Managing and Reducing Pharmacy Audit Risks

The number of audits by Pharmacy Benefit Managers and other third-party payers has steadily increased in recent years, with more than 1,200 Pharmacy Audit Interventions being entered in 2018. Increased levels of interventions can take a growing toll on the time and resources of independent pharmacies, with audits taking upwards of 120 days to complete.

PBMs watch for many different triggers that can lead to an audit, so it’s critical for pharmacies to be aware and anticipate risks.

A high-performing Pharmacy Services Administrative Organization (PSAO) can save pharmacies thousands of dollars in audit expenses and loss of reimbursement, allowing the pharmacies to remain focused on patient care.

For the PSAO, the key is to make pharmacies aware of the many factors that can lead to a third-party audit and help them make proactive adjustments before an audit occurs.

Some common audit triggers include partial dispensation of medication (indicating that stock is too low), plan limits exceeded, clerical errors or missing documentation. PBMs often have different sets of rules about adjudication of certain claims, thus pharmacies need to know what applies to their specific claims to avoid mistakes. In addition, many PBMs have implemented their own audit profiles that are specific to a market or even a ZIP code — based on fraudulent prescribing behaviors or a high incidence of issues with controlled substances, for example — that can be highly variable and difficult to track.

A service-oriented PSAO will collaborate with both the PBM and the pharmacy to identify audit risks and prevent or reduce the number of audits, by:

  • working directly with PBMs to determine their specific audit triggers
  • analyzing transactional point-of-sale data regarding claims from pharmacies to pinpoint risk possibilities
  • providing pharmacies with real-time data, education and awareness
  • monitoring the pharmacies’ operations to look for triggers, risky activities or lax policies
  • advising and proactively assisting pharmacies in avoiding those triggers and making positive operational changes as needed

Taking these crucial steps to minimize audit risks will help independent pharmacies avoid unnecessary expenditures of time and money, so they can focus on remaining profitable, competitive and patient-centric. With the help of a PSAO that knows how to support you and the many challenges of managing an independent pharmacy, you can improve your awareness, understanding and response to audit risks, for better results in your operational strategy and with your bottom line.


To learn more about how Pharmacy First can help with minimizing your audit risks, contact us.


About the Author

With more than 13 years in the pharmacy industry, Ashley Otte is the Director of Reconciliation for Pharmacy First. She manages a team specializing in financial oversight of independent pharmacies. Her expertise also includes all aspects of working with PBMs and ensuring an excellent customer experience.