Pharmacy benefit manager (PBM) audits by CVS Caremark can result in devastating consequences, including huge recoupments, network termination, and even criminal prosecution. Your initial response to a CVS Caremark audit is critical.
Without the right legal defense, you may face significant penalties and network exclusion. At Health Law Alliance, our legal team has successfully defended hundreds of clients against PBM audits, Fraud, Waste & Abuse (FWA) investigations, and network terminations. We have prevailed against CVS Caremark and have proven strategies for the audit and appeal process.
Pharmacies need to hold PBMs like CVS Caremark accountable for their legal obligations and provider agreements. Our founding partner was a top executive with oversight of OptumRx. Our PBM audit defense team has helped clients avoid millions of dollars in recoupments, remain in-network, win reinstatement, and defend themselves against abusive PBM tactics.
Health Law Alliance represents independent, specialty and compounding pharmacies in CVS Caremark pharmacy audits, appeals of audit findings, network termination and credentialing appeals, and audit settlements. Our article on CVS Caremark audit appeals covers deadlines and procedural defenses; for audits by other PBMs, see our PBM audit attorneys.
We have created this guide as a universal resource for providers, and any legal advice in the context of an attorney-client relationship would be more tailored to your unique circumstances.
To design an effective CVS Caremark audit response strategy, providers must understand the chain of events both prior to the initiation of a CVS Caremark audit and afterwards. For example, Special Investigative Units (SIUs) are often the genesis of a CVS Caremark audit, and the presence or absence of “audit risk factors” is informative on potentially broader exposure beyond the CVS Caremark claims under audit.
CVS Caremark, OptumRx, and Express Scripts (ESI), control at least 80% of the market, making them the three biggest PBMs. Humana also ranks among the largest. In addition, these PBMs regulate access to networks for smaller competitors, such as ESI’s partnership with Prime. Plan sponsors, such as United Health, Cigna and Aetna, are vertically integrated with these PBMs, increasing CVS Caremark audit risk for pharmacies because network sanctions are more likely to affect a significant aspect of a pharmacy’s business across both government and commercial claims.
Common types of CVS Caremark audits include desk audits; on-site audits; invoice audits; and prescription audits. Irrespective of the type of CVS Caremark audit, all interactions with CVS Caremark should be taken extremely seriously and can lead to severe consequences if not handled appropriately. For example, there has been a sharp increase in the federal prosecution of pharmacists for audit-related conduct, including answering PBM questions incorrectly. Accordingly, pharmacies should consider using CVS Caremark audit counsel to avoid these pitfalls.
Pharmacies can take various steps to prepare to meet CVS Caremark audits, including routine self-audits. In fact, the government publishes comprehensive guidance and a checklist to assist pharmacies in their audit planning, including self-audits around prescribing practices, controlled substance management, invoice management, and billing practices. If you need assistance designing or implementing a CVS Caremark audit protection plan, please do not hesitate to contact us.
Defending against a CVS Caremark audit requires comprehensive knowledge of the rights, responsibilities, and intricacies of pharmacies and their laws and regulations. If your pharmacy has been identified for a CVS Caremark audit, there are a number of potential defenses available to you. The first defense against a CVS Caremark audit is to be proactive, and audit planning can lessen the chance of unfavorable findings. That said, it is often necessary to involve an attorney to hold PBMs like CVS Caremark accountable to their obligations under law and provider agreements. For this reason, national audit services and pharmacy audit consultants are often ineffective.
CVS Caremark audit discrepancies and findings can be appealed based on the specific procedures outlined in the provider manuals. It is important to follow these requirements exactly, within the timeframes established, or your CVS Caremark appeal rights could be lost and further review denied. In a CVS Caremark appeal, it is critically important to make a complete record of why the CVS Caremark audit findings or sanctions should be reversed, including through documentation, legal arguments, and corrective actions, if any. Depending on the outcome of the CVS Caremark appeal, you may have further legal recourse against CVS Caremark.
Any decision to resolve a CVS Caremark audit should be informed and result in a full and final settlement of all liability, but CVS Caremark audit settlements need to be structured carefully to achieve this goal.
We offer flexible fee arrangements based on the scope of representation required and CVS Caremark audit stage. The earlier we are involved the better, as we can shape and limit CVS Caremark audit scope, making legal representation more effective and less costly.
Our experienced attorneys have assisted thousands of providers in navigating the same challenges you are facing.
PBMs like CVS Caremark and payors use artificial intelligence and data mining across medical and pharmacy claims to identify areas of potential inquiry. Among other areas, these inquiries typically involve:
CVS Caremark audits can have severe repercussions depending on the results of the pharmacy audit, including:
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Learn directly from pharmacy owners that were targeted by PBMs like CVS Caremark: with our assistance, they fought back and won.
During the audit, Caremark alleged that the pharmacy had failed to provide sufficient proof of copayment collection, prescription delivery, and patient-prescriber relationships, even though the pharmacy provided all of the required documentation during the audit. The result: a full reversal of all audit findings, with Caremark rescinding all of its clawbacks.
Caremark’s credentialing committee didn’t just deny the pharmacy’s application: it terminated the pharmacy from its network entirely, citing the pharmacy’s alleged affiliation with an unrelated “problematic” pharmacy based on a pharmacist’s employment history. In preparing the pharmacy’s appeal, our team established the pharmacy’s documentary record, demonstrating that the pharmacist in question was no longer employed. Caremark notified the pharmacy that it would be conditionally reinstated as a participating provider in Caremark’s network.
Our team developed a strategic defense to challenge the audit findings, highlighting that Caremark had failed to consider several of the pharmacy’s purchases despite having received invoices from the relevant wholesalers. Thanks to HLA’s advocacy, Caremark drastically reduced the pharmacy’s total recoupment, saving the pharmacy from paying thousands in unjustified penalties for medications that were properly ordered and dispensed.
Attorney advertising. Prior results do not guarantee a similar outcome. Case summaries are generalized for confidentiality and are not a substitute for legal advice on your specific matter.
Anthony Mahajan is a former federal prosecutor who served as Chief Compliance Officer and Executive Leadership Team member for UnitedHealth Group, with oversight of Optum and UnitedHealthcare, including the SIUs within those platforms. Diana Yastrovskaya is PBM audit and compliance counsel and defends pharmacies in federal and state investigations. When a PBM refers an audit to prosecutors, the same team defends the investigation. Both are credited on the three CVS Caremark results above.
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