Pharmacy Benefit Manager (PBM) audits are all about accuracy, compliance, and efficiency in pharmacy operations and the point of these audits is to find any discrepancies. Statistics show that about 72% of community pharmacies experience a decrease in profitability due to PBM audits and delays in payments, which can seriously mess with your cash flow and operational efficiency.
According to Boesen & Snow Law, a provider of PBM audit services, every step of the PBM audit is an opportunity to identify a missing process, data point, or document that can justify harsh contractual punishments. These audits can make or break your pharmacy’s bottom line. That’s why you have to stay ahead of the game.
In this article, we’ll talk about audit triggers and documentation requirements as well as how you can handle audit findings. Learn more about PBM audits to protect your pharmacy’s financial health.
Importance of PBM Audits
PBM audits can affect your pharmacy’s financial health and compliance status. These audits verify if your pharmacy is billing accurately, maintaining proper documentation, and following all regulations set forth by the pharmacy benefit manager (PBM). With regular audits, you not only protect your pharmacy from fines and penalties but also build trust with PBMs, creating stronger relationships and maybe more business opportunities.
You can think of these PBM audits as a valuable tool rather than a burden to uphold the highest standards of practice and position your pharmacy for long-term success. PBM audits can help detect and prevent fraud, waste, and abuse within your pharmacy operations. They provide insight into areas where your processes may be lacking and offer opportunities for improvement.
Quickly addressing any issues identified during audits also demonstrates your commitment to compliance and integrity, and it prevents the need for arbitration or business litigation. arbitration
Common Audit Triggers
Audit triggers commonly happen when pharmacies deviate from prescribed billing practices. Some common triggers include:
- Billing for medications not dispensed.
- Incorrect coding leads to overbilling.
- Failing to obtain prior authorizations for certain medications.
- Billing for brand-name drugs when generic equivalents were dispensed.
Another trigger is improper documentation or missing information on claims, which raises red flags during audits. Inaccurate drug pricing, such as charging higher prices than usual and customary rates, can also trigger an audit.
Pharmacies that frequently submit claims with unusually high reimbursement amounts compared to their peers may also trigger audits, as auditors need to ensure their compliance with contract terms. As a pharmacy, you can proactively review your billing processes and documentation to minimize the risk of audit discrepancies.
Documentation Requirements
Proper documentation demonstrates the legitimacy of your pharmacy’s operations and services. Keep detailed records of prescriptions, patient information, drug dispensing, and any communication related to patient care. Make sure that all entries are clear, complete, and up to date.
Keep records of any communications with prescribers or payers as well, including prior authorizations and drug utilization reviews. You also have to document any special circumstances or deviations from standard procedures, along with the rationale for these actions. Not to forget the accuracy of your financial records.
Keep track of all billing and payment information, including any rebates or discounts applied. Consistently reconcile your financial records with prescription orders for accuracy.
Handling Audit Findings
When confronted with audit findings, carefully review the audit report to understand the specific issues identified. Once you have a clear grasp of the findings, prioritize addressing each discrepancy in a timely manner. Communicate with the pharmacy benefits manager (PBM) to discuss the audit results and work together to resolve any issues.
Be sure to provide supporting documentation or explanations to support your case and demonstrate compliance with the PBM’s requirements. If there are financial implications resulting from the findings, be prepared to negotiate or appeal, if necessary. Implementing corrective actions can prevent similar discrepancies in the future.
Best Practices for Audit Preparation
Create a comprehensive checklist to streamline your audit preparation process and make it thorough.
1.Reviewing your pharmacy’s contracts and agreements with PBMs will help you understand the specific requirements and expectations for audits.
2.Create a designated folder or digital space to organize all relevant documents, such as invoices, prescription records, and communication logs.
3.Train your staff on proper documentation practices and make them understand the importance of maintaining accurate records.
4.Implement regular internal audits to identify any potential discrepancies or areas for improvement before an official PBM audit. This can help you address issues preemptively and demonstrate compliance during the actual audit.
5.Collaborate with your team to assign responsibilities and tasks related to audit preparation, let everyone be aware of their role in the process.
6.Stay updated on industry regulations and PBM audit protocols to align your practices accordingly.
Stay informed and prepared to minimize any potential financial or reputational risks for your pharmacy.
Conclusion
Every pharmacy has to be prepared for PBM audits. To do so, start by understanding the importance of audits, recognizing common triggers, ensuring proper documentation, and effectively handling audit findings. By following best practices for audit preparation, pharmacies can minimize the impact of audits on their business operations and maintain compliance with PBM requirements.
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