Magazine article Drug Topics

Dot Your I's Cross Your T's

Magazine article Drug Topics

Dot Your I's Cross Your T's

Article excerpt

The do's and don'ts of pharmacy auditing

A notice that the auditor is coming to check the books still strikes fear into the hearts of many pharmacists. Those who are not organized are especially vulnerable, since an auditor can ask a pharmacist to produce any prescription filled in the past three years.

"Pharmacies that have never been audited are now experiencing two, three, and, in some cases, four audits every year," said H. Edward Heckman, director of the Pharmacy Audit Assistance Service (PAAS) National, a membership organization based in Stoughton, Wis. "Some third parties are unfair in their audit strategies and may approach a suspect pharmacy as guilty before proven innocent. Pharmacists have a right to due process," he maintained.

Giving pharmacists that right was the philosophy behind the establishment of PAAS National, said Heckman. Founded in 1993 with the Illinois Pharmacists Association, PAAS developed as a subsidiary of Heckman & Associates, Stoughton, a consultancy owned by Heckman. The executive won't disclose how many pharmacists are members of PAAS, but he said the organization offers retail pharmacists services that include third-party audit seminars, thirdparty contract analysis, legal referrals, and expert witness services.

Heckman said there are various measures that pharmacists can take to avoid audit problems. To start with, he said, pharmacists have nothing to lose by being courteous, instead of confrontational, when the auditor arrives at the pharmacy. "Answer questions, but don't answer more than the question. Do let the third party look at the prescription records that pertain to their plan members. Don't let them look at any other records because there are patient confidentiality regulations in most states," he recommended.

PAAS is one of only a few independent auditing companies that specialize in helping pharmacists with third-party business. Prudent Rx, a Los Angeles-based management and consulting group established in 1994, is a similar operation.

Ron Harrison, director of Prudent Rx, said the concept of an independent auditing company for pharmacy is a recent development. "There are few companies like ours in the market, and there's certainly room for growth," Harrison said. He predicted that the move toward hiring independent auditing companies will be dictated by managed care organizations. "HMOs are bringing claims processing in-house, and auditing is something they'll need to develop either in-house or by contracting the service out to companies like ours," he said.

Unlike PAAS, whose clients are mainly independent pharmacies and small chains, Prudent Rx's clients are healthcare payers, including managed care organizations, Medicaid programs, insurers, and employer-sponsored health plans. Harrison said Prudent Rx audits pharmacy benefit management (PBM) companies "for program compliance and to ensure that the HMO's program has been set up properly, that claims are being repriced correctly, and that the PBM is paying the network pharmacies in a timely manner."

Prudent Rx also conducts audits on network pharmacies on behalf of PBMs that subcontract the auditing service, said Harrison. "We're basically a gobetween for PBMs that don't want to alienate pharmacies in their networks."

Prudent Rx president Russell Dates said that to avoid problems, pharmacists "need to be as compliant as possible with an auditor." Signature logs are particularly important. "They should be kept in chronological order," he advised. …

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