Pharmacy Benefit Manager (PBM) audits can be both daunting and disruptive for pharmacies. These audits are designed to ensure compliance and accuracy in claims processing, but they often lead to financial losses that can significantly impact a pharmacy’s bottom line. In this article, we will explore the top five reasons why PBM audits result in losses for pharmacies and offer insights into mitigating these risks.
1. Complex Reimbursement Models:
One of the main challenges during PBM audits is navigating complex reimbursement models. PBMs employ intricate formulas to determine payment rates for prescriptions, which can lead to discrepancies between a pharmacy’s calculations and the PBM’s assessment. Even small errors can accumulate over time, resulting in substantial losses for the pharmacy.
Mitigation: Invest in robust pharmacy management software that accurately calculates reimbursement rates according to the PBM’s guidelines. Regularly update and review your software to ensure compliance with changing regulations.
2. Coding and Billing Errors:
Incorrect coding and billing practices are common audit triggers. If a pharmacy misclassifies a prescription or fails to provide proper documentation, PBMs can recoup funds for supposedly overpaid claims. These errors can result from outdated or inadequate systems and lack of staff training.
Mitigation: Implement stringent coding and billing protocols. Conduct regular staff training sessions to ensure accurate and up-to-date coding practices. Periodically review claims before submission to identify potential errors.
3. Auditing Oversight:
PBMs conduct audits with the primary goal of identifying discrepancies in claims submissions. These audits can unearth not only errors but also instances of potential fraud or abuse. Pharmacies that lack adequate internal auditing measures might overlook discrepancies and fail to address them proactively.
Mitigation: Establish a comprehensive internal auditing process that routinely reviews claims for accuracy and compliance. Designate responsible individuals within your pharmacy to oversee these audits and implement corrective actions as needed.
4. Network Adequacy and Credentialing:
Pharmacies that fail to meet PBM network adequacy standards or lack proper credentials risk losing out on reimbursement altogether. Additionally, any delay in updating licenses or credentials can result in claim denials and significant financial losses.
Mitigation: Regularly review and ensure compliance with PBM network adequacy standards. Keep track of license renewals and credential updates to prevent claim denials due to outdated information.
5. Lack of Documentation:
Inadequate documentation of prescription claims, patient records, and dispensing procedures can lead to audit findings that favor the PBM. Without comprehensive documentation, pharmacies struggle to contest audit results, leading to financial setbacks.
Mitigation: Implement a robust documentation system that captures all essential details of prescription dispensing, patient interactions, and billing processes. Ensure that all documentation is easily accessible and well-organized for audit purposes.
In conclusion, PBM audits can pose significant financial risks to pharmacies. The complexity of reimbursement models, coding errors, auditing oversights, network adequacy, and documentation gaps contribute to potential losses. To mitigate these risks, pharmacies must invest in advanced pharmacy management software, rigorous staff training, comprehensive internal audits, and meticulous documentation practices. By addressing these key areas, pharmacies can better navigate PBM audits, minimize losses, and ensure their financial stability in an increasingly competitive healthcare landscape.
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