Audited by a PBM? Here's what you should do


how to survive an audit from third party programs



Audited by a PBM?
Here's what you should do

There are many reasons a pharmacy benefit manager may audit your pharmacy. But no need to worry, according to H. Edward Heckman, president of Pharmacy Audit Assistance Service, Stoughton, Wis. There are measures pharmacists can take to successfully survive such an audit.

Speaking to attendees of the National Community Pharmacists Association/Chain Drug Marketing Association Rx Expo 2001, held recently in Las Vegas, Heckman explained that a third-party plan may audit your pharmacy for any of the following reasons: brand overutilization; DAW (dispense as written) patterns; generic utilization; average cost per claim, patient, or family; number of Rxs per patient or family; incidence of specific drugs; refill patterns by the day of the week, by prescriptions, or by drug class; percentage of claims that are adjudicated and usual and customary; and physician ID numbers "that are the patterned ones that keep popping up as the cheater ID numbers. And these are only the tip of the iceberg. You can't figure out enough ways to outfox the third party," he said.

• What should you do if your pharmacy is audited? Heckman gave the following advice:

• Exhibit a positive, pleasant, polite, and professional demeanor with the third parties.

Contact the third party and discuss your audit.

Heckman went on to say that there are many new companies sprouting up that do nothing but audits. "Keep in mind that you have no contractual relationship with these companies and have no direct one-to-one responsibility with them." You must receive written notification from the contracting PBM or insurance company with whom you have a provider agreement for a third-party contract, he said, and you have a right to contact an attorney if there is a surprise audit. Everyone has the right to fair treatment and due process, including a reasonable notice of your audit and an audit scheduled for a mutually convenient time.

Heckman said that because of former President Clinton's patient-privacy laws, "there's a huge issue here that's going to get larger—patient confidentiality. Does your contract or plan manual allow for subcontracting services? If it does not, then it should be very difficult for that third party to hire an outside audit company," he said.

If your pharmacy is audited, Heckman made the following recommendations:

• Confirm some of the audit procedures, such as the duration of the audit, how many auditors will be present, and whether hard-copy prescriptions or signatures on signature logs will be audited. "If the health plan is a 100% co-pay cash card program, it may not be ethical for the third party to audit and recoup money it never paid to the pharmacy in the first place," he cautioned.

• Be present during the audit, and make sure you are scheduled off the prescription counter so you can work with the auditors during the audit. "You find the Rxs the auditor is interested in looking at. You find the signatures for proof of delivery of Rxs that the auditor is interested in seeing. The third party is counting your money," Heckman cautioned.

It is important to safeguard sensitive patient information during an audit. "In the old days, the auditor would sit down in a room and you'd say, 'Here are the Rx files, and the auditor would go through the ones they wanted. Legally, the only thing the auditor should look at are those prescriptions billed to the plan the auditor is working for. The auditor is not entitled to see other prescriptions—that is patient-sensitive information. To view prescriptions not billed to that participating plan is absolutely wrong," he said.

Heckman shared the following strategies for minimizing the everyday legal risk to a pharmacy from participation in a third-party prescription program:

• Get patient permission and an authorization from the patient first if you want to call the doctor to get an OK on a refill. "Educate patients. They could have said 'Yes' or 'No' before you call that doctor for that authorization for refill. The third party is going to have to have releases from the patients for all the Rxs it wants to look at in an audit."

• With telephone Rxs, take extra care and extra time. Make sure you have complete information and are fully documented on the hard-copy Rx; when you are audited, the auditor wants to see the hard-copy Rx. When you generate new Rx records from old ones, make sure your computer documents the DAW code you transferred on the part of the label that goes to the Rx. "Train your computer to print 'DAW' and then the code number," said Heckman.

• When a patient wants a brand-name drug, have an appropriate rubber stamp available to stamp the request record, and then fill in the drug name. "Third parties will mail letters to patients and ask them if they received Rxs. People forget they received things, and especially if they think they are going to get in trouble," said Heckman.

• Fill and bill Rxs as they are written. Take the steps to legally generate Rxs that match plan parameters, and record what was billed on-line in terms of days' supply and maximum quantity. Each state has different rules and regulations. Know your state's practice and what you are required to do to generate these Rxs.

• Hold an exit interview with the auditor. "It's your right to know any and all discrepancies that this auditor has detected," said Heckman.

• When you are audited, it is important that you respond to the discrepancies. "Your goal should be to have zero recoupment in any audit you are involved in, no matter how small the discrepant amount," said Heckman.

• File timely responses to your audit discrepancies, and make sure you follow the third party's format.

What kind of documentation is acceptable? "That 's for you and the third party to come to a meeting of the minds over, because you and the third party have a contractual relationship," concluded Heckman.

Sandra Levy


Sandra Levy. Audited by a PBM? Here's what you should do.

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