Pharmacies facing more payment denials during pandemic's virtual audits

Already marred from COVID-19 burnout and years of financial threats, independent pharmacies' latest woe is pharmacy benefits managers' shift to virtual audits during the pandemic. Independent pharmacies say the new process allows for significantly more claims to be denied and allege the practice is predatory, Kaiser Health News reported Aug. 6.

The number of pharmacy audits conducted in 2020 actually decreased by nearly 14 percent from the previous year, but the overall number of prescriptions reviewed increased by 40 percent, according to data from pharmacy audit assistance service PAAS National. The data showed the number of prescriptions reviewed in September and October increased fourfold from what PAAS reported in previous years.

When PBMs conducted these reviews in-person, they sent an auditor who would perform the process and occasionally seek additional documentation from a pharmacist. The virtual process means pharmacies face an increased administrative burden and stand to lose much more money, a change imposed when they were scrambling to take care of patients during the pandemic.

"It's definitely pulling pharmacy staff away from their duties, and it’s become an administrative burden, which does have a direct impact on patient safety," Garth Reynolds, executive director of the Illinois Pharmacists Association, told Kaiser Health News. "They have to be the de facto audit team for the pharmacy benefit managers."

Dave Falk, the owner of 15 Illinois pharmacies, told Kaiser Health News the biggest audit he had witnessed before the pandemic was for 60-70 prescriptions valued at $30,000 to $40,000. In the fall of 2020, a virtual audit for one of his pharmacies asked him to defend $200,000 in prescriptions. He said none of the prescriptions included in the audit cost less than $450, calling it "not random" and "a money grab by PBMs."

"What they did in 2020 was reprehensible," Dan Strause, president and CEO of Hometown Pharmacy in Madison, Wis., told Kaiser Health News. "While we were taking care of patients, they’re sitting back in their comfy offices figuring out ‘How can we make money off this? Can we find a loophole? Can we find a missing document? Can we find a reason to take back stuff?'"

Many independent pharmacies told Kaiser Health News they have received buyout offers from retail pharmacy chains that own the PBMs.

A Humana spokesperson told Kaiser Health News it has worked to "reduce as much administrative burden as possible" on its network pharmacies. An Express Scripts spokesperson told the outlet the virtual audit "is very similar to the in-person audits in both scope and scale, and are conducted with the same frequency." CVS Caremark and OptumRx did not respond to requests for comment.


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