Medicare Part D audits: Is your pharmacy prepared?

February 15, 2011

Controlling the expensive price tag of Medicare is an ongoing concern of both the Obama administration and Congress. Therefore, any Medicare provider can expect an audit. Is your pharmacy prepared?

Key Points

With the opening of the 112th Congress, there is considerable uncertainty on how healthcare reform will progress. However, there is one thing of which you can be certain: With Medicare Part D plan sponsors under scrutiny from the Centers for Medicare & Medicaid Services (CMS), which has oversight of all aspects of the program's administration, pharmacy audits will continue and possibly even increase in the future. Is your pharmacy prepared?

The Medicare program cost $509 billion in 2009 and had 46.3 million beneficiaries, according to the most recent Medicare Board of Trustees Report, issued on August 5, 2010. It is the nation's largest federally funded health-insurance program. Controlling the cost of the program is an ongoing concern of both the Obama administration and Congress. Therefore, any Medicare provider can expect an audit. According to statistics captured in 2009 and released in 2010, 44% of audits targeted hospital pharmacy records; 29% targeted long-term-care facilities; and 21% targeted community pharmacies.

"All sponsors are required to have a comprehensive plan to detect, correct, and prevent fraud, waste, and abuse. Medicare Part D audits help ensure that procedures and reimbursement mechanisms are consistent with contractual and regulatory requirements," said Daniel B. Frier, Esq., founding partner, Frier Levitt, LLC, located in New York and New Jersey.

Pharmacies participating in the Medicare Part D program should be aware of 2 types of possible audits: Desk audits and field audits.

Desk audits use automated means to review pharmacy claims and encounter data. This type of audit can include reviews of payment reports, drug utilization, physician prescribing patterns, and geographic prescribing reports.

Field audits are performed onsite at the pharmacy and involve physical observations, prescription reviews, and checks for compliance with Part D regulations and procedures.

Field auditors will typically review the following:

Bielinski said that onsite audits include general physical observations. Among other things, these observations check for and review:

Bielinski noted a trend in some general findings in recent years. These findings include: