Magazine article Drug Topics

The Auditor Cometh

Magazine article Drug Topics

The Auditor Cometh

Article excerpt

Are you a target of PBM audits all the time?

Find out why

Have you ever been audited by a pharmacy benefit manager (PBM), and even though the auditor assured you at the end of his visit that everything was fine, the next thing you knew, you were billed for an amount-say, $1,000-you didn't expect to be billed for? Don't let that happen to you, advised John Malley, v.p. of the audit department at National Prescription Administrators Inc., a PBM in East Hanover, N.J. He was addressing pharmacists at a Long Island University pharmacy law seminar in New York recently. NPA auditors are trained to tell pharmacists what their audit discrepancies are. They may not know exactly how much you will be charged at the end of their visit, but they can give you examples of what you did wrong, he told the audience. Establish communication with the auditor to decrease your unnecessary chargebacks, he urged.

Unlike other PBMs, NPA doesn't receive a cut of the audit recoveries. In some cases, clients share the audit credits with PBMs, and the PBMs, in turn, share them with individual auditors. This creates "highly motivated" auditors who may find discrepancies that are erroneous, Malley noted. NPA auditors don't have this "witch hunt" mentality, since they don't make any more or less based on what they find in the stores.

Why audit? Studies have found that 3% of prescriptions submitted to third-party plans are fake and 2% are claims for which payment should not have been made, Malley said. The goal of audits for NPA, the middleman, is to recapture any money for clients that was paid out to pharmacies that should not have been disbursed.

Since NPA pays out $700 million yearly to 52,000 pharmacies in the country, that's a lot of ground to cover.

Who gets selected for auditing? Pharmacies with a large number of abuse indicators are audited by NPA frequently. Malley said NPA uses a series of pharmacy usage reports that identify certain probabilities of billing problems. These reports contain 32 indicators of potential abuse, such as a high average Rx price and high refill percentage. Pharmacies that have no abuse indicators but have large volumes are also a popular target. Malley said some pharmacies do $1.2 million in business with NPA alone. …

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