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Pharmacy ALERT: Prime Therapeutics Heightens Investigative Efforts Against Pharmacies with Enhanced Oversight Addendums

Prime Therapeutics is notorious for taking an aggressive stance against its network pharmacies regarding enhanced credentialing criteria.  Over the past year, we have reported numerous instances whereby Prime has sought to terminate pharmacies for alleged credential non-compliance.  In recent weeks, Prime has taken steps to heighten its investigation into pharmacies that have signed Enhanced Oversight Addendums (EOA). These EOAs were offered to pharmacies participating in Prime’s networks in response to alleged violations of Prime’s credentialing criteria. These credentialing criteria include billing thresholds that limit the number of claims a pharmacy can bill to Prime for drug products relating to:

  • Traditional and non-traditional compounds, excluding rudimentary compounding
  • Over 200 single ingredient FDA-approved medications and products
  • Non-FDA approved drugs

In addition to agreeing to comply with the 10% billing thresholds listed above, pharmacies that sign EOAs can also expect to see:

  • Increased auditing and investigations, which may include up to four onsite or desktop retrospective audits and/or investigations
  • Increased costs associated with these audits and investigations up to $6,000 per year
  • Increased daily monitoring on a per claim basis

Prime has also sought to terminate pharmacies from its network, without first providing these pharmacies with an EOA and opportunity to comply with certain credentialing criteria. In some instances, Prime has sent EOAs to pharmacies as a first notice and without warning. Pharmacies should take care to read these EOAs carefully and develop a sound legal strategy to respond to Prime’s enhanced oversight requirements.

Pharmacies who have signed an EOA and are currently under investigation or have been terminated without having had the opportunity to sign an EOA should understand that they have certain protections under their agreements with Prime and under applicable federal and state laws. Practices should leverage these legal tools to challenge Prime’s decision.

If your pharmacy has received an EOA in the past or has been terminated by Prime, Frier Levitt can help. We have the tools and experience needed to craft a robust response on behalf of pharmacies nationwide. Frier Levitt utilizes federal and state laws, along with creative and effective legal strategies, to help pharmacies tackle the challenges of navigating these terminations and enhanced requirements. Contact Frier Levitt today to speak to an attorney on next steps available to your pharmacy.