Buchanan Attorneys Reduce PBM Audit Findings By More Than 98%

PBM audits continue to pose one of the greatest financial and operational risks facing independent pharmacies. What begins as an audit can quickly escalate into a multi-million-dollar recoupment demand, network termination, or allegations of fraud or abuse. Too often, pharmacies assume the PBM’s findings are final. They are not.

Buchanan recently represented a Georgia pharmacy in challenging a PBM audit that initially alleged millions of dollars in discrepancies. After conducting a comprehensive review of the audit findings and the pharmacy’s underlying records, Buchanan successfully reduced the PBM’s findings by more than 98 percent.

The result demonstrates an important point: PBM audit findings should never be accepted at face value. Many audit determinations can be successfully challenged when the pharmacy’s records are carefully analyzed and presented through a well-supported appeal.

The Audit

The PBM asserted that the pharmacy owed millions of dollars in alleged discrepancies identified during its audit. Findings of this magnitude can have consequences far beyond a repayment demand. Depending on the PBM and the circumstances, they may also serve as the basis for network termination, fraud investigations, or referrals to government agencies.

After reviewing the audit, Buchanan determined that the overwhelming majority of the alleged discrepancies fell into two familiar categories.

Signature log discrepancies. The PBM alleged that patient signature logs were missing, incomplete or otherwise failed to establish proof of delivery or pickup.

Days’ supply discrepancies. The PBM alleged that the billed days’ supply did not correspond with the prescription directions or quantity dispensed.

These are among the most common allegations raised during PBM audits. In our experience, they also represent some of the most misunderstood findings. PBMs frequently overlook documentation already maintained by the pharmacy, misinterpret prescription instructions or fail to account for reasonable clinical judgment when evaluating days’ supply calculations.

Buchanan’s Approach

Rather than accepting the audit findings, Buchanan conducted a claim-by-claim review of the PBM’s allegations.

Our attorneys worked closely with the pharmacy to examine the underlying documentation, including prescription records, dispensing records, signature logs, delivery documentation and supporting calculations. Each alleged discrepancy was independently evaluated to determine whether the PBM’s conclusions were supported by the evidence.

Where the PBM’s findings were incorrect or unsupported, Buchanan prepared a detailed appeal identifying the specific documentation that refuted each allegation. Instead of relying on generalized arguments, the appeal addressed the PBM’s findings one prescription at a time, explaining precisely why each recoupment should be reversed.

This level of detail often makes the difference between an unsuccessful appeal and a successful one.

The Result

Following Buchanan’s appeal, the PBM reversed the overwhelming majority of its audit findings.

The pharmacy’s alleged liability was reduced by more than 98 percent, decreasing the audit findings from millions of dollars to approximately two percent of the amount originally asserted.

For the pharmacy, the result significantly reduced its financial exposure and demonstrated that the PBM’s initial findings substantially overstated the alleged discrepancies.

Lessons for Pharmacies

This matter reinforces several important lessons for pharmacies facing PBM audits.

First, an initial audit report is not necessarily an accurate assessment of liability. PBMs often issue preliminary findings before fully considering all available documentation. An appeal supported by complete records and persuasive legal arguments can materially change the outcome.

Second, documentation remains the pharmacy’s strongest defense. Maintaining complete signature records, dispensing documentation, delivery records and supporting clinical information positions the pharmacy much more strongly when responding to an audit.

Third, PBM audits require more than simply submitting additional documents. The records must be organized, analyzed, and presented in a manner that directly addresses the PBM’s allegations. A claim-by-claim rebuttal supported by legal and regulatory analysis often carries far greater weight than a generalized response.

Finally, pharmacies should involve experienced counsel as early as possible. Waiting until recoupment demands become final or a network termination notice is issued can significantly limit available options.

Don’t Assume the PBM Is Right

One of the biggest mistakes pharmacies make is assuming that a large audit finding means the PBM must be correct. Our experience has shown the opposite. We routinely identify errors, unsupported assumptions, and overlooked documentation that substantially reduce or eliminate alleged audit findings.

Every audit is different, but one principle remains consistent: pharmacies should not accept significant audit findings without conducting a thorough review of the underlying claims and supporting documentation.

Buchanan’s Pharmacy attorneys represent pharmacies nationwide in PBM audits, recoupment disputes, network terminations, fraud and abuse investigations and other pharmacy reimbursement matters. If your pharmacy has received audit findings that appear inaccurate, unsupported, or excessive, experienced legal counsel can often make a substantial difference in the outcome.