Pharmacy Audits

PBM Audits are powerful tools in better understanding this significant source of plan costs, and in our experience most result in both money due back to the plan sponsor and recommended changes for future cost reduction. J. Graham Inc. offers pharmacy audits with the same detailed audit scope and approach as our medical audits. Many audits offered in the pharmacy market are really just pricing analyses conducted for the purpose of trying to secure the brokerage account for the employer. While these assessments offer value, we built our PBM audit platform to truly test the accuracy of claims payments with the same comprehensive Audit Process as our medical plan audits. Pharmacy testing includes:

Pricing Audit
J. Graham Inc. reviews the PBM contract to establish the requirements for pricing with the PBM, but this category usually requires an annual calculation of AWP discounts with mail/retail variations, brand/generic variations, and exclusions like direct member reimbursements and single-source generics. We utilize our own AWP source rather than relying on what is populated in the PBM data extract to ensure that we catch errors in AWP sourcing. This portion of the audit also includes dispensing fee tests. Some of the most challenging areas in this portion of projects include the definitions of exclusions such as single-source generics and specialty drugs. We often find that clients understand the numbers involved in their discounts but have very little idea how greatly these detailed terms impact such calculations.

While pricing testing is typically global in nature for pharmacy, benefits are approached at the claim level. J. Graham Inc. tests all benefits possible from the plan document including not covered items, prior authorization requirements, step therapy, benefit maximums, copayments and special areas such as Dispense as Written penalties. This thorough review exposes areas where the PBM has misinterpreted benefits or often times loaded the plan into a standard benefit instead of the customized version from the client. This phase also uncovers areas where the client can consider changes to the plan document for better clarity on plan intent.

Most employers have moved from pass-through rebates to some form of a per script basis. J. Graham Inc. reconciles per script rebates as a standard part of all pharmacy audits. Any pass-through testing would be custom designed and quoted based on the audit rights at the PBM, but our experience is that pass-through rebates are very difficult to test in a meaningful manner since they are tied to entire book of business experience that can only be self-reported by the PBM.

See our Audit Process for more information about how we conduct an audit, or Contact Us today to discuss your options.