Levitt today to speak to an attorney.