Pharmacy U

Watch & Learn: Preventing Third-Party Pharmacy Audits and Clawbacks

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It is probably fair to say that at the moment people hear they are going to be audited they feel a certain amount of anxiety. This is certainly no different in the world of pharmacy with respect to the auditing of prescription drug plan claims. However, the stress caused by a potential or impending audit can be reduced tremendously by being proactive and prepared.     

By Peter Zawadzki, B.Sc.Phm., R.Ph.

As the saying goes, an ounce of prevention is worth a pound of cure. A prescription drug plan audit is most often triggered by a particular prescription claim or claims that fall outside normal standards.

Following are some common circumstances that have been found to trigger prescription drug plan audits:

  • Higher than average prescription price mark-ups when high-priced drugs are used
  • Higher than average dispensing fees and drug costs
  • Missing prescription drug billing information
  • Acting outside the pharmacy-prescription drug plan contract rules
  • Charging differences in cost between what the pharmacy would normally charge and what the prescription drug plan will pay forward to clients.

Understanding and following the terms of the agreement between the pharmacy and each of the private drug plan payers is the key to audit prevention. To that end, staff must be made aware of these terms of agreement as well as activities that may trigger an audit by a third-party adjudicator. In the end, a pharmacy that has “followed the rules” of each of the third-party drug plans will have much less risk of having money “clawed back” due to improper billing procedures.

Let’s look at some of the strategies that can be employed to reduce the risk of being audited:

  • Ensure that all of the staff involved in the prescription dispensing process are well aware of rules for each of the plans of the third party payers
    • E.g., days’ supply, vacation supply, balanced billing
  • Designate a lead staff member (expert) for each plan
    • Ensure all staff members know who the lead is for each private drug plan so they can be consulted appropriately
  • Ensure all staff are familiar with avenues for finding information to handle circumstances they are not 100% sure of
  • Have staff review each private drug plan manual annually. Designated drug plan leads should communicate updates and drug plan changes with all staff as they become available.

In the world of pharmacy, the auditor’s job is to ensure that the rules that have been agreed to with third-party drug plans are being followed. In short, they are looking for improperly billed claims, and fraud. The auditor is “just doing their job” and should be treated with respect and courtesy.

For on-site audits, it is important to have a staff member who is an expert in prescription filling and filing process available to pull documentation that has been requested by the auditor courteously and efficiently.  After all, what do we have to hide?