Providers facing PBM audits must decide whether to rely on internal staff or seek audit counsel from experienced attorneys, particularly when concerns about audit scope or risk factors arise. HLA's attorneys, with prosecutorial background, offer crucial insights and protection against potential legal consequences during pharmacy audits.

PBM and pharmacy audits are commonplace for providers, who need to decide whether to handle the audit internally or seek outside assistance. HLA provides the following insights and considerations to assist with that important decision.  

PBM Audits May Be Handled Successfully by Pharmacy Staff

Can you and your staff provide an effective response to a PBM audit? Of course you can.  You know your business better than anyone else, so the default assumption is that pharmacy employees can and should prepare an audit response.

However, there are a number of situations in which audit counsel should be used instead of pharmacy staff, or at least involved in guiding the response.

PBM Audit Attorneys Should Be Used if You Have Concerns About the Scope of the Audit

First, it may sound hokey, but you should trust your instincts. If you get a pit in your stomach when certain claims come under audit, you should listen to what your gut is telling you and think carefully about how to respond.

As we have written about previously, an audit can result in severe consequences, including network termination, license revocation, and even criminal prosecution. Obviously, these are worst-case scenarios, but if an audit causes you worry, that feeling is an unmistakable sign that counsel should be involved.

Pharmacy Audit Attorneys Should Be Used If Audit Risk Factors are Present

Second, take into consideration the totality of circumstances around the audit. Ask yourself why the PBM is focused on the particular claims at issue. Presumably the characteristics of the claims will provide some insight into why the PBM selected them for audit.

The presence or absence of such “audit risk factors” should inform the decision whether to seek counsel. For example, has claims volume increased dramatically? Is there a utilization management process in place? Is the medication a high-margin item? Is there a grey-market for the drug? Are compounds involved? Topicals? DAW codes? Coupons? Was the referral from a telehealth provider? Have patients or prescribers complained about solicitation?

HLA use these factors and our experience to calculate the magnitude of audit risk at issue. For example, the federal government routinely prioritizes enforcement around telehealth, and these relationships typically involve higher claims volume. Therefore, if the audit implicates a telehealth referral, even absent other risk factors, it is prudent to retain counsel before proceeding.

PBM Audit Attorneys Should Be Used to Provide “Audit Insulation”

Finally, the most compelling reason for using counsel to respond to a PBM or pharmacy audit is for the “audit insulation” it provides between the auditor and business. For example, ESI and other PBMs often will seek to question the owner, PIC or staff as part of their investigation. This is extremely problematic for many reasons, including:

  • These inquiries often occur without any prior notice or opportunity to prepare, leading to inaccurate and erroneous assumptions;
  • Your statements can be used against you in the future, including in the context of a subsequent government investigation;
  • At the audit stage, it is important to keep all options open and not commit to a factual position until the full context of the audit becomes clear.

Unfortunately, in today's environment, the safest course is to assume the worst-case scenario and act accordingly. In subsequent communications, we will explore an alarming trend involving the prosecution of pharmacists for audit-related conduct. Although such a scenario is unlikely, the point remains that you should be extremely careful in any interaction with a PBM or its investigator. Forewarned is forearmed.

HLA’s Audit Attorneys Can Protect You and Your Business

In sum, although some audits can be handled internally, providers should retain an attorney to defend most audits due to the extra layer of protection that an attorney provides to the business and its personnel. Audit counsel should have the perspective and experience necessary to understand the full scope of the conduct at issue and its potential implications. In addition, a qualified attorney should be able to provide audit solutions, as well as preliminary strategies for defending any downstream issues that arise. Contact us at (800) 345-4125 or via email at if you are being audited.

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