What to Expect from Pharmacy Compliance Audits

The word “audit” is an anxiety-ridden word no one wants to hear. However, in today’s world, it’s pretty safe to assume that your pharmacy will eventually be the subject of a pharmacy compliance audit. Therefore, you should take the time to be fully prepared.

A pharmacy compliance audit assesses your pharmacy’s level of compliance in regards to procedures stipulated by regulatory or contractual arrangements. Pharmacy compliance audits fall in two categories: third party provider audits and regulatory agency audits.

Third Party Provider Audits: If your pharmacy is a contract provider of prescription services, it’s subject to a clause in its provider agreement that allows an audit of the pharmacy’s records, including hard-copy prescriptions, signature logs, computerized refill records, and invoice records.

Regulatory Agency Audits: All pharmacies are subject to state and federal licensing agency audits (i.e. DEA and State Board of Pharmacy).

Before the audit, an audit and compliance vendor will send a notice letting you know their plans to visit your pharmacy. The vendors contract with third-party prescription insurance companies to do the audits on their behalf.

Bring in some extra help on the day of the audit. Most auditors require a pharmacy assistant throughout the entire audit process. Be prepared with all the information you’ll need before audit day, and make sure your assistant thoroughly understands your prescription billing and records process. If your information is not readily available, answering some of their questions may become complicated.

Topics routinely covered in a pharmacy compliance audit

  • Purchasing and dispensing of controlled substances
  • Accuracy of claims (this includes quantity, dispensing date, dispensing intervals, and prescriber information)
  • Product selection criteria for generic vs. brand utilization
  • Assuring that special inventory controls exist for government-mandated discount programs
  • Proper administration of a benefit plan
  • Assuring that rebates and risk-sharing provisions in a benefit plan are working properly
  • Compliance  with contractual requirements for Point of Dispensing programs
  • Accuracy of invoice preparation
  • Compliance with formulary requirements
  • Suspicion of fraud and abuse

It’s also important that you’re aware of the types of documentation you might need to provide to an auditor, such as:

  • Hard-copy prescriptions
  • Computerized dispensing records
  • Physician records to support prescription records
  • Patient signature logs
  • Purchase records and invoices
  • Policies and procedures
  • Financial records
  • Communication logs
  • Provider payment record
  • Contracts
  • Quality control plans
  • Clients and membership eligibility records and contracts
  • Computer flowcharts and programs

(Source: pharmacy-staffing.com)

During the audit

Make sure your signature logs (whether electronic or manual), policies and procedures, and compound formula worksheets are readily available. You will most likely be asked to provide your written policies on how you handle any compounding. It doesn’t matter how rarely you do it, they’ll want to see it. You may also be asked to show them your written policy on delivering medications to patients’ homes.

Audits can become a really big deal. Most will review claims submitted as much as a full 24 months back, and they might look at 100 or more prescriptions in one afternoon. If any discrepancies are found, they might be subject to an adjustment if you don’t have the correct documentation supporting the claim. It can be as simple as an undocumented refill in the computer that ends up amounting to thousands of dollars in adjustments.

After the audit

You will receive full documentation shortly after the audit of the findings and any adjustments. You’ll probably notice that the auditors put their effort toward medications with the highest possibility for financial withholding. For example, don’t be surprised if your audit looks at all of your expensive narcotic prescriptions, brand-name inhalers, insulin pens and vials, and any other medication that was reimbursed for more than $500.

Rest assured, all of the findings can be appealed. You will have 30 days to submit the supporting documentation to correct your adjusted claims. Review each adjustment carefully. Is a prescription missing refill authorization? Contact the prescribing physician and let them know the situation. Physician offices are always willing to help you out.

You may not realize it, but you prepare every day for a pharmacy audit just by having proper workflow. Just remember to keep the communication lines open with your team so everyone thoroughly understands the importance of complete documentation in case of an audit.

A Member-Owned Company Serving Independent Pharmacies

PBA Health is dedicated to helping independent pharmacies reach their full potential on the buy-side of their business. Founded and owned by pharmacists, PBA Health serves independent pharmacies with group purchasing services, wholesaler contract negotiations, proprietary purchasing tools, and more.

An HDA member, PBA Health operates its own NABP-accredited secondary wholesaler with more than 6,000 SKUs, including brands, generics, narcotics CII-CV, cold-storage products, and over-the-counter (OTC) products — offering the lowest prices in the secondary market.

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