Reforming Pharmacy Audits in GA
It’s long past time to reform the way we do pharmacy audits in Georgia.
I have been a long-time advocate for the rights of payers to audit the management of their plan assets. Audits can be an effective tool to ensure pharmacy benefits managers (PBMs) are operating in the best interests of payers. Payers also expect PBMs to effectively manage the pharmacy networks that serve their members, including both retail store and mail order operations. This requires a pharmacy audit program that is objective, fair and reasonable.
I have serious concerns that PBM audits of Georgia’s retail pharmacy stores, in many instances, have not met the needed standard of objectivity, fairness and reasonableness. Our local and chain pharmacists provide a vital and essential health care service to hundreds of communities throughout our State and have a right to be treated fairly and ethically.
The following are guidelines for consideration to ensure fair and ethical pharmacy auditing practices in Georgia:
- Entities performing pharmacy audits should be disinterested and non-conflicted parties. For example, a PBM which owns and operates a mail order facility is a competitor to the local pharmacy, whether chain or independent, therefore, a PBM owned by a retail pharmacy chain that operates in the same market area is a direct competitor and would have an inherent conflict of interest. Imagine operating a small business and being forced to grant access to your systems, records and books to your direct competitors. This is precisely what is happening to hundreds of our local pharmacies throughout Georgia.
- The practice of “extrapolation” in determining an aggregate number of invalid claims and charge backs should not be permitted, or at a minimum, should be subject to the local pharmacy’s discretion. The local pharmacy owner or local chain manager should have the ability to request a 100% audit of the specific claims in question.
- Audited prescriptions in question are often dispensed safely and accurately (correct drug, correct dosage, etc.), yet a clerical error occurs. In these instances, a penalty may be appropriate, but a 100% chargeback is unfair. A concern is the auditing entity may have a vested interest in a higher recovery as they reap a larger financial benefit from larger recoveries. In these instances, the auditing firm should be required to disclose their compensation arrangements, and if it is a taxpayer plan, to disclose their revenues derived from percent of recovery arrangements.
- Audits should not be disruptive to patient care and the local pharmacy should have a reasonable time to respond to audit requests for information and supporting documentation. No charge backs should occur without a reasonable time to respond. An appropriate appeals process should be available if there is a dispute over audit findings prior to charge backs.
- Audits should not be harassing in any way. Pharmacy owners and managers, from time to time, offer valuable information and testimony to elected officials regarding health care delivery. Any threat of a retribution audit, real or implied, cannot be tolerated in Georgia.
- PBMs who conduct pharmacy audits should show no bias in targeting independents over chains, or chains over independents, or retail stores over mail order stores. The same audit standards should be applied universally.
- The same standards that apply to the audit of local independents and chains should also apply to mail order pharmacies. PBMs that own mail order operations have a conflict of interest when they audit their own mail order (assuming they do audit). Audits of Mail order PBMs should be conducted by an independent auditing firm.
The solution is this: I will work with the legislature to establish standards of conduct for pharmacy auditing in Georgia and work with our legislators to support pharmacy fairness legislation to address inequities. If Georgia is to be a model for the nation in free-market health care delivery, we must begin by ensuring fair and reasonable treatment of our valued local providers.
