Pharmacy benefit managers conduct audits to identify possible fraud, waste, and abuse and/or verify contract adherence. Taking proactive steps to identify common triggers before an audit occurs can greatly reduce your financial liability as a pharmacy owner or operator. Beyond that, adopting a proactive approach to audit readiness can prevent adverse findings and interruptions to pharmacy operations in the event of an audit.
Partnering with a pharmacy services administrative organization (PSAO) can help you reduce the administrative burden associated with identifying and minimizing audit risk. A PSAO can also help you save several thousands of dollars in audit expenses and minimize audit recoupment. The right PSAO partner will utilize a 3-pronged approach that comprises a) assistance with a timely response to an audit; b) working directly with the pharmacy benefit manager on your behalf; and c) analyzing your audit data set to identify high-risk claims.
It is important to note that your partnership with a PSAO does not preclude implementing a process improvement plan for your pharmacy. A process improvement plan should outline best practices and other preventive measures that can help you anticipate and prevent audit triggers. Some examples of audit triggers are a) high-cost drugs such as specialty, compounded, and brand name medications; b) quantity submitted versus days’ supply; c) a high claims reversal rate; and d) a high volume of claims for controlled substances submitted for a particular patient and/or prescriber.
As a pharmacy owner or operator, there are steps you can take to ensure that you are continuously protecting your investment. To minimize your audit risk, you can develop and implement a) a preventive strategy and b) a process improvement plan.
An effective preventive strategy for minimizing audits is built on proper staff training. Fostering an efficient system that keeps staff informed about evolving requirements creates additional value for multiple business goals.
Where to begin:
- Red-flagged Prescription Drugs. Know which prescription drugs are commonly red-flagged by pharmacy benefit managers.
- Process. Review all required details when processing prescriptions (avoid shortcuts). Be sure to validate and authenticate any prescription when in doubt.
- Prescription Details. Note any changes to communication details (such as the date and time, name of the person, and employee who initiated the communication) on the prescription.
Process Improvement Plan
The purpose of a process improvement plan should be to facilitate the evaluation of internal processes and employee training needs to ensure readiness in the event of an audit.
Where to begin:
- Your Provider Agreement. Keep all contractual agreements and pharmacy provider manuals in a central location. Assign the task of reviewing these to an employee whose role will be to oversee internal processes to ensure that your pharmacy is in compliance with all requirements. Note that the pharmacy provider manual and contract agreement can be given the same level of importance during an audit.
- Documentation. Ask and answer any questions or concerns regarding contractual agreements in writing.
- Policies and Procedures. Establish guidelines on how the following items are handled at your pharmacy: returns-to- stock, claim testing, the disposal of patient health information, inventory management for controlled and non-controlled medications, and employee training for HIPAA and FWA.
Audit findings can result in recoupment and in some cases, the risk of termination from a payer’s network. Taking steps to continuously identify your risk can minimize any potential financial liability.