Frier Levitt Successfully Secures Return of Over $1.2 Million Withheld by PBM on Behalf of Georgia Pharmacy

Frier Levitt successfully assisted a Georgia-based pharmacy in securing reimbursement exceeding $1.2 million due and owed to the pharmacy from a major Pharmacy Benefit Manager (“PBM”). The PBM conducted multiple audits of the pharmacy including an invoice reconciliation, and despite only placing just over $100K at issue in the audit findings, the PBM erroneously withheld funds in the sum of $1.3 million. Frier Levitt attorneys submitted appeal responses challenging the audit findings and demanded return of the reimbursement inappropriately withheld by the PBM in excess of the discrepant amount. Ultimately, the PBM released the funds to the pharmacy.

PBMs will often withhold payments owed to pharmacies during an ongoing audit. In doing so, they may place the pharmacy on an indefinite payment withholding, typically until initial audit findings are released or the discrepant amount has been fully recouped. Further, while pharmacies should contest any and all payment withholding, pharmacies must demand that PBMs return any funds withheld in excess of the amount at issue in the audit findings. While PBMs typically refrain from withholding payments until the initial audit findings are issued, the PBM in this instance continued withholding payments owed to the pharmacy far after the initial audit findings were issued. In addition, the amounts withheld by the PBM were extremely disproportionate in comparison to the amount at issue. Unfortunately, tactics like the ones deployed here are becoming increasingly common.

This case study highlights the importance of pharmacies utilizing the contractual appeal rights outlined in their agreements with PBMs to combat erroneous audit findings, regardless of the purported clawback amount. Pharmacies often allow PBM audit findings to go uncontested due to seemingly insignificant amounts at issue. However, as indicated by this matter, in some instances, PBMs will ignore the amounts at issue and arbitrarily withhold funds from pharmacies with seemingly no limit. 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. With increasing regularity, PBMs are relying on prior audit results to justify termination of pharmacies from their networks, even if those adverse audit findings are from years prior. As such, pharmacies should combat unjustified audit findings and PBM actions to the fullest extent.

How Frier Levitt Can Help

Regardless of the size of your pharmacy or the amount at stake, Frier Levitt is ready and able to assist you in successfully challenging PBM abuse of your pharmacy. Our life sciences attorneys are prepared to provide guidance as your pharmacy prepares for audits as well as take an aggressive approach to fight for your rights following a PBM audit. If you have questions or need help fighting adverse PBM actions, contact us to speak to an attorney.