Express Scripts Pharmacy Audit/FWA Defense Attorneys

Express Scripts, Inc. and Medco (collectively “ESI”) operate one of the largest Pharmacy Benefit Managers (“PBM”) in the country. ESI monitors their network pharmacies’ performance mainly through Fraud, Waste and Abuse (“FWA”) investigations on behalf of its Plan Sponsor/Plan clients, one of which includes its parent company, Cigna. Many states have enacted Pharmacy Audit Laws the provide substantial protection to pharmacies from abusive PBM audit practices. However, by necessity, many of these State Pharmacy Audit Laws contain exceptions permitting more aggressive PBM action where the PBM is investigating FWA. We have spotted a trend whereby nearly all PBM audits are “in the name of FWA” investigations. Pharmacies must understand their rights to challenge FWA investigative findings.

ESI Investigative Findings/Penalties

ESI’s investigative findings may not only lead to recoupment of reimbursement, but also other non-monetary sanctions including, without limitation, network termination.

During a routine FWA investigation, ESI will review claim-specific information about a set of prescriptions and request a host of documents from the pharmacy. ESI will also conduct invoice reconciliation review by comparing the purchases made by the Pharmacy to the quantity of billed claims. Examples of inventory investigation documentation routinely requested by ESI include:

  1. Photocopies (front and back) of original hardcopy prescriptions/physician order sheets, including back-slaps or any computer-generated stickers.
  2. Summary of all purchases, returns, and credits from wholesalers, which should include:
      1. NDC
      2. Purchase/Invoice Date
      3. Return Date
      4. Invoice Number
      5. Description/Drug Name
      6. GCN
      7. Item Size/Item Form
      8. Total Quantity Shipped
    1. Total Quantity Returned or Credited
    2. Grand Total Quantity Shipped
  3. Proof of copay collection (including receipts, canceled checks, verification of credit card transactions, and bank deposit slips).

ESI also issues a questionnaire associated with specific prescriptions wherein pharmacies are asked to provide responses to a number of questions relating to, among other things, prescription validation procedure, marketing arrangement relationship, and marketing activities.

Based on ESI’s review of the documents provided by the pharmacy, ESI will issue “Investigative Findings”. Some of the examples of ESI’s Investigative Findings that may result in full/partial recoupment of claims include the following:


Supporting Documents

Invalid Documentation

Failure to provide supporting documents to cure deficiencies noted in the prescription.

Invalid Prescription Transfer

Failure to provide documents to demonstrate that prescription transfer contained all required elements defined by applicable Federal and/or State law, and/or ESI Provider Manual.

Insufficient Purchase Invoice

Failure to provide complete purchasing invoices for claim validation.

Incorrect Quantity

Failure to provide documents that support quantity billed when it is different than the quantity prescribed.

Missing Prescription

Failure to provide hardcopy prescription or equivalent documents. 

No Signature Log

Failure to provide signature logs signed by patients or patient representatives.

Prescriber/Patient Denial

Failure to demonstrate that a prescription was authorized or written by the prescriber. Failure to demonstrate that the patient requested or received a prescription.

Refill Too Soon

Failure to provide documents that support filling refills.

Unauthorized Mailing

Failure to provide documents that justify mailing prescriptions outside of the state where the pharmacy is located. 


Challenging ESI Audit Findings/Penalties

When facing ESI’s FWA Investigative Findings, pharmacies should be aware of ESI’s FWA investigation standards set forth in the Provider Manual. State Pharmacy Fair Audit Laws may not be applicable to FWA investigation when challenging Investigative Findings. Therefore, it is important that the pharmacies understand their rights granted under the ESI Provider Manual as well as applicable Federal/State laws. Failure to respond to FWA investigations or other non-compliance with ESI’s Provider Manual and appeal processes may result in clawbacks as well as other penalties, including network termination.

ESI may impose additional penalties upon the pharmacy besides recouping the discrepant claims’ reimbursement amount. Such penalties may include Pharmacy Network Termination (where the pharmacy is terminated from ESI’s Pharmacy Network for a set period, which may range from 1 to 5 years). It would be wise for the pharmacies to consult with legal counsel to challenge ESI’s network termination as there are tools such as Any Willing Provider Laws that are available to the pharmacies. In the event of termination, the pharmacy must begin preparing for readmission into ESI’s Pharmacy Network as ESI tracks Audits’ history. It is imperative when seeking readmission into ESI’s Pharmacy Network, that pharmacies demonstrate they have taken the necessary steps to “cure” all discrepancies that formed the basis of termination. Such action could include a “corrective action plan” drafted with both clinical and legal factors.

Speak with Seasoned Pharmacy Attorneys Today

Dealing with a PBM audit is a daunting task. It becomes more challenging when PBMs such as ESI require documents that are not readily available from the pharmacies and unilaterally decide types of “reasonably necessary” documents that allegedly demonstrate the pharmacy’s compliance.

Frier Levitt has a deep bench of experienced healthcare attorneys, including several pharmacists- and clinician-attorneys, who have been assisting pharmacies throughout the country on a variety of legal issues including, but not limited to, disputing Payment Suspension, Adjudication Suspension, Network Termination, Audit Findings, FWA Investigative Findings, and Government Investigations. Contact us today to speak with an experienced Pharmacy Attorney.