Frier Levitt Reverses 100% of PBM Audit Clawback for New Jersey Pharmacy Client

Frier Levitt recently assisted a New Jersey pharmacy client in successfully challenging a major Pharmacy Benefit Manager’s (“PBM”) audit findings and reversing 100% of the purported discrepancies. During the audit, the PBM asserted allegations involving invalid signature log documentation and improper billing practices. Under Frier Levitt’s guidance, the pharmacy gathered the requisite supporting documentation, and our attorneys submitted an appeal response highlighting the relevant facts and applicable law. After receiving the appeal response, the PBM reversed each attempted clawback and did not recoup any funds from the pharmacy.

PBMs often attempt to use routing audits as a tool to seek unwarranted recoupment of funds from their contracted pharmacies. Moreover, to overturn even unwarranted discrepancies, pharmacies are forced to adhere to the stringent requirements imposed by PBMs in their Provider Manuals. Consequently, even when the alleged discrepancies do not actually exist, PBMs will refuse to reverse the purported discrepancies without the precise documentation it requires—documentation that may not even be accessible to pharmacies in certain circumstances. Accordingly, pharmacies must adhere to proper document retention policies and procedures specifically designed to ensure the pharmacy maintains the necessary records to overturn unjustified discrepancies. For a discussion of the types of documents pharmacies should retain to combat some common discrepancy types, please see our recent article, Pharmacy Alert: Combating PBM Audits Through Supporting Documents.

Once a pharmacy ensures it retains the appropriate documents to address unwarranted discrepancy allegations, it is imperative that pharmacies utilize the contractual appeal process outlined in their agreements with PBMs to combat any all audit findings, regardless of the purported clawback amount. Oftentimes, pharmacies allow PBM audit findings to go uncontested due to seemingly insignificant amounts at issue. Critically, even if a PBM does not result in adverse action beyond the recoupment of monies from the pharmacy, PBMs keep track of their network pharmacies’ audit histories. With increasing frequency, PBMs attempt to rely on prior audit results to justify the termination of a pharmacy from its network if the pharmacy has adverse findings years later. In fact, Frier Levitt has even seen instances where a major PBM sought to justify a pharmacies termination due, in part, to audit findings that were roughly six years old. Thus, though small amounts may not seem “worth” disputing, failure to do so may serve as a basis for severe PBM sanctions, including network termination, down the road.

How Frier Levitt Can Help

Regardless of the size of your pharmacy or the amount at stake, Frier Levitt is ready and able to assist you in successfully challenging a PBM’s audit of your pharmacy. Our life sciences attorneys are prepared to provide guidance as your pharmacy prepares for PBM audits as well as an aggressive approach to fight for your rights following a PBM audit. If you have questions or need help fighting adverse PBM actions, contact us to speak to an attorney.