Audit Pharmacy Services

PBM Audit Best Practices : Tips for PBM Audits from an Industry Insider

The primary goal of the PBM Audit is to uncover discrepant claims in which the PBM will recoup money paid to your pharmacy. What most pharmacies do not realize, is that the results of these audits can potentially lead to a termination of your PBM Contract. All adjudicated claims are subject to audit regardless of the fact the claim paid. BSL offers proactive methods to help you mitigate the financial pitfalls you may encounter as the result of an audit. These measures will not only help decrease the potential for audit chargebacks but they will also show you how to run a more “PBM Provider Manual” compliant operation.

If your Pharmacy is being Audited or has been notified of an audit. Please click the box below, your responses will be immediately sent to our PBM Audit Specialist

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The key points in mitigating PBM audit findings include:

  • Proactive pharmacy procedures that are compliant under the guidelines of the individual PBM Provider Manuals+
  • Responding to audit requests effectively the first time
    • Organized
    • Complete
    • On Time

What the other audit services are not telling you:

Imagine you are driving in your car and to the best of your knowledge are obeying all traffic laws. The police pull you over and without providing you a reason for doing so begin to question you and demand to search your vehicle. You are within your rights to demand the reason you have been stopped and the refusal to answer any questions or submit to a search. Likewise, you would not begin to offer information to the officer on a whim.

PBM Auditors are very much the pharmacy claims police. You are required to provide the documentation requested per your Provider Agreement but, in many cases, it is the information you provide without realizing it either through additional questioning by the auditor or casual conversation can also be used against your business. Onsite auditors are the eyes and ears of the PBM because they physically enter your pharmacy. They may ask roundabout questions during normal conversation to fish for information and are observing the actions of your staff for any type of operating procedures that may not be within compliance of your provider agreement. If the auditor senses anything may not be compliant or wishes for a deeper investigation, they may refer your pharmacy to an investigative desktop auditor. Likewise, requesting the auditor provide nonroutine questions to you in writing will help ensure accurate and concise responses, something BSL can advise and guide you through.

BSL has extensive pharmacy, PBM, and legal experience which is leveraged to help your business run both efficiently and within compliance of your PBM Provider Agreements.

PBM Audits are a reality all pharmacies face, it is not a matter of if but when. Proactive measures include Pharmacy Operations review, Policies and Procedures, staff training, and ongoing compliance measures will help mitigate discrepant findings. Equally important however, is providing an audit response that is organized, complete, and on time. This first audit response is crucial as it can minimize audit related findings if done the right way, the first time. Contact BSL as soon as you receive an audit notification so we can help you prepare the first response to be the complete response.

Services

Pharmacy Operations- Prospective Audit Preparation

  • General Housekeeping
    • Maintain organized records of prescription hard copes/signature logs
      • If stored electronically ensure all staff is trained to properly produce records
    • Maintain readily retrievable copies of Pharmacist/Tech Licenses
    • If licensed in multiple states, keep readily retrievable copies of each license available
  • Inventory Management
    • Maintain list of Wholesaler contacts who can readily provide purchase invoices in the event of an audit
    • Delegate inventory ordering to a primary and secondary employee authorized to order inventory
      • When ordering Diabetic Supplies, the correct Retail NDC must be purchased, DME/Mail Order Only/NFRS Items must not be purchased unless the pharmacy is contractually allowed to bill for these items.
    • Purchases of NDC’s must match what is being billed
  • POS
    • Retain readily retrievable signatures for pickup confirmation
      • Electronic is the most efficient
      • Written Signature logs must be organized and readily retrievable
    • Implement a POS system that allows for readily retrievable proof of payment
      • Receipts should show:
        • RX Number
        • DOS
        • Payment Method
          • Cash
          • Check
          • Credit Card
            • Authorization
            • Last 4 of Card
            • Name
        • Delivery via Carrier (UPS, USPS, FedEx, etc)
          • Retain tracking and delivery confirmation
        • Local Delivery (Pharmacy Employee)
          • Patient Specific Files
            • Patient Attestation allowing delivery
            • Delivery Confirmation with signature
            • Payment Confirmation Method
  • Standard Billing Practices
    • Training of staff on proper billing of day supply
    • Provide list of medications commonly billed incorrectly (can be created using what is provided in the PBM Provider Manuals)
      • Common NDC’s misbilled can be flagged in the system to ensure proper billing
    • NDC Billed must be the NDC Dispensed
    • Documentation is crucial for ambiguous directions
  • Help prepare pharmacy specific Policies and Procedures if applicable
    • Proper Claims Submission
    • Inventory Management
    • Copay Collection
      • Utilization of Manufacturer Coupons (e.g. follow all coupon guidelines and will not be used on Federally or State Funded Programs or non-FDA approved items)
      • Patient Hardship Programs
    • Local Delivery/Out of State Shipping
      • Patient Consent
      • Retaining Delivery Confirmations
      • Local Delivery Logs
    • Compliance Program

Retrospective- Audit Response

  • Assess Initial Audit Notification
    • Timeline of Deadlines for Documentation Submission
    • Assess Documentation Requested
      • Hard Copies
      • Signature/Delivery Logs
      • Copay Collection
      • Pharmacy Licenses
      • Invoices
  • Advise on appeal response to Initial Audit Findings
    • Evaluate list of initial discrepancies
    • Formulate responses to inquisitive questions outside the norm of pharmacy claim submission
      • Business Operations
      • P&Ps
      • Corrective Action Plans
  • Advise on responses to respective PBM Pharmacy Membership Review Committee notification
    • Specifically address each type of audit finding
    • Corrective actions taken for each type of discrepant finding
    • Corrective Action Plan, P&P’s, Changes to Pharmacy Operations

Documentation for Response

  • Hard Copies
    • Organize copies of original hard copies or scans of requested prescription numbers
  • Signature/Delivery Logs
    • Provide copies of physical or electronic signatures
    • Provide delivery confirmation with tracking for all delivered medications
      • This is crucial in cases where the PBM may attempt to charge claims for shipping without proper licensure. Delivery confirmation will show the address the medication was delivered to. PBMs utilize a master member database which may show a state for a member the pharmacy is not licensed in. Various circumstances may lead to the member having filled at the pharmacy locally or a child may be in college in the state in which the pharmacy is located or licensed. This documentation is important to retain to show the entire picture and prevent needless claims from being charged back. The PBM will assume you have no nonresident state licenses until this information is provided and will determine that pharmacy services are being performed in the member resident state on file.
  • Copay Collection
    • Organize receipts showing:
      • RX Number
      • DOS
      • Payment Method
        • Cash
        • Check
        • Credit Card (some or all of these items)
          • Authorization
          • Last 4 of Card
          • Name on Card
    • Provide COB information including
      • Screenshot of COB from the pharmacy’s system showing a secondary was applied and the new applicable copayment
    • Patient Assistance Programs
      • Provide P&P for the program
      • Retain all applicable patient tax hardship information (W2, Tax Return, Pay Stub)
  • Pharmacy Licenses
    • Maintain copies of ALL nonresident licenses on file
      • It is crucial to provide this information to the auditor ASAP to prevent concerns of shipping without proper licensure that can lead to needless chargebacks and possible payment suspension
  • Invoices
    • Pharmacy should maintain a list of ALL Wholesaler (This includes Primary and Secondary Wholesalers as well as infrequently used Wholesalers for limited purchases) contacts they can communicate with to provide invoices DIRECTLY to the auditor. It is also important to provide invoices showing purchases up to one month prior to the audited time frame to present a better picture of the purchase history from the start of the audit to mitigate possible inventory shortfalls. The sooner all purchase invoices are provided during the initial audit, the better.
    • Be prepared to provide proof of business to business financial transaction for wholesalers that are not the major players such as Mckesson, Cardinal, HD Smith, etc
    • Purchase of Pharmacy Inventory (Closing Pharmacy)
      • Provide a detailed invoice of the Drug Names, NDC, and Quantities purchased
      • Provide proof of business to business financial transaction for the inventory and date purchased
  • All other types of documentation requested will be evaluated by the firm to prepare a response

Initial Audit Findings Response Assessment Based on Discrepancy Type

  • Invoice Shortages
    • Assess what was already provided to ensure no wholesalers were missed and that the proper time frame was submitted including one month prior to the audit period
    • Help prepare proof of business to business financial transaction if requested
    • Prepare explanation for limited purchases as they apply to pharmacy operations
  • Shipping without Licenses
    • Ensure all state licensure has been provided
    • Ensure all delivery confirmations have been provided
    • Prepare explanation for unique cases if applicable
  • Copay Collection
    • Ensure all receipts have been properly submitted
    • Ensure COB information has been provided
    • Show documentation of the proper usage of Manufacturer Coupons
  • Prescriber Denied Claims
    • Utilize Prescriber Attestation (Template to be created)
      • Must contain prescriber or prescriber’s representative’s signature and identifier linking the response to the prescriber’s office (fax header, office stamp, letterhead, etc)
      • Prepare explanations if extenuating circumstances
  • Member Denied Claims
    • Provide Patient Attestation (Template to be created)
      • Include copy of driver’s license or other ID to validate
      • Patient signature
  • Miscellaneous Discrepancy Types
    • Responses will be assessed for all miscellaneous discrepancy types

Post Audit Functions

  • Preparation of Corrective Action Plans
  • Open Dialogue for Continued Appeals
  • Preparation of Response to respective Review Committees (e.g. CMK’s PMRC)

Other PBM Services Offered

  • Prepare Credentialing/Contracting Paperwork
  • Change of Ownership
  • New Pharmacy Contracting
  • Mail/Retail PBM Contracting
  • Prepare responses for Credentialing Committee Review
  • Prepare responses for Re-Credentialing Review of previously terminated locations

Other Pharmacy Services

  • Prepare nonresident pharmacy state license applications
  • Prepare Change of Ownership pharmacy state license applications
  • Obtain Provider Identification Numbers (NPI, NCPDP)
  • Prepare Accreditation Applications (URAC, etc)

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