Frier Levitt attorneys successfully challenged a national PBM’s attempt to terminate a New York pharmacy after an audit allegedly identified inventory shortages, or instances in which the quantities of drug products billed by the pharmacy were not supported by the pharmacy’s purchase history within a certain period of time. In addition, the audit included one sole discrepancy related to a member denial. Through the representation of Frier Levitt attorneys, the pharmacy was able to successfully navigate the appeals and dispute resolution process afforded to the pharmacy under its provider agreement, and ultimately achieved a resolution that allowed the pharmacy to continue its participation in the network.
By way of brief background, the pharmacy underwent an “investigative audit” with the PBM, and the PBM placed at issue less than $8,000.00 over alleged inventory shortages. However, such inventory shortages were solely the result of the PBM’s own refusal to consider the quantities received from local pharmacies, rather than the pharmacy’s failure to maintain a sufficient quantity of the drug products billed or maintained in its inventory, or even its failure to be able to produce documentation demonstrating such purchases. Moreover, there was only one discrepancy related to a member denial that a patient allegedly denied receiving the prescription that was filled by the pharmacy, despite documentation that demonstrated the pharmacy obtained confirmation of the patient’s authorization prior to do so.
The PBM was unmoved by the pharmacy’s appeal documentation during the course of the audit and proceeded to terminate the pharmacy. Through the appeal of termination and dispute resolution process, Frier Levitt emphasized the documentation submitted in order to substantiate the purchases which the PBM had continually refused to consider was in fact sufficient to resolve the alleged findings, and importantly, the termination. To support its position, Frier Levitt worked to confirm that the transfer of the medications at issue from another pharmacy prior to its closure complied with New York law, as well as the terms and conditions of the PBM’s provider manual. Once the validity of these transactions was confirmed, Frier Levitt used the PBM’s own terms and conditions to further highlight the unreasonableness of the PBM’s refusal to consider inter-pharmacy purchases, arguing that such refusal constituted a direct fact a violation of its provider manual. Shortly after the submission of the pharmacy’s formal appeal, the PBM notified the pharmacy that it would rescind its decision to terminate it from its network in exchange for the implementation of certain corrective action measures.
This case demonstrates that the issuance of a notice of termination does not necessarily signal the end of a pharmacy’s network participation. With knowledge of administrative and contractual rights afforded to a pharmacy, along with the guidance of effective legal counsel, pharmacies can challenge attempts of network termination from PBMs.
How Frier Levitt Can Help
If your pharmacy has received a PBM request for the implementation of corrective action measures or has recently received audit findings that you believe are likely to result in further disciplinary action, contact us to speak with an attorney.
