Part 1 of 4: Abusive PBM Audit Practices (Invoice Reconciliation Audit)

Pharmacy Benefit Mangers (“PBMs”) routinely conduct audits, whether it be on-site or desk-top audits, on the member pharmacies. By and through such audits, PBMs are supposed to monitor pharmacies’ performance and to capture improper payments made to the pharmacies. However, PBMs often go beyond the intent of the audit and utilize audit as a source of revenue. This article will discuss abusive audit practices involving invoice reconciliation audits by PBMs.

Invoice audits are generally narrow in scope, limited types of claims for a specific time-period. In an invoice audit, PBMs are looking to match purchase history of the pharmacy with the number of claims submitted by the pharmacy. PBMs request the pharmacy to provide, through the wholesalers, invoices and purchase summaries in general. Despite the relatively uncomplicated nature of invoice audit, PBMs have used different tactics to discredit valid purchase made by pharmacies. One very worrisome tactic we recently uncovered involves “wholesaler’s license.” More specifically, one of the largest PBMs conducted a desk-top audit of an independent pharmacy and identified discrepancies including drug invoice shortages. In response, the pharmacy provided invoices and purchase summaries that sufficiently address the alleged drug invoices shortages. However, in issuing final audit results, the PBM did not appear to take them into account. It was not until several further inquiries were made by this office that the PBM finally informed the pharmacy that it needed a confirmation as to whether the wholesaler maintained a valid distributor license. Notably concerning, the PBM did not include “verification of wholesaler’s license” as the underlying basis of drug invoice shortages alleged in the audit. To make matters worse, the PBM had already withheld large amount of money to offset the purported shortages.

How Frier Levitt Can Help?
PBMs clawback the entire amount of reimbursement on claims that were already dispensed by pharmacies. This not only cause significant financial harm but also disrupts the pharmacy’s day-to-day business. Pharmacies should emphatically contest audit discrepancies and demand transparency from PBMs especially when the pharmacy provided sufficient documentation to overturn the discrepancies. If your pharmacy is facing a PBM audit, contact Frier Levitt today to speak to an attorney.

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