Prescription audits are an unsavory part of every pharmacy’s day-to-day business. Jump to Scriptrxed’s recent article about PBM audits for a great primer on the topic.
I wish I could say that this type of activity was not rampant, but I constantly find myself embroiled in the audit process. Everything Scriptrxed writes has happened to my stores and a whole lot more.
Audits have becomes a cash-grab for the Pharmacy Benefit Managers. They are wildly successful in part to the laziness of pharmacy operators. I have spoken with several pharmacists, representing both independents and chains over the years, and the effort being made to respond to and fight these audits varies widely. Many have ascribed the audits as a “cost of doing business.” Some stores, most often chains, have reported to me that they do not challenge the audit findings, even if they are completely inaccurate.
Over my career as a pharmacy owner, we have faced over $1,000,000 worth of audited claims, and the PBMs have attempted to charge back over 10% of that amount. A single audit may include over 100 individual prescriptions representing as many as 250 dispense dates and may represent over $100,000 in sales. Few, if any, of the prescriptions, audited, were routine, inexpensive generics. They consisted almost entirely of expensive medications.
It is not always appreciated that contesting audit findings is exceedingly important. Over the past 15 years, I have successfully defended my pharmacies from unfair chargebacks with almost a 100% success rate. Make no mistake, I have spent a lot of time and effort doing this, but because my stores do not also have other, more profitable departments outside of the prescription department, I cannot afford to concede even a small chargeback.
In the spirit of scriptrxed’s article on audits, I wanted to share the store of a recent audit, chargeback, and challenge in this edition of Tales from the Counter.
When is a Drop a Drop?
We received a spot desk audit recently for a brand-name eye drop for glaucoma. The patient’s refill history on this Rx was erratic: sometimes a bottle would last a month, other times significantly less and sometimes more. This is something we had noticed before and our patient chart noted that the patient sometimes struggles to get the drops into their eyes.
This is not an uncommon problem. I wear contact lenses, and I use eyedrops from time to time to moisturize my eyes. I consider myself fairly coordinated, but I miss my eye periodically, and sometimes I end up dropping two or three drops into my eye. In other words, this is not unexpected.
But auditors don’t care. They apply simple rules (like an eyedrop container delivers 20 drops per milliliter — a really crude estimation by the way) and if the directions (drops per day prescribed), amount (in milliliters) and the submitted day supply don’t align perfectly, they consider it an unpayable claim and want to charge the amount back.
Working on the audit, I recognized this would be a problem, so I provided both the requested prescription copies as well as our documentation of the patient’s issues in the audit response. Of course, this did not matter as when we received the audit findings we were still assessed with a chargeback on each bottle of the eye drop.
It is at this point that it is important to appeal. Below is a redacted copy of my response to the audit findings:
Please consider this letter to be our official appeal to Audit Reference [Redacted].
The prescriptions in question, all for the same patient, were reviewed by [External Audit Company] as having an improper Day Supply (“quantity billed is above plan limitation of 30 day supply”)
[Our Pharmacy] vehemently disputes this claim made by [External Audit Company]. As a healthcare provider, we pledge to provide the best possible outcomes for our patient. The prescription in question was filled in good faith with the patient, prescriber, and the plan and its pharmacy benefit manager.
The pharmacy and pharmacist working with the patient, and not a third party audit company, are explicitly charged with determining the actual day supply the provided package represents. This involves far more than an assumed 20 drops per milliliters that [External Audit Company] appears to be using.
This invalid assumption made by the auditors is unprofessional and overlooks the fundamental therapeutic value to the payer of the medication when used properly to reduce overall health care spending.
In the case of an eye drop, one cannot simply apply an arbitrary approximation of 20 drops per milliliter to calculate day supply. One has to account for the ACTUAL directions written by the prescriber. I quote:
Instill 1 drop once daily into both eye(s)
The key word in the above statement is “into.” Any drops that miss the eye are not valid drops and do NOT count toward day supply. [Our Pharmacy] maintains that the day supply and amount billed represent accurately represent the needs of the patient in order to maintain appropriate compliance with her medication.
Any attempt to charge back any of the claims in this audit will be met by a request for arbitration as well as complaints being filed with both the State Insurance Commissioner’s office AND the State Attorney General’s office.
The reply from the third-party audit company made no changes in the proposed chargeback. At this point, an official appeal was made:
I am writing to you to express my disappointment in your company’s audit findings. I have a Ph.D. in pharmaceutics and have decades of experience in measurement in the laboratory. Your reliance on the term “industry Standard 20 drops/ml” shows a complete lack of understanding of the science involved. Additionally, your apparent disdain for clinical outcomes is very disappointing. We are in the business of healthcare and [PBM / Third Party Audit Company] are apparently not our partners in this endeavor. We have supplied, in good faith, medications at the direction of the prescriber that are saving the payer in overall healthcare spend by decreasing both short term and long term morbidity. Your actions are in direct competition to this endeavor.
This correspondence is my official notice that I am appealing your audit findings to the fullest extent allowable in the contract. In addition, I am reporting your company to the following agencies:
The Board of Pharmacy
The Office of the Insurance Commissioner
The Attorney General’s officeIf you choose to reconsider your audit findings, please let me know immediately.
I am willing to bet that many audits are not contested all the way to this point in the process. And it is almost always at this point that the audit company adjusts their findings and reverses their chargeback. Keep in mind that the audit company’s focus was was never about the patient, care, or outcomes. Nor was it about fraud, waste or, abuse. That just leaves money. They wanted it. They grabbed for it. It wasn’t until I told them twice that they couldn’t have it that they relented.
Most pharmacies are honest and not involved in malfeasance. They care about their patients. They work to improve their outcomes. They Make Every Encounter Count. Well, this is yet another example. Pharmacists need to step up and contest bogus audit findings. Make every audit about the patient and care. Fight for your patient and your practice. Help undermine the profitability of these nuisance audits.
About the Featured Image: A World War II bomber (an Avro Lancaster), now residing at the Royal Airforce Museum — Hanger 5 — located outside London, UK, is adorned with painted images of bombs representing successful bombing runs made over Germany during the Second World War. On the side, partially visible in this photo, the text No enemy plane will fly over the Reich Territory appears – a quote from Herman Goering.