Pharmacy audits are complex and burdensome experiences for any pharmacy owner. Due to the serious implications for small and independent pharmacies, it is important to retain competent and experienced legal counsel upon the notice of the audit rather than after you’ve received the auditor’s report to minimize the damage and protect your legal rights.
In the process, a pharmacy will typically receive notice of an audit by phone or mail from a Pharmacy Benefit Manager (“PBM”) notifying the owner that an audit and compliance contractor will be visiting the pharmacy to perform an audit. The auditors are hired by PBMs such as Express Scripts and CVS Caremark, in addition to Medicare Part-D and Medicaid.
While pharmacy audits may appear harmless, they often carry steep financial consequences and the potential for criminal action in the event of fraud or submission of false claims.
Prior to arrival, the PBM auditor may request a copy of all or some of the prescriptions that will be examined. The auditor will be reviewing a multitude of documents looking for discrepancies and inconsistencies which may be grounds for payment adjustment. Specifically, an auditor will likely examine:
Generally, the PBM auditor is looking for anything that may constitute improper payment, duplicate payment, fraud or even substitution of name-brand with generic drugs. Any discrepancies found will be subject to a payment adjustment and the pharmacy could end up being asked to pay the difference to the insurer. Notice of any adjustment will come in the form of an audit report sometime after the audit itself.
After receiving the audit report from the PBM auditor, the pharmacy usually has thirty (30) days, unless the contract specifies otherwise, to appeal the payment adjustments and findings by submitting an explanation and any supporting documentation. The PBM will typically inform the pharmacy the adjustment will come from future payments, often putting a significant financial strain on small and independent pharmacies.
At Chapman Law Group, our national pharmacy audit attorneys have been serving pharmacists, pharmacy owners, pharmacy technician, and drug/device manufacturers and distributors for more than 35 years.
Our national attorneys for pharmacies and pharmacist practices are located in our four offices:
Reach out to us to learn more about our pharmacy audit services.
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