Frier Levitt recently assisted an Illinois-based pharmacy in challenging a Pharmacy Benefit Manager’s (PBM) audit findings related to claims covered by TRICARE, and successfully reversed 100% of the alleged discrepancies. In the audit findings, the PBM asserted that prescriptions were discrepant due to insufficient or missing signature logs, meaning the pharmacy was improperly paid for these claims. Under Frier Levitt’s guidance, the pharmacy gathered supporting documentation and submitted a robust appeal response challenging the alleged discrepancies, particularly as the PBM withheld the funds despite the pharmacy’s timely submission of its administrative appeals. Leveraging Frier Levitt’s experience in addressing PBM audit tactics, the pharmacy submitted records demonstrating that the pharmacy did in fact maintain the required signature logs. Ultimately, the PBM reversed 100% of the audit findings.
The excessive audit findings seen in this case are examples of abusive PBM tactics that have become far too routine in pharmacies’ dealings with PBMs. Awareness of these practices and the available remedies is crucial to avoiding negative outcomes for your pharmacy.
How Pharmacies Can Protect Themselves from PBM Audit Overreach
While PBMs are increasingly taking disciplinary actions against pharmacies, pharmacies have several effective tools at their disposal to push back against PBM overreach. One of the most important steps pharmacies can take is to implement and maintain comprehensive policies and procedures that ensure compliance with the requirements set forth in PBM provider manuals. By doing so, pharmacies can reduce the risk of unfavorable audit outcomes or severe sanctions and, if action is taken by a PBM, be better positioned to respond effectively.
Moreover, PBM provider manuals generally include contractual appeal and dispute resolution processes. These procedures give pharmacies the right to challenge any actions or allegations made by PBMs. Taking advantage of these appeals processes is essential, not only for contesting terminations, but especially in response to audit findings. Pharmacies are strongly encouraged to appeal all audit findings, regardless of the financial impact, as even minor findings can lead to more significant PBM actions if left unchallenged. Timely appeals can result in the reversal of unfounded findings, the release of improperly withheld payments, and a reduced risk of future network termination.
This matter further demonstrates the importance of combating all PBM audit findings, as PBMs may assert unsupported discrepancies to use pharmacy audits as a source of revenue rather than ensuring compliance with applicable laws and contractual obligations. PBMs will use multiple adverse audit findings to justify terminating pharmacies from their network, so it is crucial for pharmacies to appeal PBM audit findings and attempt to reduce the amounts at issue to the fullest extent possible. Thus, seemingly “insignificant” amounts should be appealed to avoid additional future adverse actions by PBMs.
How Frier Levitt Can Help
Frier Levitt has decades of experience handling investigations and audits conducted by the government or payors, including PBMs. Regardless of the pharmacy size or the amount at stake, Frier Levitt is ready to assist. Our experienced life sciences attorneys can guide your pharmacy in preparing for audits and take an aggressive approach to protect your rights. If you have questions or need help fighting adverse actions, contact us to speak to an attorney.
