Express Scripts, Inc. (ESI) is a key player in the healthcare system, serving as a pharmacy benefit manager (PBM). PBMs, such as ESI, are independent companies that act as intermediaries between insurance companies and pharmacies, overseeing the prescription drug benefits portion of participating insurance plans.
ESI and other PBMs conduct audits of participating pharmacies to ensure they are compliant. The primary focus of an ESI audit is to ensure that the pharmacy accurately bills the insurance company for all claims.
However, because ESI is not subject to federal regulation, and the contract between the parties generally governs a pharmacy's rights, these audits often proceed independently of federal oversight.
The insurance company pays ESI and other pharmacy benefit managers. These companies also negotiate rebates with drug companies, often by including certain medications on a plan's formulary list.
When ESI conducts a PBM audit, they are looking for any signs of noncompliance that may justify the imposition of a sanction. ESI auditors review many aspects of a pharmacy's practice during an audit.
If ESI is your pharmacy benefit manager and you are facing an ESI audit, it's crucial to seek the guidance of a PBM audit attorney. At Cron, Israels & Stark, our experienced attorneys can ensure that your interests are protected throughout the PBM audit process.
We can help you understand the audit process, your rights, and the potential risks, and work to reduce the risk of incurring significant penalties. By seeking our legal help, you can feel reassured and confident in your decision to challenge the audit findings and ensure compliance.
Key Takeaways
- Express Scripts, Inc. is one of the largest Pharmacy Benefit Managers (PBMs) in the United States.
- ESI often questions discrepancies caused by administrative errors or billing practices.
- PBMs are intermediaries between insurers and pharmacies, managing prescription insurance plans.
- PBMs negotiate drug prices and reimburse pharmacies for dispensing medications to insured patients.
- Pharmacy audits are conducted under the pretense of identifying fraud, waste, and abuse (FWA).
- FWA audits are designed to detect and prevent fraudulent billing practices and improper reimbursements.
- FWA audits protect plan sponsors, insurers, and patients from unnecessary financial losses.
- During an FWA audit, ESI reviews claims data along with purchase invoices, prescriptions, and patient records.
- If your pharmacy is non-compliant, you can face loss of eligibility and referral for a federal civil or criminal investigation.
What Can Cause an ESI Audit?
Some of the most common reasons why a pharmacy might face an ESI PBM audit include the following:
- Failure to maintain records,
- Falsifying records,
- Drug billing issues,
- Invoice shortages,
- PBM contract fraud,
- Telemedicine violations,
- Billing for unapproved drugs,
- Filling illegitimate prescriptions,
- Unintentional billing and coding errors,
- Filing prescriptions from excluded providers.
What Is At Risk in an ESI Audit?
ESI audits present substantial risks for unprepared pharmacies. By taking a proactive and comprehensive approach when preparing for an audit, pharmacies can feel empowered and in control of the situation. ESI may impose severe sanctions, including recoupments, denial of claims, heightened oversight, contract termination, and even referral for investigation.
These consequences can have significant financial and legal implications for your pharmacy, underscoring the urgency and seriousness of the situation.
- Recoupment. One potential consequence of an ESI audit is the possibility of recoupments. ESI can take recoupment action to recover your pharmacy's alleged fraudulent billings, which can have significant financial implications.
- Denial of Claims. ESI can deny pending claims, which can pose a risk to its cash flow.
- Review of Prepayment. This results in heightened oversight for all submitting claims and often leads to more claims being denied.
- Contract Termination. Billing fraud can lead to the termination of the pharmacy's PBM contract, resulting in harsh consequences.
- Investigation Referral. If there is evidence of large-scale billing fraud, ESI may refer the pharmacy to the DEA for investigation, which will collect evidence through various other means. If these are criminal violations, it could lead to federal prosecution for pharmacy fraud.
Noncompliance Penalties
Failing to meet ESI's standards during an FWA audit might result in penalties ranging from claim reimbursement recoupment to more severe measures, such as network termination.
Pharmacies may face penalties for failing to provide original prescriptions, proof of copay collection, or complete purchase invoices. ESI might recoup payments for prescriptions deemed invalid due to missing transfer information or dosage discrepancies.
When billed quantities don't align with prescribed amounts, the pharmacy may be required to repay reimbursements. A discrepancy uncovered in an audit can result in an extensive chain of claims being flagged for repayment.
Pharmacies have the right to challenge ESI's findings. When PBM overreach occurs, it is essential to know how to counter it legally. Identifying procedural violations or a lack of evidence can result in a successful appeal, giving you a sense of hope and optimism about your legal options.
Notably, you may have an opportunity to correct minor clerical errors before penalties are assessed, providing a ray of hope in an otherwise challenging situation.
How a Defense Lawyer Can Help
Our team is well-versed in all aspects of pharmacies' compliance obligations under Medicare, Medicaid, Tricare, and ESI's pharmacy benefit manager (PBM) contracts. With our extensive knowledge and experience, we can help pharmacies, pharmacy owners, and pharmacists avoid serious penalties, providing you with a sense of reassurance and confidence in your legal representation.
In order to challenge an unfair FWA audit, you need to consult with our experienced federal defense attorneys. We can determine if ESI's audit process complied with laws and contract terms. We can also assist in appealing audit findings, challenging penalties, and negotiating settlements.
We can guide pharmacies in corrective actions to prevent issues and improve compliance. Additionally, our law firm can utilize federal and state laws to safeguard pharmacies against unfair or abusive audit practices. For additional information, contact our federal criminal defense law firm, Cron, Israels & Stark, located in Los Angeles, CA.
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