As a result of Frier Levitt’s intervention, a Texas pharmacy is now able to continue its participation in a major pharmacy benefit manager (PBM) provider network. Recently, Frier Levitt successfully resolved a Texas pharmacy’s pending termination arising out of allegations that prior authorizations submitted to the PBM were improper and that prescribers had denied authorizing certain claims.
As discussed in Frier Levitt’s recent article regarding increased PBM scrutiny of prior authorization practices, PBMs continue to aggressively investigate pharmacies over alleged prior authorization irregularities, often pursuing substantial recoupment demands and network termination based on those findings.
How an Unresolved PBM Audit Led to Termination
The pharmacy initially underwent an investigative audit by a major PBM concerning claims submitted over an extended period. Following the audit, the PBM issued preliminary findings alleging prior authorization discrepancies and prescriber denials. Before retaining Frier Levitt, the pharmacy independently appealed both the preliminary and final findings and submitted substantial supporting documentation in an effort to address the allegations. Despite those efforts, the PBM upheld the findings without materially reducing the amount at issue and subsequently issued a notice terminating the pharmacy from the PBM’s network.
After receiving the termination notice, the pharmacy retained Frier Levitt to challenge the PBM’s decision. Frier Levitt conducted a detailed review of the audit materials, claims data, and supporting documentation, including prescriber records and attestations that had not been properly considered by the PBM. Frier Levitt then fully utilized the appeal rights afforded under the PBM’s provider manual by submitting a formal appeal and engaging in the PBM’s dispute resolution process.
Ultimately, Frier Levitt successfully represented the pharmacy throughout the appeal process and related discussions with the PBM concerning both the termination and the underlying audit findings. In doing so, Frier Levitt emphasized the pharmacy’s good-faith efforts, the sufficiency of the supporting documentation submitted, and the pharmacy’s commitment to compliance as a participating provider.
Successful Recission of Network Termination
Following Frier Levitt’s intervention and continued advocacy, the PBM ultimately agreed to rescind the pharmacy’s pending network termination and allow the pharmacy to remain in the network, subject to additional oversight conditions intended to address the concerns underlying the audit findings. While PBMs commonly require pharmacies to agree to additional terms and conditions as part of resolving a pending termination, it is important for pharmacies to carefully evaluate and negotiate such conditions to ensure they are reasonable, appropriately tailored, and operationally feasible.
In this matter, Frier Levitt worked with the pharmacy and the PBM to negotiate terms that appropriately addressed the PBM’s concerns while allowing the pharmacy to continue operating as a participating provider in the network under reasonable conditions.
The Importance of Engaging Effective Legal Counsel
This matter highlights an increasingly common issue facing pharmacies: PBMs are frequently escalating audit findings into termination actions, even where pharmacies have cooperated with the audit process and provided supporting documentation. In many instances, pharmacies that initially attempt to navigate the audit and appeal process without experienced counsel may later face significant challenges when the matter escalates to network termination.
Importantly, this case also demonstrates that PBM termination decisions are not necessarily final. Even where a PBM has upheld its findings and issued a termination notice, pharmacies may still leverage contractual rights and applicable law, which often provide viable grounds to challenge the decision and negotiate a favorable resolution.
How Frier Levitt Can Help
PBM audits and investigations involving prior authorization practices, prescriber verifications, and claim submission integrity continue to increase in frequency and complexity. Pharmacies facing audit findings, recoupment demands, or threatened network termination should carefully evaluate their response strategy early in the process.
Frier Levitt regularly represents pharmacies nationwide in PBM audits, investigations, appeals, and network termination disputes, including matters involving alleged prior authorization irregularities, inventory discrepancies, copayment issues, and fraud, waste, and abuse allegations.
If your pharmacy has received PBM audit findings, a recoupment demand, or a notice of termination, Frier Levitt may be able to help. Contact us to speak with an attorney.
