Client News

Tallahassee Democrat: Jim Koivisto: Pharmacy audits shouldn’t be abusive

Thursday, March 06, 2014

As the owner of a community pharmacy, Halliday’s and Koivisto’s in Jacksonville, I rely on legislators for practical regulation that is sensitive to the needs of a small business.

Unfortunately, while pharmacies are thoroughly regulated in areas such as patient health, safety and privacy, there is almost no legislation in place to guide the pharmacy benefit managers (PBMs), which function as third-party mediators between drug distributors and pharmacies.

PBMs often conduct audits on pharmacies to prevent and address fraudulent practices. Legitimate audits identify claims that are being submitted fraudulently and recoup costs. Much to my frustration and disappointment, some PBMs are taking advantage of the lack of legislation and profiting from incorrectly red-flagging legitimate prescriptions. They are achieving financial gain at the expense of pharmacies and the patients we serve.

New legislation has been proposed to help manage incorrect PBM audits so that they help, rather than hinder, local pharmacies. Senate Bill 702 and House Bill 745 would increase uniformity, consistency and legitimacy in auditing practices. The legislation would require one week’s notice before conducting an audit, limit an auditing period to one calendar year and prohibit penalties for typographical errors in pharmacy record-keeping without proof of intent to commit fraud. The legislation would also allow 10 days for pharmacies to produce documentation addressing any discrepancies identified during the audit process. The legislation requires PBMs to deliver audit reports within 90 days after the audit is completed and establishes a peer-review panel for unfavorable audit reports. Finally, the reform would require the audit to be completed by a state-licensed pharmacist.

Requiring one week’s notice before conducting an audit and limiting an auditing period to one calendar year would be extremely beneficial to cooperating pharmacies. Auditors often arrive without notice on our busiest days, requiring employees to forgo helping customers and other pharmacy work in order to assist with the audit.

My staff in particular spent many hours over the course of an entire week retrieving old claims from an offsite storage unit for the auditors to examine. In the end, the auditors found no unscrupulous records. This is frustrating for both my employees and my neglected customers.

In addition, the new regulation prohibiting penalties for typographical errors in pharmacy record-keeping without proof of intended fraud would prevent pharmacies in good standing from being falsely accused of fraud. Though my pharmacy has been fortunate enough to avoid this abuse, other pharmacy owners have been denied claims on the basis of small clerical or spelling errors.

It is unfair for PBMs to require a pharmacy to pay the full cost of a prescription medication, properly dispensed, because of a misprint. Such tactics run counter to the purpose of the audit: identifying fraud. This practice is particularly inappropriate when PBMs pocket and profit directly from the claims they deny.

It is not often that small-business owners ask for an increase in regulation, but in this case legislation would help to protect my industry, my business and my customers.

Earlier this month, SB 702 was approved without opposition by the Senate Health Policy Committee. I believe the proposed legislation will keep PBMs honest when auditing pharmacies such as mine, and reduce the toll on pharmacy staff and patients.

Now the measure is before the Senate Regulated Industries Committee, and I hope our lawmakers, in both the Senate and the House, follow the Health Policy Committee’s lead and quickly move this important measure forward.

« Return to News