For community pharmacies, dealing with a Pharmacy Benefit Manager (“PBM”) audit has become a significant part of their day-to-day operation. It requires a pharmacy to spend scarce resources to respond to an audit but also to challenge any negative audit findings. Meanwhile, PBM audit findings can result in reimbursement clawback as well as additional sanctions such as payment suspension and network termination. In other words, PBM audit findings can cause devastating financial setback to the pharmacies. Yet, there is very little known about PBMs’ auditing standards.
As a threshold matter, pharmacies have an opportunity to appeal audit findings in which PBMs identify various discrepancies associated with prescription claims and/or drug inventory. In order to reverse the PBM-alleged discrepancies, the pharmacy is tasked to submit supporting documents that address the discrepancies. Otherwise, the PBM will uphold the discrepancies and clawback the entire amount of reimbursement associated with the discrepant claims. Notably, PBMs accept certain “types” of supporting documents when reconsidering the audit findings. These acceptable documents are generally found in the Audit Guideline section of the PBM Pharmacy Provider Manual. However, the Audit Guideline is merely a list of acceptable documents that is subject to change contingent upon the PBM’s discretion. It does not provide any details as to the PBM’s auditing standards that the auditors would have (and should have) followed when reviewing the pharmacy’s supporting documents. Likewise, the audit findings do not offer any explanation when the PBM rejected the pharmacy’s supporting documents. At most, the audit findings would only indicate that the documents submitted by the pharmacy do not meet the Audit Guideline. More troubling, PBMs inconsistently apply the Audit Guideline even within the same audit. Consequentially, the pharmacies are forced to combat incorrect audit findings with inflated discrepant amount. Not only that, the pharmacies can be charged additional audit fees, which are usually percentage of the discrepant amount. Therefore, the lack of (or vague and ambiguous at best) PBM auditing standards places unnecessary burden upon the pharmacies.
How Frier Levitt Can Help
It is imperative that pharmacies are aware of their rights when combating PBM audits. If your pharmacy is facing an audit and/or recoupment from PBMs, contact us today to speak to an attorney. Our Life Sciences team has the tools and experience to assist pharmacies in their audit disputes and to advise clients on proactive measures to prevent audit recoveries and network interruption.
