Recently, Frier Levitt assisted a North Carolina-based pharmacy client in challenging a major Pharmacy Benefit Manager’s (“PBM”) audit findings and successfully reversed approximately $560,000.00, representing 99% of the amount at issue. In the audit findings, the PBM asserted discrepancies in delivery of medications allegedly not showing a clear link between the prescription number or medication name, member name, date of service, and tracking number. Under Frier Levitt’s guidance, the pharmacy gathered significant supporting documentation to disprove the overwhelming majority of the PBM’s allegations, leading to the PBM reversing over 99% of the discrepancies when it issued the final audit findings. Frier Levitt continues to work with the pharmacy to address the remaining discrepancies and achieve a favorable resolution.
While PBMs are increasingly taking disciplinary actions against pharmacies, pharmacies have several effective tools at their disposal to push back against PBM overreach. One of the most important steps pharmacies can take is to implement and maintain comprehensive policies and procedures that ensure compliance with the requirements set forth in PBM Provider Manuals. By doing so, pharmacies can reduce the risk of unfavorable audit outcomes or severe sanctions and, if action is taken by a PBM, they are better positioned to respond effectively.
Moreover, PBM Provider Manuals generally include contractual appeal and dispute resolution processes. These procedures give pharmacies the right to challenge any actions or allegations made by PBMs. Taking advantage of these appeals processes is essential, not only for contesting terminations, but especially in response to audit findings. Pharmacies are strongly encouraged to appeal all audit findings, regardless of the financial impact, as even minor findings can lead to more significant PBM actions if left unchallenged. Timely appeals can result in the reversal of unfounded findings, the release of improperly withheld payments, and a reduced risk of future network termination.
Pharmacies must also be aware of the specific types of documentation that each of their PBMs require to address adverse audit findings. Here, the Pharmacy submitted sufficient supporting patient attestations, copies of the medical and clinical records as evidence of the existence of valid signature logs, and documentation to confirm the Pharmacy’s assertion that the drug products were received by and administered to the correct patient. Therefore, pharmacies who are contracted with a PBM must ensure they frequently maintain proper documentation that it received all required authorization prior to filling and dispensing the prescriptions associated with any claims, must maintain invoice statements with drug manufacturers, and maintain documentation that drug products were received by and administered to the correct patient.
This matter further demonstrates the importance of combating all and any PBM audit findings, as PBMs assert unnecessary discrepancies to use pharmacy audits as a source of revenue rather than ensuring compliance with applicable laws and contractual obligations. PBMs will use multiple adverse audit findings to justify terminating pharmacies from their network, so it is crucial for pharmacies to appeal PBM audit findings and attempt to reduce the amounts at issue to the fullest extent possible. Thus, seemingly “insignificant” amounts should be appealed to avoid additional future adverse actions by PBMs.
How Frier Levitt Can Help
Frier Levitt has decades of experience handling investigations and audits conducted by the government or payors including PBMs. Regardless of the size of your pharmacy or the amount at stake, Frier Levitt is ready and able to assist you. Our experienced life sciences attorneys can guide your pharmacy in preparing for audits and take an aggressive approach to protect your rights. If you have questions or need help fighting adverse actions, contact us to speak to an attorney.
Frier Levitt provides strategic, industry-focused legal counsel tailored to your needs. Contact our team today to learn how we can help you.
