In today's economic climate, insurance companies and the federal government are more focused than ever on cost-cutting measures. The unfortunate by-product of these efforts for healthcare providers is more intense and aggressive claims scrutiny and audit enforcement. Accordingly, it is crucial for providers to understand audit risk to effectively manage potential liability.
Medicare Audit Background
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Common Audit Triggers
In December 2023, OIG updated its workplan to include "Audits of Pharmacy Support for Prescription Drug Event Data." When pharmacies submit claims for reimbursement, they are contained in a Prescription Drug Event (PDE) record that is relied on by the government and plan sponsors for adjudication. The PDE contains various data elements, including prescription drug costs and payment data that enables CMS to make Medicare and Medicaid payments.
Specifically, OIG announced that it will conduct audits to "determine whether PDE records were adequately supported by inventory purchases and complied with applicable Federal requirements." You can access OIG's announcement HERE. In other words, in addition to MCOs, PBMs, and CMS auditors, now a federal agency is planning to conduct inventory audits directly.
HLA has published numerous articles on the defense of inventory audits, which you can access HERE and HERE. In summary, inventory shortfalls are commonplace due to the complexities of pharmacy practice. Accordingly, the federal government's focus on pharmacy inventory audits appears misguided.
For example, where is the compelling federal interest in whether a diabetic failed to pick-up his or her insulin? Or a patient had enough doses remaining on an inhaler to skip the refill? As a long-time, former public servant for the federal government, I always understood that the focus should be on the most meaningful and impactful issues. "Don't make a federal case out of it," is a saying for people blowing things out of proportion. Now, however, it seems the government is making a federal case out of trivial matters.
HLA Specializes in Audit Defense
Politics aside, the consequences of any type of failed audit can be severe, including recoupments, network sanctions, licensing board issues, and even criminal prosecution. Our experienced healthcare defense attorneys have a demonstrated track-record of highly successful outcomes in these cases, including the outright dismissal of criminal indictments and settlements for fractions of the claims paid with no licensing ramifications. Whether it be a PBM, payor, or OIG audit, our audit specialists are always available. Don't wait until your rights are jeopardized to pick up the phone.
