PBM audits can be resolved successfully, but more frequent and aggressive audits will require careful planning. Providers should avoid reactive behavior. Strategic planning for audit resolution should be made from audit inception to proactively manage audit risk effectively.

PBMs are everyone's pain point and every interaction should be taken extremely seriously. Even the most minor and seemingly trivial audits can lead to disastrous consequences if not handled properly. These challenges, however, can be managed successfully with an effective response strategy.

Aggressive PBM Audits Will Increase

PBM audits are expected to increase in frequency and intensity for the foreseeable future. This trend is the result of numerous factors, including advancements in artificial intelligence that facilitate the processing of larger data sets more quickly, increasing focus and scrutiny on PBMs for anticompetitive behavior such as DIR recoupments, and overall economic conditions, including CMS price negotiations on the biggest margin drugs and rising medical loss ratios for managed care payors as seniors return for elective procedures following the coronavirus pandemic.

All of these developments will increase costs and margin pressure on PBMs, leading them to take additional efforts to recoup paid claims through audits. As difficult as this may be, forewarned is forearmed.

Audit Response Strategy is Critical

This does not mean that PBM audits cannot be resolved successfully, but more aggressive auditors will require providers to plan carefully. Missteps at the beginning can lead to significant adverse findings and potential network consequences. Audits are specialized and involve complicated legal and contractual obligations that most providers are unfamiliar with. Accordingly, PBMs can take advantage of procedural pitfalls to deem an audit response inadequate and return adverse findings that they consider "final."

We have described previously "audit risk" factors that providers should consider in determining whether to handle an audit internally or retain outside counsel, but those clients that involve experience healthcare attorneys from the beginning typically achieve the best outcomes. Either way, providers should embrace those areas of risk within their business models that pose the most potential risk and have an audit response strategy. For example, mock audits and staff training can prevent audit discrepancies around co-pay collection, a persistent PBM focal point, particularly for telehealth models.

PBM Audit Liability Can Be Limited

Finally, providers should not lose hope that even the worst case scenarios can be managed successfully. Competitive pressures in our industry often lead to increased risk appetite and mistakes. It is important to remember that there are solutions to limit exposure if necessary. For example, we have written about the use of OIG self-disclosures in cases involving potential fraud, and the outcomes we have achieved in federal, state and administrative matters involving millions of dollars in inventory discrepancies.

The bottom line is that if a PBM audit threatens to expose practices that could lead to greater liability beyond the claims audited, do something about it! We can help you limit risk and significantly increase your PBM audit leverage, but you have to take the first step. We are always available to help.

Frequently Asked Questions

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