An Ohio-based pharmacy client was recently placed on payment suspension due to alleged inventory shortfalls during a Pharmacy Benefit Manager (“PBM”) audit before initial audit results were even issued, leaving the pharmacy with limited to no information on the anticipated recovery amount and the basis of any perceived shortfalls. During the course of the audit, the pharmacy had submitted all of the requested inventory information, including purchase reports directly from its wholesalers. Through the help of effective counsel at Frier Levitt, the pharmacy was able to receive initial audit results expeditiously and worked in collaboration with its counsel to provide additional documentation, including but not limited to pedigree documentation and proof of payment in support of the pharmacy’s purchases to resolve the alleged discrepancy amount in excess of $250k.
PBMs will often withhold payments owed to pharmacies during an ongoing audit. In doing so, they may place the pharmacy on an indefinite withholding up until the initial audit results are released. If the amount withheld is greater than the amount at issue in the audit results, the PBM will often release the excess back to the pharmacy. However, the PBM will continue to withhold the audit discrepancy amount, likely along with an audit fee, despite the pharmacy having no opportunity to appeal the audit results and lower the audit discrepancy amount. Once the pharmacy appeals the initial audit results and hopefully sees a reduction when the PBM issues final audit results, the PBM will release the difference in the discrepancy amounts back to the pharmacy. However, the release of the difference could take several weeks.
Frier Levitt was successful in assisting the client in expediting the appeals review process and coordinating with the pharmacy and the PBM to resolve the initial results in their entirety. Soon after receiving final audit results that confirmed there were no outstanding discrepancies, the pharmacy received a release of the withheld payments.
If your pharmacy is experiencing payment withholding due to a PBM audit or is undergoing an audit, contact Frier Levitt to speak to an attorney.
