In the recent past, there has been an increased scrutiny over COVID-19 Home Test Kits (the “Test Kits”) filled and dispensed by pharmacy providers. Indeed, the U.S. Department of Health and Human Services Office of Inspector General issued a press release warning the general public about potential schemes involving the Test Kits. Likewise, Pharmacy Benefit Managers (“PBMs”) have increased their audit activities over the Test Kit claims. The press release also includes first-of-their-kind charges against suppliers of COVID-19 over-the-counter tests. Medicare began to cover these kits in April 2022 for beneficiaries who requested them, as these kits were provided to slow the spread of the deadly virus. However, wrongdoers sought to exploit the program by repetitively supplying patients and, in some instances, deceased patients, with dozens of COVID-19 tests that were never requested. In the Middle District of Florida, a physician and a marketer were recently charged for allegedly unlawfully purchasing Medicare beneficiary identification numbers and shipping never-requested over-the-counter tests to beneficiaries throughout the country, resulting in over $8.4 million in fraudulent claims to Medicare.
Both the government and PBMs focus on, among other things, patient consent/request, proof of delivery (or signature log), medical necessity, supplier and inventory, and marketing arrangements (if any) between a pharmacy and a third-party marketing company involving the Test Kits. Pharmacies who fail to adequately respond to government investigations or PBM audits face sanctions including, without limitation, monetary penalty, network termination, or revocation of billing privileges. Ramifications beyond the aforementioned sanctions in certain instances. For example, eighteen defendants across nine federal districts were charged for their alleged participation in these fraud schemes, resulting in over $490 million COVID-19 related false billings to federal programs and theft from pandemic assistance programs.
The success of any audit appeal is heavily reliant on the documentation a pharmacy can provide, especially in cases involving Test Kits, as certain documentation, like showing proof of delivery, are more difficult to obtain for these products. It is imperative that pharmacies retain ample documentation regarding COVID-19 Home Test Kits.
How Frier Levitt Can Help
Frier Levitt has decades of experience handling investigations or audits conducted by the government or payors including PBMs. Regardless of the size of your pharmacy or the amount at stake, Frier Levitt is ready and able to assist you. 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.
