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PBM Audits

PBM audits are the single biggest threat to your business. They cost pharmacies thousands of dollars a year and can force honest business owners into bankruptcy. You need the PBM audit experts at Boesen & Snow law firm on your side so you’re fully prepared when auditors come knocking–and they will.

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When PBM is on your doorstep, Boesen & Snow has your back.

  • Reduce or eliminate PBM audit fines
  • Ensure compliance with documentation best practices
  • Implement standard operating procedures
  • Deal productively with PBM auditors

The PBM Audit Defense Experts

Boesen & Snow is the pharmacy law firm with the expertise you need to protect and fight against hefty PBM claw backs and fines. As one of a very few legal teams who truly specialize in pharmacy law, you not only get the experience of attorneys and registered pharmacists but the insight of a former PBM lead auditor and a wealth of business knowledge.  

Received a PBM audit request? Do not try to respond on your own.  Your initial responses can be used against you.  You may not be able to correct incomplete or inaccurate responses in an appeal.  Call us immediately.

PBM Audits Shouldn’t Be a Cost of Doing Business

Every independent pharmacy owner loses sleep over PBM audits. Unfortunately, recent changes to pharmaceutical industry legislation will only mean an increase in audit requests. And when profit margins are already low, one bad audit outcome can have a devastating effect on your bottom line. Preparation is key and choosing the right representation matters.

PBM Audit Preparation

The best way to handle incoming PBM audits is to be proactively prepared for them. From training you on how to implement standard operating procedures to ensuring proper, thorough documentation, Boesen & Snow provides the full breadth of services to help you build a sustainable business. Reach out now.

PBM Audit Response

Most pharmacists don’t seek help until it’s almost too late. And even then, they turn to cookie-cutter consultants who charge a premium for subpar results. Your initial response to a PBM request needs to be both strategic and immediate. Boesen & Snow provides comprehensive PBM audit responses. Reach out now.

PBM Audit Defense

The higher the prescription charges, the greater the chance for an audit. With a former auditor on our team who has spent years fining pharmacists for non-compliance, Boesen & Snow knows the ins & outs of the PBM business. We work hard (and smart) to fight for your rights and your livelihood. Reach out now.

PBM Network Benefits

As the official middleman between health plans  and pharmacists, PBMs have the upper hand when it comes to prescription reimbursements. It’s an unfair fact: Unless a Mom & Pop pharmacy belongs to the same in-network benefits program that big pharmacies enjoy, they often receive lower prescription reimbursement. Boesen & Snow will fight for your right to equality. Reach out now.

Our Attorney’s

A Winning Approach to Solving your Challenges

At Boesen & Snow, we’re not only on your side but we’ve been in your shoes. Founding partner Mark Boesen has been a licensed pharmacist for the past 25 years. He understands– and has experienced, the challenges you face both from a regulatory and business perspective. 

Founding partner Allyson Snow has spent over a decade practicing in the medical and family services industries, most notably advocating for the disabled and the elderly. She now champions the rights of independent pharmacies and brings a wealth of business experience to her clients.

Mark Ziegler joined the firm as Director of Pharmacy Services after serving as one of Boesen & Snow’s most formidable adversaries. A former PBM auditor for one of the largest pharmacy benefit management companies in the country, he brings our clients unmatched insight into the auditing process. 

PBM audits are an unfortunate reality. Today’s pharmacies need more than a standard business law firm.

Click Here if You’re being Audited



How do I respond to a PBM Investigative/SIU Audit?

The most important factor in responding to a PBM audit is providing the most complete and accurate documentation requested by the initial audit request deadline. This will help minimize the number of preliminary discrepancies that must be appealed during the audit while decreasing the potential financial burden to your pharmacy. Additionally, providing incomplete documentation puts your pharmacy at risk for an increased number of preliminary discrepancies which are much more difficult to overcome during the audit appeal phase. Finally, an incomplete initial audit response may lead to payment suspension and/or potential termination of your Pharmacy’s PBM Contract.

Will hiring an attorney negatively affect my PBM Audit?

Hiring an experienced attorney to assist with a PBM audit does not have a negative effect on the results of your PBM Audit. If anything, hiring an attorney shows you take your PBM Contract seriously and are looking for guidance in providing the most complete and comprehensive response possible to the PBM Audit request. Additionally, PBM Contract language can be confusing and overwhelming, hiring an experienced attorney will bring peace of mind while navigating and responding to the PBM Audit request.

What documents am I required to provide during a PBM Audit?

PBM Provider Manuals generally contain language listing the specific types of documentation the PBM may request during an audit with the stipulation of “including but not limited to.” Effectively responding involves providing a timely and complete response without providing documentation the PBM is not privy to or by answering “trap” questions that are not directly related to provisions of the Provider Agreement.

How do I appeal a PBM Contract Termination?

PBM Contract Termination Notifications are frightening and overwhelming. Certain PBMs offer you the chance to appeal and present documentation to remedy the issues leading to potential termination, while others may simply terminate your contract without an additional opportunity to appeal. PBM Provider Agreements offer a Dispute Resolution process which involves Dispute Resolution discussions. If the Dispute Resolution process fails, the next step requires Arbitration, which can be extremely expensive and time consuming.

What is a PBM Payment Suspension?

PBM Payment Suspensions are the withholding of funds in response to potential contract violations or PBM Audit findings. The PBM suspends payments to begin recouping funds in anticipation of audit findings which is within the parameters of the PBM’s Provider Agreement. Additionally, you are contractually required to continue to adjudicate claims and dispense medications to patients while on Payment Suspension. Contesting a payment suspension requires an assessment of the basis for the suspension, opening lines of communication with the PBM, and providing a corresponding appeal, including documentation, to refute the basis for the suspension.

What is a PBM Investigative Audit?

PBM Investigative Audits are generally more in-depth than standard onsite audits. The PBM will conduct the audit via a desktop review of the documentation requested. In most cases, the documentation requested includes but is not limited to 1) Wholesaler Invoices, 2) Proof of Copay Collection, 3) Proof of Delivery (If shipping medications), 4) Proof of Payment for wholesaler purchases or copays, and 5) Policies and Procedures. Additionally, Investigative Audits have shorter deadlines and may also include questionnaires specific to claims processing and your pharmacy’s operations and business dealings. Finally, do not be caught off guard if the PBM determines discrepancies and uses language alleging potential “FWA”. It is crucial to respond in a complete and timely manner to the initial audit document request to mitigate discrepancies, possible payment suspension, and potential findings that may lead to termination of your PBM contract.

Will I lose my contract after a PBM Audit?

Termination of your PBM contract is one possibility depending on the dollar amount of the final discrepancies as well as the discrepancy types. PBMs will generally move to terminate pharmacies that have audit discrepancies bucketed in the category of “potential FWA”. This includes but is not limited to discrepancies such as 1) Drug Invoice Shortages, 2) Member Denied Claims, 3) Prescriber Denied Claims, 4) Failure to Provide Evidence of Copay Collection, 5) Failure to Provide Confirmation of Delivery, and 6) Failure to Provide Evidence of Patient Consent. In some cases, the PBM will notify your pharmacy of a termination review, allowing you to appeal and petition to stay in the network. Unfortunately, certain PBMs move extremely quickly to terminate and do not allow your pharmacy to appeal prior to the decision. It is always important to appeal any PBM termination and must include evidence of a corrective action plan, submission of missing or incomplete audit documentation, and payment of audit amounts due that were unable to successfully be contested. The most crucial point during any audit to mitigate a potential termination is providing a complete and timely response to the initial audit request.

What questions am I required to answer during a PBM Audit?

PBM auditors may ask questions related to the submission of claims, inventory purchasing, collection of copays, and other aspects of your pharmacy’s day to day operations as related to the audit. It is important to delegate a single person to direct questions to and have policies and procedures in place to reference when asked about the specific pharmacy functions being audited. Auditors may also ask “fishing” questions and rely on either you or your staff to divulge too much information. Remember, it is ok to tell the auditor you will get back to them with an answer or request additional questions be provided in writing prior to answering.

How long does a PBM Audit take?

PBM audit length will vary based on the state your pharmacy is in and the type of audit performed. Many states have enacted PBM Audit laws that may require specific deadlines for the PBM to provide audit reports and allow your pharmacy time to appeal. Longer deadlines may extend the time it takes for the audit to be completed. Additionally, onsite audits generally take a shorter period to complete as the number of claims and amount of documentation required is significantly smaller than a desktop or investigative audit. Generally, investigative audits may take up to 90 days to review the initial documentation submission prior to determining preliminary discrepancies. Once the appeal process has begun, it may take several more months to reach a final discrepancy list. Ideally, an investigative audit will complete within nine months depending on the deadlines for the PBM to provide audit reports and the appeal deadlines offered to your pharmacy. Keep in mind, there may be some investigations performed by PBMs under the guise of “potential FWA” that do not abide by the state required deadlines due to “fraud exemptions.” These audits may impose deadlines on your pharmacy to provide documentation within one to two weeks. Generally, these “investigations” are rapidly performed with both short appeal deadlines and the quick turnaround of the PBM to provide discrepancy reports.

When will money taken during a PBM Audit be returned?

PBMs are quick to place your pharmacy on payment suspension if the PBM suspects “potential FWA” or determines a high dollar preliminary discrepancy amount. Payment suspensions can be complicated as the PBM withholds future funds owed to your pharmacy and is only able to withhold the full amount of the payment due. This generally leads to an amount withheld that exceeds the total potential audit amount owed, pending appeal. It is important to track negative adjustments on your pharmacy’s Remittance Advices to track how much money has been withheld. This can be even more complicated if your pharmacy utilizes central pay through a PSAO. In this case, the PSAO may withhold all payments to your pharmacy (which may include payments from all PBMs) severely impacting your pharmacy’s cashflow. It is crucial that you monitor how much has been withheld and immediately contact your PSAO or the PBM to inform them the amount collected has exceeded the potential owed amount due to audit findings. Once the payment suspension is lifted, it may take a couple of weeks to begin receiving payments to your pharmacy. Do not expect any money withheld to be returned until the audit has finalized and the final discrepant amount has been determined.

Why is the PBM charging more than the Audit Discrepancy Amount?

PBMs will charge an “audit fee” or “noncompliance fee” based on the total discrepancy amount. This may be a 20% fee on the total amount if the audit exceeds $10,000 or a smaller percentage of the total amount of discrepant claims. The fee percentage is detailed in the applicable PBM’s Provider Manual and can cause an increased financial burden on your pharmacy of the audit discrepancy amount is already significantly high. Additionally, the PBM may withhold more than the total audit discrepancy amount when placing your pharmacy on payment suspension. This occurs because the PBM can only withhold complete payments and is unable to collect the exact amount owed. It is crucial you review your Remittance Advices to ensure you request the money be returned (or at least a lifting of the payment suspension) once the PBM has exceed the potential total audit amount due.

Will a PBM Audit prevent me from opening a new pharmacy?

Potentially, and this can happen for several reasons. Have you previously owned or been employed by a pharmacy that was terminated from the PBM’s network due to audit findings or a contract violation? Have you personally or a pharmacy you have owned or worked for been disciplined by a regulatory board or under investigation by legal authorities? Have you been affiliated or co-owner with someone linked to PBM audit findings, terminations, discipline, or under investigation by legal authorities? If so, you may have significant problems enrolling a new pharmacy or a purchased pharmacy into a specific PBM network. There may be significant hurdles to overcome prior to successfully enrolling, some of which may only be cured over a multiple year period out of network. Successfully enrolling is dependent on evidence of corrective actions taken if audit related, time out of network, and repayment of any owed audit amounts. It is not an impossible feat to obtain a PBM contract with previous audit, disciplinary, or investigation (with a positive resolution) history, however, it will take a significant amount of preparation and work to overcome the PBM’s concerns prior to obtaining a contract.

How do I appeal PBM Audit Final Findings?

As of this writing, the following states have PBM Audit laws requiring an appeal of Final Audit Findings: Arizona, California, Connecticut, Delaware, Kentucky, Minnesota, Montana, Oklahoma, Pennsylvania, South Dakota, Utah, Vermont, and West Virginia. Generally, you will have 30 days to submit an appeal to the final audit findings. If your pharmacy is in a state that does not require the ability to appeal Final Audit Findings, the most effective course moving forward is to obtain legal representation experienced in PBM matters. You may be able to work with representation to continue appealing the findings, potentially mitigating further action from the PBM such as contract termination.

What is the difference between a PBM Desktop and Onsite Audit?

The difference between a Desktop and Onsite audit is significant. Onsite audits involve an auditor physically visiting your pharmacy who reviews a smaller number of claims with a much smaller documentation requirement and generally are completed much faster than Desktop audits. Desktop audits on the other hand, involve a larger number of claims and an expanded documentation request. Desktop audits take much longer to complete and involve a much deeper dive into the documentation requested. Desktop audits are generally investigative by nature and target “potential FWA.” Desktop audits also typically lead to higher audit charge backs, possible payment suspension, and may lead to contract termination depending on the outcome.

How do I request additional time to appeal a PBM Audit?

Requesting additional time to appeal an audit is simple, either request additional time directly from the auditor if the audit is still in the initial phase or request additional time directly from the PBM contact provided to you for the appeals phase. It is recommended you request an extension as soon as possible and do not wait until the last minute. In many cases, the PBM requires that you ask for more time prior to a week before the due date. It is also recommended that you ask for more time than you think you will need. Generally, the PBMs will grant a one-to-two-week extension during each phase of the audit (initial audit request and preliminary appeal) but it does not hurt to ask for multiple weeks to ensure all documentation is provided. It is crucial you do not miss deadlines and are able to provide a complete and timely response. Once a deadline is missed, it becomes significantly more difficult to overcome audit findings and once a final audit report is issued, it may be extremely difficult to further appeal unless your home state requires a final audit appeal. Ask for more time when able and work towards the goal of submitting a complete response during the initial request.

How do I dispute PBM Audit Findings?

Each PBM has specific dispute guidelines written into their respective Provider Manuals. This involves sending a Dispute Notice to begin the Dispute Resolution process for a predetermined time to resolve the dispute. If a resolution is not met by either party, the dispute may then proceed to arbitration or litigation. This involves obtaining experienced legal representation to guide you through the dispute process and potential arbitration or litigation. The PBMs make this process expensive and time consuming to deter pharmacies from disputing audits, however, if the resources to fight are available, it may well be worth the fight.