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PBM AUDIT AND CONSULTING SERVICES

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Pharmacy Benefit Management Audits

Industry "Best-in-Practice" PBM Audit Services

  • Pricing-Review of claims to verify that the pricing applied by the PBM complies with the terms of the pricing arrangement. Includes an on-site audit of network pharmacy contracts if a pass-through pricing arrangement is in place.

  • Benefit-Review of claims to verify that benefits have been appropriately applied for the benefit designs and formularies offered under the plan.

  • Rebate-On-site review of the top agreements under which rebates are calculated to assess: 1) consistency with formulary placement and rebate contracts, 2) proper calculation of rebates invoiced, and 3) reconciliation of rebates paid by manufacturers under these agreements.

  • Fraud, Waste & Abuse (FWA)-Provides ongoing oversight, identifies outliers and trends, validates appropriateness of drug usage, and provides follow- up analysis.

  • Retiree Drug Subsidy (RDS) Year-End Reconciliation-For employers participating in the RDS program. Year-end reconciliation services to validate compliance with CMS policies and processes. This includes: 1) Validation that only eligible member claims have been submitted, 2) Validation of cost data submitted to CMS, and 3) Confirmation of the removal of "B" status drugs and Part D exclusions from cost submissions to CMS.

  • EGWP (Employer Group Waiver Plan) PDE Audit-Focused review of PDE (Prescription Drug Event) records to detect discrepancies and provide plan sponsors with the information needed to validate amounts being charged by the PBM or to the PDE files.

  • Formulary Guidance and Recommendations-Analysis and review to assess and improve the effectiveness of PBM management of plan design and formulary.
Audit Objectives

The primary objective of our Pharmacy Benefit Management Audit approach is to identify errors and/or problems in the administration of the plan — for immediate corrective action, or possible reimbursement. Additionally, our findings will verify contract adherence, identify problem causes, and provide recommended actions for future savings.

Compared to other types of health plan audits, the existence of a uniform data set and established protocols for PBM's to adjust for errors make recoveries in this area more tenable. It is not unusual in our experience with initial audits for 1%-3% of paid claims to be identified as potentially recoverable. Because each audit is unique with respect to PBM and plan specifications, no assurances are made or implied here as to what level of recoverable dollars may be identified or achievable. However, the following chart provides a breakdown of the types of recoverable errors typically seen:

 

PBM Audit Goals and Benefits

Important Differences in Rx Claim Processing Prescription drug claims differ from medical claims significantly in the ways they are incurred and processed. In addition to (or as a result of) the "content" of prescription claims, the claims paying process places much higher reliance on electronic data. And, as noted above, there exists a uniform data set used by all parties. Accordingly, protocols for identifying and crediting overpayments to plan sponsors by PBM's therefore are established and accepted as common practice to a much greater degree than with medical claims audits.

Audit Methodolgy and Scope

Our approach employs electronic review and analysis of pharmacy benefit claims data using highly automated, proprietary audit systems. Because the systems were originally developed for very high volume processors, the depth and breadth of review is extremely thorough. The following table lists general categories of errors that the system is capable of detecting:

Rx Claim Recovery General Categories

  • Incorrectly Billed Claims
  • Duplicate Claims
  • Claims With Pricing or Discount Errors
  • Claims Not Adhering to Plan Design Specifications / Limitations
  • Potentially Fraudulent Claims

Your pharmacy plan specifications will be loaded into the system and 100% of the claims paid during the specified audit period will be electronically "reprocessed" and subject to electronic review and verification. Claims flagged for failing this verification will be detailed in line-item report format along with a narrative explanation of the discrepancy and the corresponding paid claims dollar overcharge. Through substantive testing and review with the PBM, this information will be verified and the final discrepant claims total will be utilized to determine the total recovery potential for the period of review.

The PBM's performance also will be evaluated in such areas as dispensing accuracy, financial accuracy, generic substitution efficiency rate, clinical management programs, savings guarantees (retail pharmacy discounts, mail order discounts), rebate guarantees, product switch/intervention efforts, lower of UCR price guarantee, electronic edit and concurrent DUR savings, retrospective DUR savings. Additionally, our findings will verify contract adherence, identify problem causes, and provide recommended actions for future savings.

Our drug pricing and discount analysis will compare the price basis per unit charged for the NDC (National Drug Code) adjudicated on the dispensing date with national drug price data sources in effect on that date. Any differences in price basis and discount level will be noted and detailed on a per claim basis. Generic discount verification will be conducted in the same manner. This pricing will be compared to the original claims and each difference will be documented.

PBM Audit Reports

Our final report will include a detailed summary of findings by category. Amounts of overcharge per claim will be provided for each category on a per-claim basis, and a narrative of category findings and recommendations will be included noting findings of significance as well as recommendations for future corrective action.This will constitute the basis for requesting reimbursement of overpayments from the PBM.

We will review our report and recommendations with you. If adjustments to the reports are warranted, they will be made and the adjusted output will be provided. Corrective action recommendations and recovery from this point forward can then be undertaken with or without our involvement.

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Celebrating our 24th Anniversary Year in 2014. Contact us today about the benefits of our proven audit and control approach.

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