Medicare, Medicaid, and Pharmacy Benefit Manager (PBM) audits can result in substantial losses for pharmacies. If auditors uncover evidence – or apparent evidence – of overpayments, not only can they initiate recoveries, but they can also dismiss pending claims, impose a pre-payment review of future claims, and impose other sanctions as well. financial.
Unfavorable pharmacy audit decisions are common. Too often, pharmacy owners and managers don’t approach these audits with the attention and resources they need. Medicare and Medicaid auditors and Pharmacy Benefit Managers (PBMs) have a strong financial incentive to recover as many “overpayments” as possible; and, when in doubt, they will generally opt for payer protection.
But even with a strong defense strategy and doing things in good faith, pharmacies can still find themselves facing unwarranted financial penalties as a result of Medicare, Medicaid and PBM audits. Often, pharmacies simply will not be able to avoid adverse audit findings and decisions despite their best efforts to do so.
“Medicare and Medicaid auditors and PBMs routinely impose substantial clawbacks and other financial penalties during pharmacy audits. However, these financial penalties are unjustified in many cases. Often, pharmacy owners and managers have no choice but to protect the financial interests of their pharmacies through the appeals process. – Dr. Nick Oberheiden, founding lawyer of Oberheiden PC
Therefore, many pharmacies have to file an audit appeal. Although Medicare, Medicaid, and PBM audit appeals are all very different, certain general principles apply at all levels when seeking to overturn (or revise) the result of a pharmacy audit. With that in mind, here are 10 keys to a successful pharmacy audit call:
1. Independent Assessment of Pharmacy Liability for Overpayments
After receiving an unfavorable pharmacy audit decision, the first step is to assess the viability of an appeal. Are the auditor’s conclusions supported by the pharmacy’s billing record? Or, does it appear that the auditor’s conclusions are wrong (in whole or in part)?
Assessing the viability of an appeal requires an independent assessment of the pharmacy’s liability for overpayments. In other words, the pharmacy must conduct its own internal billing compliance audit. When performing this internal audit, the pharmacy should focus on getting an unbiased and factual result—not merely seeking to invalidate the auditor’s conclusions. The pharmacy should engage an outside attorney to oversee the audit, as this will both: (i) rely on an outside attorney’s knowledge of relevant billing rules and regulations, and (ii) d establishing attorney-client privilege.
2. Pharmacy Billing Compliance Program Assessment
In addition to evaluating the pharmacy’s billing record, it will also be necessary to evaluate the pharmacy’s billing compliance program. The ability to demonstrate adherence to a comprehensive and up-to-date compliance program can be a very effective tool during the pharmacy audit appeal process, while shortcomings in the compliance program can exacerbate the challenges ahead. When deciding how to approach the appeals process, pharmacy owners and managers should be aware of whether the billing violations were the result of deficiencies in the compliance program or errors on the part of pharmacy billing staff.
3. Identifying specific billings that created issues during the audit
When evaluating potential grounds for calling a pharmacy audit, it is necessary to identify the specific billings that created issues during the audit. After identifying these billings, the pharmacy can then compare the findings of the auditor to the findings of the pharmacy during its independent assessment.
If the audit revealed a significant volume of alleged overcharging, this can be a time-consuming task. However, this is also an extremely important task, as being able to point out specific flaws in the auditor’s processes and findings is critical to filing a successful appeal.
4. Searching for errors in unfavorable auditor decisions
Since the purpose of filing an appeal is to reduce or eliminate the financial penalties imposed, reviewing the auditor’s processes and findings for errors is a key step towards formulating a strategy. effective audit call. Generally speaking, identifying errors will require the knowledge of an outside attorney experienced in the areas of pharmaceutical compliance and pharmaceutical audit defense.
Errors in pharmacy audits can take different forms. Some of the most common examples include making incorrect assumptions, using incorrect calculation methods, and applying billing rules that were not in effect at the time a particular claim was submitted for payment. .
5. Finding Patterns in Adverse Auditor Decisions
When reviewing specific billings that have resulted in the imposition of recoveries and/or other penalties, looking for patterns can also help formulate an effective audit appeal strategy. Has the auditor consistently made the same mistakes? Did the auditor focus on overcharging while ignoring undercharging? Has the auditor consistently challenged the same types of billings or billings for the same types of drugs? If so, why (and was this reasoning justified)? These are all examples of questions that could potentially result in an appeal.
6. Comparison of the current billing rules with the rules in effect when the alleged overpayments were made
As mentioned above, a common mistake made by pharmacy auditors is applying the wrong set of billing rules to pharmacy bills. This most often involves applying the current billing rules to invoices submitted when a previous set of rules was in effect. Pharmacies cannot be held liable for failing to comply with rules that were not in effect during the relevant period, but auditors are often not careful enough to ensure that they apply the correct rules according to the timing of billings that are under consideration.
Since Medicare, Medicaid, and PBM billing rules change over time, it’s entirely possible that identical billings will trigger different results at different times. Therefore, when searching for patterns as discussed above, finding the general application of a current (or obsolete) billing rule to an entire billing bracket can lead to identification of call patterns.
7. Interview with pharmacy staff who participated in the audit process
Speaking with pharmacy staff who participated in the audit process can provide additional insight into potential appeal strategies. What documents did the auditor request? What documents did this staff provide? What questions were asked and answered? Has the auditor ignored objections to his methods or practices? The answers to these types of questions could provide key information for formulating an effective appeal strategy.
When speaking with pharmacy staff about an audit, a cautious approach is required. To get honest, complete, and helpful answers, any questions posed to pharmacy staff should avoid portraying that staff as potentially having something to do with the pharmacy’s current situation. Similarly, if a staff member is potentially responsible for submitting incorrect bills to Medicare, Medicaid or a PBM, it will be important to ensure that this staff is not unduly involved in the appeal process. come.
8. Formulate an audit appeal strategy based on the facts at hand
After doing the necessary research, the next step is to formulate an audit appeal strategy based on the facts at hand. If errors have crept into the audit, or if the auditor has made fundamental errors that invalidate the entire process, a complete reversal may be warranted. Alternatively, if some of the auditor’s findings are valid and some are not, then the pharmacy’s appeal may need to focus on reducing, rather than eliminating, the financial penalties imposed.
9. Filing the pharmacy audit appeal on time
Pharmacy audit appeals are subject to strict time limits. For example, Medicare audit appeals must generally be filed within 120 days, and it may be necessary to file an appeal within 30 days to suspend any collections. If there is a possibility that an appeal may be necessary, the pharmacy must take appropriate steps to preserve its appeal rights.
In many cases, it will make sense to contact the auditor before filing an appeal (while there is still time to do so). If the auditor has relied on erroneous assumptions or made reasonably transparent errors, it may be possible to negotiate a favorable outcome without going through the formal appeal process. That said, pharmacies that have received adverse audit rulings should be prepared to protect their financial interests by any means available, and they should not waive their right to appeal in the hope of obtaining an informal resolution. favorable.
10. Prepare for the next steps in the pharmaceutical verification appeal process
While some pharmacy audit appeals will get it right the first time, pharmacies will often have to go through multiple appeal stages to get a favorable outcome. For example, there are five levels in the Medicare audit appeal process: (i) redetermination, (ii) reconsideration, (iii) administrative law judge (ALJ) hearing, (iv) board review of Medicare Appeals (MAC) and (v) Judicial Review in the United States District Court – and since the first level involves re-determination by the auditor themselves, it is often necessary to go beyond beyond this level.
Ultimately, the key to successful pharmacy audit calls is to take a comprehensive, structured approach that takes into account unique circumstances. By devoting the necessary time and resources to the appeals process, pharmacies can best protect their financial interests.