With a steady increase in PBM audits and network terminations, pharmacies should continue to review their internal policies and procedures and complete regular compliance reviews. To that end, in the event of an identified oversight, pharmacies should consider implementing corrective measures and documenting such measures for potential future scrutiny during a PBM audit. Similarly, if a PBM identifies any discrepancies in the course of an audit or investigation, pharmacies should consider formulating a formal corrective action plan, as it may help resolve the audit discrepancy or prevent further action against the pharmacy.
What is a Corrective Action Plan?
A corrective action plan is a clear and comprehensive procedure which details the steps to be taken by the pharmacy in order to ensure that previous errors are not repeated in the future. While it may seem similar to a general standard operating procedure or policy, a corrective action plan should be more specific and lay out the exact steps that a pharmacy will take in order to ensure its compliance with the terms and conditions of their PBM’s manual or contract going forward. For example, if a pharmacy has undergone an invoice reconciliation audit and lacks proper records of its purchases from wholesalers, the pharmacy’s inventory management policy may broadly outline practices related to purchases and payments to wholesalers, but a corrective action plan becomes essential. This corrective action plan will explicitly outline how the pharmacy will identify specific wholesalers for purchases, detail the information to be included in purchase records, establish procedures for record storage, and address unforeseen circumstances like nationwide drug shortages or issues with wholesalers.
How Can a Corrective Action Plan Help?
While proper record maintenance and overall compliance with the terms and conditions set forth by a PBM provider agreement are certainly the ideal way to avoid unfavorable audit results, there are of course unforeseeable circumstances in which discrepancies are unable to be resolved in their entirety. Similarly, there may be circumstances in which a PBM seeks to terminate a pharmacy based on concerns regarding its practices and operations or severe discrepancies identified by a recent audit that are unable to be properly accounted for or explained. In these situations, the development and implementation of a corrective action plan that specifically targets the practices and procedures which may have led to the error can be persuasive against PBM allegations of wrongdoing. In the context of audits and terminations, corrective action plans serve as an assurance to the PBM that the discrepancies identified are not repeated, or that any concerns regarding the pharmacy’s future participation in its network are resolved. While it acknowledges previous errors or non-compliant conduct, a corrective action plan may still reflect favorably on a pharmacy. In fact, while corrective action plans may be proactively implemented by a pharmacy, PBMs themselves often explicitly request the development and implementation of corrective action plans in lieu of termination or other disciplinary action.
What Should a Corrective Action Plan Achieve?
It is important that corrective action plans specifically target the types of conduct which caused the discrepancies alleged in an audit and outline the steps that will be taken to ensure that the problematic conduct which contributed to the discrepancies does not reoccur. When considering the development and implementation of a corrective action plan in the face of an audit or termination, pharmacies should take extra care to review pharmacy practices and identify areas that need strengthening. Specifically, the pharmacy should work to identify how the mistake occurred and think of safeguards to implement that would prevent the mistake from occurring in the first place. In situations where a PBM has explicitly requested that a corrective action plan be implemented, pharmacies should be sure to address each of the elements laid out by the PBM. Furthermore, a corrective action plan should clearly indicate to the PBM how the plan will be implemented and followed through by the pharmacy. For example, a correction action plan might include specific details regarding how staff members will be trained on the plan, as well as any other preventative measures such as regular assessments of pharmacy records or performance of invoice reconciliations in order to confirm compliance with the corrective action plan on an on-going basis. This will provide further assurance to the PBM that the plan will be strictly adhered to. Ultimately, corrective action plans should ensure the pharmacy’s continued compliance with its obligations as a pharmacy provider.
How Frier Levitt Can Help
If your pharmacy requires assistance in developing or reviewing your policies and procedures, or developing a corrective action plan, Frier Levitt can help. Frier Levitt has experienced attorneys that can assist your pharmacy in achieving compliance and addressing any PBM audits or network terminations. Contact us today to speak with an attorney.
