Catamaran Auditing and Reviewing Compound Pharmacy Contracts for Fee-Splitting and Price-Rolling

It’s that time of year again… As the PBMs gear up for 2015, Frier Levitt is noticing a very recent trend with Catamaran auditing and reviewing compound pharmacy contracts for “Price-Rolling” and “Fee-Splitting”. Generally, “Price Rolling” and “Fee-Splitting” refer to compound pharmacy practices designed to avoid the prior authorization process after a compound claim rejects at the POS due to the reimbursement exceeding a given plan’s monetary threshold limit. Instead of going through this prior authorization process, Catamaran suspects that many compounders: (1) adjust their U&C down until they get the claim to adjudicate (i.e., “price rolling”), or (2) reduce the quantity or days supply of the medication to get the claim paid (i.e., “fee splitting”). Catamaran views “price-rolling” and “fee-splitting” as violations of the pharmacy agreement and manual, and is ramping up in 2015 to audit and recoup monies form compound pharmacies for engaging in these practices.

In addition, Catamaran’s Pharmacy Membership Evaluation Committee (PMEC) is sending out a wave of letters to compound pharmacies that it suspects are engaging in price-rolling and/or fee-splitting to determine what course of action it may take against the compounder’s contract. Catamaran is sending these letters our directly to compounders and also through PSAOs. According to Catamaran’s PMEC, a compound pharmacy that engages in either of these practices is subject to discipline which ranges from placing the pharmacy on a Corrective Action Plan (CAP) to network termination.

If you have received a letter from Catamaran regarding an audit, or Catamaran’s PMEC referring your contract for review due to price-rolling and fee-splitting, Frier Levitt can help. We are presently assisting multiple pharmacies in challenging these audits and preventing network termination. Contact Frier Levitt for assistance.

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